Investment Review – March 2018

March 12, 2018 Investment Review
  1. Stronger than expected wage inflation data in the U.S. was the catalyst for a global correction in stocks in the month of February. Technical factors and the unwinding of certain low volatility trading strategies exacerbated the sell-off which reached 10% in nine trading days. The volatility index or VIX, which had been complacent throughout 2017 and began February at 14 spiked to 37 before ending the month just below 20, the 10-year average.

  2. Stocks closed the month of February off their lows but each major index closed down. The Dow Jones Industrial Average lost 4.28%, the S&P 500 lost 3.89%, and the Nasdaq Composite lost 1.87%. Losses weren’t confined to the U.S. The MSCI EAFE index of non-U.S. developed countries lost 4.71% and the MSCI Emerging Markets index lost 4.73%.

  3. The Winter Olympics were held in PyeongChang, South Korea during the month of February; 92 countries participated. According to Variety, viewership was down 7% from the 2014 winter games with 19.8 million primetime viewers including streaming services. Norway led the medal count with 39 total medals tying Germany with 14 gold. The U.S. finished 4th in the medal count with a total of 23 including 9 gold. Host South Korea finished with 17 total medals including 5 gold.

key investment statistics

Sources: Bloomberg LLC, U.S. Commerce Department, Bureau of Labor Statistics, EIA, Dow Jones Inc., MarketWatch, Standard & Poors, Federal Reserve BankFinancial Times, FactSet, State Street Global Advisors, Mortgage News Daily

* 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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