Market Comments: As of March 2015
The U.S. economy seems to have hit a soft patch in the first quarter, likely due to a few different factors including a rapidly strengthening dollar and lower oil prices reducing corporate capital expenditures. This has held back the stock market as well, though the S&P 500 has managed a 0.95% gain so far this year. While a stronger dollar does weigh on large, multinational company earnings, it generally does not provide the same type of headwind to smaller stocks. The S&P MidCap 400 and small cap Russell 2000 are up 5.31% and 4.32%, respectively. Early this month, the European Central Bank (ECB) commenced with its own version of quantitative easing. Bond yields in many European countries are already extremely low, so this new QE program’s primary effects may be felt through a weaker Euro currency. In response to the ECB’s actions, as well as increasingly positive economic data from the Euro region, international stocks have performed well, gaining 4.88% year to date.