• The S&P 500® was down 2.69% in March, bringing the YTD return to -1.22%.
• The Dow Jones Industrial Average® was down 3.70% for the month and was down 2.49% YTD.
• The S&P MidCap 400® was up 0.76% for the month and down 1.15% YTD.
• The S&P SmallCap 600® was up 1.86% in March and up 0.23% YTD.
You wanted it, you got it—or at least the announcement of it. Whether full or wide-area tariffs will be implemented is still unknown, as behind-the-scenes negotiations (NAFTA, the EU, and China) were being held and logistics were being worked out. The Street, however, was not negotiating; investors reacted to headlines with no specific details and were therefore trading on the basis that somehow their issues would be negatively affected. No news here—uncertainty is the market’s worst-case scenario. Not helping the market was a continuation of what some viewed as a slow consolidation of past gains (the bull had its ninth birthday on March 9, 2018) and volatility (the S&P 500 had 12 days up at least 1% and 11 down at least 1% YTD; 4 and 4 for all of 2017; at the 2% level, 1 day was up at least 2% and 5 were down at least 2%, with no 2% moves in 2017). While concern about a trade war increased on the Street, selling still remained calm and “relatively” normal, if you tried to classify it as a sell-off. The overall tone on the Street was still optimistic, although obviously some were selling at least portions, as there was still hope (outside of no trade war) for a record-setting Q1 2018 earnings season; there are a lot of expectations for this season (what’s that saying? “Don’t expect anything and you won’t be disappointed.”)