In order to properly review the portfolio over the first four months of the year, I want to set the table in terms of where global markets are to start the year. For context, the S&P 500 declined -12.60% over the first four months of the year. The last time the S&P 500 started off this poorly was in 1939. Yes, read that again. 1939 – the start of World War 2.
However, not to be outdone, and giving investors very few places to hide, fixed income markets were down -9.50% to start the year as well. This is one of the worst starts to the year for fixed income in over 40 years. Despite what may seem as an abysmal start to the year for indices, it gets even worse when you begin to look at individual equities – as of the end of April, 45% of stocks are down greater than 50%, 22% are down greater than 70%, and 5% are down greater than 90%.
Finally, April was only the fourth month since 1973 that the S&P 500 was down more than 5% and U.S. Treasuries were down more than 2% in a single month. With the FOMC meeting happening later this afternoon, all eyes are on Chairman Jerome Powell and whether the Federal Reserve will raise interest rates by 50 or 75 basis points.
Source: Bloomberg