Quartering Breeze

The quarter is over. How’d we do?

By many measures the second quarter was a blockbuster. The S&P was up 15%–the best performance since 1998. From their early March lows, most markets are up about 40%.And the volatility index fell almost by half: from 40% to 25%.

But of course, we’re rebounding from an historic decline, with back-to-back double-digit quarterly declines in the S&P up until March. And the kind of volatility we saw in the four months from September through March was truly historic.

Notably, the best performing sector so far this year has been Technology. Apple is up 67%. Google is up 37%. IBM is up 24%. So far this year, this sector’s earnings account for 16% of the market’s earnings-in line with its market weight. But these companies don’t have a lot of bad loans or other issues. Nor are looking for more bailout funds.
The market’s recovery seems to be anticipating the economy. The strength of the Tech sector just reinforces this. Let’s hope they’re right.

Douglas R. Tengdin, CFA
Chief Investment Officer
Hit reply if you have any questions—I read them all!

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