The S&P 500 Could Post the Best Q1 in Two Decades



US stock market

On March 28, key US indexes were trading on a mixed note despite reports of progress in US-China trade negotiations. According to a Reuters report, “Senior U.S. officials arrived in Beijing on Thursday for a fresh round of trade talks,” the news of which boosted investors’ confidence.

At 12:05 PM EDT, all key US indexes—the S&P 500 Index (SPY), the NASDAQ Composite Index (QQQ), and the Dow Jones Industrial Average (DJI)—were trading without any notable changes in their previous session’s closing prices.

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GDP data disappointed

Earlier today, the US Bureau of Economic Analysis released its final GDP data for the fourth quarter of 2018. The data suggested that US GDP had grown at an annual rate of 2.2% in the fourth quarter. This estimate was the third released by the department after its initial estimate in February suggested 2.6% annualized GDP growth in the fourth quarter.

Including this new quarterly data point, real GDP grew at a rate of 2.9% in 2018 compared to 2.2% in 2017. While the annual GDP growth data reflected a good year-over-year increase, it failed to meet President Donald Trump’s target of 3.0%.

The quarterly data’s coming in much weaker than previously expected took a toll on investors’ optimism about US-China trade talks.

S&P 500 Index

As of March 27, the S&P 500 Index had risen nearly 11.9% in the first quarter so far. With this, the benchmark wasn’t far from posting its best first-quarter performance since 1998, when it rose 13.5%. In the first quarter of 2012, it rose 12.0%.

To make the first quarter of 2019 its best quarter in two decades, the S&P 500 Index will have to inch up a little more to add to its 11.9% quarter-to-date gains in the final two sessions of March.


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