After closing out the year on a negative note with markets selling off aggressively in October and December, January brought the rebound we were looking for. Market uncertainty and unease began to take hold in autumn with ongoing tariff disputes with major trading partners (namely China) and an inversion of the yield curve. As traders flocked for the safety of cash we looked to both capture profits and find cheaper entry points for quality stocks and funds in client portfolios. In December we aggressively bought on big sell-offs and continue to look for opportunities as they arise.
Stocks prices change based on both current facts and future expectations. Towards the end of last year prices were sharply dropping based on the expectations that trade wars, currency fluctuations, higher interest rates, and many other factors were conspiring to drag on earnings. Then in January the hard facts of earnings started coming in painting a much different picture. Most companies are still reporting record profits despite all the noise. The markets remain volatile (as to be expected at this point in the economic cycle) but we still see economic expansion over the next few quarters at least.