Investment Review - February 2018
- Stronger corporate earnings, a pick-up in economic growth, and optimism over U.S. tax cuts helped push the stock market to a record close in January. The Dow produced its best January return since 1989 (gaining +5.8%), while the S&P 500 Index registered its best January since 1997 (+5.6%). The Nasdaq Composite logged its best gain in January since 2012 (+7.4%).
- The yield on 10-year Treasuries jumped to 2.72% in January, the highest level in almost four years. The head of the European Central Bank, Mario Draghi, signaled quantitative easing – which involves buying bonds to drive down long-term interest rates – would probably end in 2018.
- During the last week of January, stocks suffered back-to-back declines of more than 0.5%. Up until that point, the S&P 500 had enjoyed a record-long streak (320 trading days) without consecutive drops of 0.5%. The VIX (CBOE Volatility Index), Wall Street’s fear gauge, soared about 35% during the week to the highest level since August.
* This commentary reflects the opinions of Welch & Forbes based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation.
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