GPM First Quarter 2016 Review

First Quarter 2016 Review
 
• Stocks:  mixed, rebounded from substantial early quarter decline; S&P 500:  +1.3% in Q1.
• Treasuries:  rallied as yields declined globally; 10 Year Yield: 1.79% vs 2.27% at year-end.
• Corporate Bonds:  big recovery gains; slightly outperformed Treasuries.
• High-Yield Bonds:  solid gains following two negative quarters.
• U.S. Real GDP:  +1.4% in Q4 (annualized) from +2.0%, +3.9% and +0.6% in the prior three Q’s,
   respectively.

First Quarter Market Developments

Changes in the price of crude oil continued to drive volatility in risk assets, most notably stocks and high-yield bonds, both of which rebounded sharply from selloff lows set mid-quarter.   From $100 per barrel in mid-2014, oil bounced off a $26 February low.  Stocks and high-yield bonds followed to recover from deep losses.    U.S. Treasuries and high quality corporate bonds posted solid gains to lead all core asset classes as investors sought safe havens in the face of volatility in other financial markets.   The U.S. Dollar lost significant ground against key currencies.

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