Back in December 2018 market players were struggling with the worst action in many years. Some were looking for a bounce but no one was expecting then that the S&P 500 would go almost straight up in the first quarter of 2019, gaining nearly 13%.
Much of the credit for the move goes to the sharp shift by Fed Chair Jerome Powell to an extremely dovish stance. However, hope for a U.S.-China trade deal, generally good economic reports and the fear of missing out also helped to propel the indices higher.
The S&P didn't fully recover the losses it racked up in the fourth quarter but it is now only about 3.5% from its all-time highs.
The last day of the quarter was a good one for the indices, although the much-anticipated Lyft (LYFT) IPO turned into a dud. The stock opened at $87.24, traded as high as $88.60 very briefly and then trended down the rest of the day and closed near the lows at $78.29. Nearly anyone that bought the stock Friday is sitting on a loss.
The fact that there are a number of other big IPOs on the docket makes that poor response a bit of a concern. We'll see if there is better interest next week.
One positive Friday was that the market held up very well even though the headlines about progress on China trade were rather vague. It is clear that these negotiations are not close to done, but the market seemed content with the story that progress is being made. There was no major 'sell the news' reaction but that may have had something to do with the fact that it's the end of the quarter and there was likely some pressure to keep stocks marked up.
There are lots of headlines about this being the best quarter since 2009. Unfortunately, that doesn't tell us much about what lies ahead. Worries about slowing economic growth continue to bubble up and we are heading into a weaker period of time seasonally.
While the indices have been in a trading range and have had trouble generating momentum, they have had plenty of support.
There was some better stock-picking Friday, which is a positive sign, but we start fresh on Monday as the second-quarter commences.
Have a great weekend. I'll see you on Monday.