What a way to start the year - the major indexes falling in January and early February a breathing taking -10.30% for the US, -12.8% for non US Developed (Europe) and -10.7% Emerging Markets. Both the US and the Emerging Markets rebounded to positive by quarter end. The broad US Market was up 1.08% for the quarter. That kind of volatility is more than 2 standard deviations. This level of fluctuation in the market is not for the faint of heart. So you ask why this happening? I think the price of oil and the ancillary offshoots of the industry, loans and jobs just to name a few are still in a tenuous place. When you add the 2nd largest economy (China) slowing down you end up with nervous investors. Thus the early run for the exits. Oil and China however needs to be balanced with what is happening in the US, the largest economy.
Unemployment is at 5% and 2.2 million people have been added to the workforce since 2007. Interest rates are artificially low and will remain so for the foreseeable future thus stimulating business. Manufacturing rose 2.3 points in March. Unless this is a cruel April Fool's joke this implies inventories are down and demand is rising. Housing continues on its upward momentum. The value of the US dollar is sky high and is showing signs of weakening and when it weakens that will help exports. Oil inventories are holding as opposed to increasing and when they start to drop oil should be at "the bottom" and our old bull gets a second wind. Barring an external shock I think the market will climb. The saying goes that markets climb a wall of worry and that appears to be what is going on now.
In closing, the Dept. of Labor issued their new "Fiduciary Rule" and I am so excited. In general it prohibits brokers and insurance agents telling clients they are on your side when in reality they are working for the broker dealers, banks or insurance companies. I moved to our RIA model, a "Fiduciary" model, in 2006 because of the abuses I saw going on in the system. I have never heard a client say they want to work with someone who will give them products and advice which is OK for them but really good for the bank, insurance company or broker dealer. Clients always say they want to work with someone who only looks out for them.