The first quarter of 2017 is now behind us, and although we won’t have complete economic data for a while, we do know that domestic stocks had a solid start to the year. Last week, major indexes took a pause from some recent gains and began the second quarter of 2017 with less than thrilling performance. The S&P 500 lost 0.30%, the Dow was down 0.03%, the NASDAQ gave back 0.57%, and the MSCI EAFE declined 0.72%.[i] For this week’s update, I’m going to look at what happened to markets in the first quarter.
How did markets perform in Q1?
All three major domestic indexes posted sizable gains in the first three months of 2017:[ii]
- S&P 500 up 5.5%
Last week, all four of the indexes I discuss in these market updates saw their performance stumble. The S&P 500 lost 1.44%, the Dow was down 1.52%, the NASDAQ gave back 1.22%, and the MSCI EAFE declined 0.07%.[i]
On Tuesday, March 21, the S&P 500 and Dow recorded 1% declines for the first time since Oct. 11, 2016.[ii] By Friday, the S&P had posted its worst week since the election.[iii] At the same time, 10-year Treasury yields fell and the dollar dropped for the second straight week.[iv]
For the fifth time in six weeks, domestic stock indexes ended last week in positive territory. The S&P 500 gained 0.24%, the NASDAQ added 0.67%, and the Dow eked out a 0.06% increase.[i] International equities in the MSCI EAFE grew by a sizable 1.99%.[ii]
Over the week, we received a series of economic updates that gave a mostly positive view of the economy’s progression, including the following data for February:
- The Producer Price Index beat expectations and rose 0.3%.[iii]
- The Consumer Price Index beat expectations and rose 0.1%.[iv]
- Retail Sales met expectations and rose 0.1%.[v]
- Housing Starts beat expectations to reach 1.29 million—including the highest measure for single-family home construction since 2007.
Once again, domestic markets reached record highs last week. The S&P 500 was up by 0.69% and the NASDAQ increased by 0.12%.[i] With its 0.96% week-over-week growth, the Dow has posted gains for 11 straight days and is currently experiencing its longest record streak since 1987.[ii] On the other hand, international equities in the MSCI EAFE lost ground, dropping by 0.25% for the week.[iii]
Last week did not offer much new information on economic fundamentals. With the
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