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.
