Increasing trade tensions weighed on markets during the first week of April, and a weak March jobs report added to concerns, but in this market a little perspective can go a long way. The S&P 500 Index fell on April 6, but the drop may have seemed worse for investors because January 2017 – January 2018 was one of the least volatile periods for the index in history. The S&P 500’s 2.2% drop ranked as the fifth largest single-day decline year to date. However, compared to 2017, which saw a maximum daily decline of 1.8% in May, and only experienced four days the entire year where stocks dropped more than 1.0%, the move seemed

First quarter earnings season, which kicks off April 12–13, sets up to show solid growth, buoyed by tax reform. The S&P 500 Index has grown earnings at a double-digit clip in three out of the past four quarters, a trend that is poised to continue for the first quarter. The index could also extend its streak of 35-straight quarters of exceeding earnings expectations. In this week’s commentary, we preview what we expect may be a very strong earnings season and highlight some key dynamics we will be watching.

Another Strong Earnings Season on Tap

We expect a year-over-year increase in earnings for the S&P 500

Despite a late-quarter rally, high-quality fixed income had a difficult start to 2018, but the ride over the remainder of the year could be smoother. The Bloomberg Barclays U.S. Aggregate Bond Index, a good representation of the broad high-quality bond market, returned -1.5% during the first quarter of 2018. This was the 14^th worst quarter since the index’s inception in 1968. It could have been even worse, but the index rallied 0.5% during the last week of the quarter, offsetting some of the headwinds from earlier in the year.

Familiar Foe

Rising yields, and thus falling bond prices, have been the main cause of pain for

Market volatility resurfaced in the first quarter of 2018, following the stock market’s calm and steady rise in 2017. This week’s Weekly Market Commentary recaps first quarter stock market performance, discusses some of the themes that were in play, and summarizes our outlook for the rest of the year.

A Look Back at Q1

Stocks fell slightly in the first quarter, losing 0.8% on a total return basis and ending a streak of nine quarterly wins for the S&P 500 Index. The return of volatility was the big story of the quarter (besides the bull market’s ninth birthday), as the index suffered its first 10% correcti