From the desk of Willie Delwiche.
Key Takeaway: Q1 returns reflect a bifurcated market. Weekly data shows breadth struggling for traction. Inflation-fighting proposals are political palliatives, not economic solutions.
We closed the book on Q1 last week and some of the stats are stunning:
- There was a 50 percentage point spread between the best performing sector (Energy) and the worst performing sector (Communication Services) in the quarter, the widest such gap in years.
- An even greater dispersion was seen between the best performing ACWI market in the quarter (Brazil) and the worst (Egypt).
- From an asset class perspective, commodities (+27%) posted their best gain in decades while bonds (-6%) experienced their worst loss in decades. The 60/40 (stock/bond) benchmark portfolio stumbled to one of its worst starts in the past quarter century, with both the stock and bond components weighing on portfolio returns.
- According to data from the Wall Street Journal, half of the S&P 500 (which is the combined weighting of the Technology, Consumer Discretionary and Communication Services sectors) fared worse than the Russian ruble, which was down 8.5% in the quarter.
