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Donna Cournoyer
In Market Updates

March 2023 Recap: Two Good Quarters

Despite recent problems in the banking sector, stocks started the year on a strong note.

The US benchmark S&P 500 gained 7.5% in the first quarter of 2023. Foreign stocks also climbed, with the EAFE Index (Europe, Australasia and the Far East) up 9%. Technology stocks had a stellar quarter, rising by nearly 21%. Bank stocks were on the other end of the spectrum, falling by more than 17%.

And bonds participated in the rally, too. A near half-of-one-percentage-point drop in intermediate-term interest rates—despite short-term rate increases by the Federal Reserve in January and March—translated to a gain of 3.2% for the Bloomberg Aggregate Bond Index, a key gauge of the US bond market.

Here’s a recap of stock and bond performance by quarter, going back to the beginning of last year.

RK

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In Market Updates

February 2023 Recap: Interest Rate Tail Wags Stock Market Dog

The interest rate tail wagged the stock market dog in February. The prospect of still-higher short- and long-term interest rates rattled the stock market.

The 10-Year Treasury bond touched its 2023 low point in yield of 3.39% on February 1, but climbed during the rest of the month and ended at 3.92%. The yield climb translated to a US bond market decline of 2.9% for the month.

By the end of February, intermediate-term bonds had given back most of their January gains.

Concerns about inflation being stickier for longer and rising bond yields weighed on stocks. By the end of the month, the S&P 500 had fallen from its high point of a 9% year-to-date gain in early February back down to a 3.5% year-to-date advance. For the month of February, US stocks slid by about 2.5%.

Below is a summary of February returns.

RK

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In Market Updates

January 2023 Market Recap: Winter Warmer

Punxsutawney Phil, the bushy Pennsylvanian, predicted six more weeks of winter cold by seeing his shadow on February 2 – and right on cue, New England fell into a deep freeze.

The financial markets, however, have been feeling quite summery. In January, bonds became a bit steamy, stocks were sultry, and some parts of the tech sector were a-sizzle.

For the month of January, the S&P 500 index of large company US stocks rose by 6.3%. Foreign stocks climbed even higher, up by 9.0%. The technology-heavy Nasdaq index advanced by 10.6%.

Bonds rose along with stocks. The Bloomberg US Aggregate Bond Index rose by 3.3% last month. 

Below is a summary of January returns.

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In Market Updates

2022 Market Recap: Bear-Be-Gone

The S&P 500 Index of US large company stocks entered a bear market (defined as a drop of 20% or more from a recent high) in the second quarter of 2022 and then began to climb out of bear territory in the fourth quarter of last year.

The bond market registered its worst year-to-date performance on record by the third quarter of 2022, then showed signs of recovery in the final quarter of the year.

Even though there was improvement in the final months of last year, this was cold comfort to investors. By any standards, 2022 was terrible for the financial markets.

Here’s a chart of quarter-by-quarter returns for stocks and bonds in 2022:

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