Stokes Capital Commentary 2019 Q1
Quartley Market Review
In dramatic fashion, U.S. equities reversed course during the quarter with the S&P 500 index gaining 14.6% as the Federal Reserve signaled a more dovish tone on its plan for raising interest rates. Heading into Q4 2018, The Federal Reserve expressed a baseline plan to raise interest rates five more times during this tightening cycle while market expectations were for only three increases. After raising rates once in December, the late 2018 sell off in equities and weak economic data persuaded the Fed to communicate an indefinite pause on raising interest rates. Now market expectations have switched to anticipating a rate cut by the end of 2019. It remains to be seen whether Q1 represents a risk-asset relief rally in reaction to a monetary policy shift or whether it portends a more lasting upturn in the global economy.