A chilly winter is finally behind us, and flowers are starting to bloom. The U.S. economy kicked off the year with a disappointing first quarter as consumers and businesses weathered symptoms of a global slowdown. Thankfully, seasons change, and we’re seeing signs of thaw in leading economic data.
Each month, you should be reconciling your checkbook to the statement that the bank sends you, or you get online. After you verify everything is correct, you should keep the monthly statements for one year. The exception to this is if there was a purchase made that relates to taxes, home improvements, a business expense, etc. In these cases, you will want to hold on to the statement permanently, or until you sell the house/business.
The NCAA Final Four is set. On the men’s side, Auburn, Michigan State, Texas Tech, and Virginia are headed to Minneapolis to determine this year’s college basketball national champion. On the women’s side, UConn and Oregon punched their tickets over the weekend while the other two spots will be decided tonight—Baylor and Notre Dame are the favorites.
Investors are becoming increasingly impatient, even as the Federal Reserve (Fed) doubled down on patience at its March meeting. Policymakers signaled a complete pause in policy in a nod to slowing growth and global uncertainty, while Fed Chair Jerome Powell’s praise of domestic economic fundamentals rang hollow for financial markets. Recession concerns intensified as the 10-year Treasury yield dropped through the end of the week, briefly falling below the 3-month yield on March 22 for the first time since 2007.
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Large caps may be better positioned than small caps, given where we are in the business cycle. Small cap stocks have performed well so far in 2019, with the Russell 2000 Index, the most popular small cap benchmark, up 15.2% year to date compared with the 12.6% gain in the large cap S&P 500 Index. Small caps tend to do better when economic growth expectations improve and stocks broadly rally, which has been the case since late December 2018. However, we believe the environment is getting tougher for small caps, for reasons we discuss below.
