After a blistering start to the year, US stocks, as measured by the Russell 3000, declined nearly 6.5% in May1.
Over the weekend, President Trump announced his plans to increase tariffs on $200 billion dollars of goods from China and new tariffs on $325 billion of imports that were previously untaxed.
For the first time since 2007, shorter-term yields on U.S. Treasury securities are higher than some of their longer-term counterparts, a phenomenon referred to as an inverted yield curve.
2019 has seen optimism spread to the capital markets with traditional asset classes all posting strong returns to start the year. As investors’ fears dissipate and we bask in the tremendous run that has marked the start of the year, let’s examine the role of high-quality fixed income in your portfolio as a tool to mitigate the effect of any equity volatility we will experience in the future.
The first quarter of 2018 was the first down quarter for US stocks since the third quarter of 2015. The 10 quarters since we’ve seen relatively steady growth. That relative calm has made the first quarter all the more jarring with multiple daily swings of 1% or greater.