What’s happening: highlights from the NP Investment Team
This past March we marked the 10-year anniversary of the current bull market. The market reached a low on March 9, 2009 after a punishing bear market triggered by the global financial crisis. This has led to the longest equity market expansion in the last 100 years, extending beyond the prior record, which was set during the 1990–2000 technology boom.
This bull market is now in its 121st month with the S&P 500 returning over 400% during this time period. The average bull market going back to 1928 has been 62 months in duration with an average return of 175%. This bull market stands out due to the outperformance of the U.S. market relative to global indices and for the slower pace of economic growth when compared to prior cycles. While the real economic growth has lagged equity markets and the U.S. has far outpaced the rest of the world, it does not mean the bull market is set to end anytime soon. The U.S. labor market remains strong; solid payroll growth and low unemployment have given households the confidence to spend. Wage growth was slow to improve earlier in the cycle but that has picked up as of late, though it still is not at levels that typically cause the economy to overheat. Business investment was also slow for much of this cycle but that too has picked up in recent years. A combination of higher business and consumer spending should lead to continued positive economic growth here in the U.S.
Leaders and Laggards: What’s Up and Down in the Stock Market?
|
Economic Sectors |
March 2019 |
Year-to-date |
|
Energy |
2.11% |
16.43% |
|
Health Care |
0.49% |
6.59% |
|
Consumer Discretionary |
4.11% |
15.73% |
|
Information Technology |
4.83% |
19.86% |
|
S&P 500 |
1.94% |
13.65% |
|
Industrials |
-1.14% |
17.20% |
|
Consumer Staples |
4.09% |
12.01% |
Stock market leadership year to date has been led by the technology, energy and industrial sectors as concerns around slowing global growth and trade wars have eased through the first three months of the year. The health care sector has come under pressure due to regulatory concerns surrounding drug prices as we head into the election season, but we remain positive on this group over the long-term.
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