In last quarter’s commentary I indicated that volatility will return to the market and it did, with gusto. After a strong start volatility spiked in the first quarter, causing the market to drop 0.61% for the quarter. Throughout January, the market appeared to be on the same track as 2017, moving up, hitting new records with little volatility. Investors cheered the passage of the corporate tax cuts that encourage corporations to bring their foreign profits back to the U.S. Strong economic data and fourth quarter earnings that came in much better than expected further boosted investors’
The U.S. stock market continued to perform well in the second quarter, up 3% for the quarter and up 9% year to date.
Strong earnings drove the market higher with the bulk of the gains coming in late April and May as first quarter earnings reports outpaced even elevated expectations. The overall earnings for the S&P 500 rose almost 14% compared with the quarter a year before. This marked the second straight quarter of earnings increases, following five quarters of declines.