The financial markets posted a striking start to the year with the S&P 500 Total Return Index (“Index”) rising 13.6% during the first quarter of 2019. The primary driver of the first quarter rally was the recognition that central banks are more likely to hold interest rates low for an extended period. Perhaps the biggest shift occurred in the U.S., where the Federal Reserve (“Fed”) modified its stance to rate neutrality.
The first quarter Index return of 13.6% marked the strongest quarterly return since the third quarter of 2009. All 11 S&P industry sectors had positive returns for the quarter. The largest gains were in the Technology, Industrials and Consumer Discretionary sectors at 19.9%, 17.2% and 14.7%, respectively. The lowest sector returns during the quarter were in Healthcare and Financials at 6.7% and 8.6%, respectively.