S&P 500 at a New All-Time High, Capping off Stocks’ Best Start to the Year since 2019

Federal Reserve Chair Jerome Powell said on Friday that the most recent U.S. inflation figures aligned with desired outcomes. Yet the data last month was not as low as most of the good readings he got in the second half of last year. Though the PCE price index increased at a 2.5% annual rate in February, up from 2.4% in the prior month, Powell’s comments suggest that the Fed's plans for interest rate cuts remain unchanged for the year.

With a 0.39% weekly gain before the long Easter weekend, the S&P 500 notched another record high at 5,254.35. The benchmark index climbed 10.2% in the first quarter, its best start to the year in five years. The Nasdaq composite edged down 0.30% for the week bringing its year-to-date performance to 9.11%.

The European stock markets performed better than their American counterparts over the last week of March with the MSCI EMU up 0.95% (+9.95% year-to-date).

In Asia, stock indices were mixed. Japan’s Nikkei lost 1.27% for the week but remains the best performer over the quarter, up 20.63%. India’s Nifty 50 added 1.04% (+2.74% YTD), Korea’s Kospi inched down 0.07% (+3.44% YTD), and the Shanghai Composite edged down 0.23% (+2.23% YTD).

Overall, equity ETFs recorded net inflows of $219 billion over the quarter.

Best & Worst Performing S&P 500 Sectors  

10 out of the 11 S&P sectors closed the first quarter in positive territory. Despite the rebound of the last week of March, real estate was the sole underperformer, experiencing a 1.36% QTD loss as it faces challenges from elevated interest rates and diminished demand for office space amidst the prevalence of remote work.

A Mixed Quarter for Bond Markets  

Despite bond ETFs recording $69 billion in net subscriptions for the quarter, the performances achieved were highly disappointing. Globally, government bond ETFs lost 0.94% amid rising yields. The U.S. 10-year Treasury yield gained 32 basis points from 3.88% to 4.20%. In Europe, the 10-year Bund yield followed suit, climbing from 2.02% to 2.30%. Corporate IG bond ETFs experienced a decline of 0.44%. Only the high-yield corporate bond segment managed to finish above the flatline, up 0.84%.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.