Aldrich Wealth Shares a Look at the Market
The tension between pro-growth and protectionist policies controlled investor sentiment throughout the quarter. Strong domestic growth and expectations of further Fed tightening were met by an escalating trade war and fears of an imminent recession.
Despite the pronounced volatility, domestic market equities, as measured by the S&P 500 Index, ended the quarter in positive territory with a 3.4% increase. Small-cap stocks outpaced their large-cap brethren, while growth generally bested value. Smaller companies with their U.S. centric orientation have been supported by strong earnings, protectionist rhetoric and a strengthening dollar.
Trade tensions reverberated across non-U.S. markets as well, inflicting the greatest damage on the emerging markets. Non-U.S. markets, as measured by the MSCI EAFE Index, declined 1.2% amid weakness in Japan and Germany. Emerging markets, as measured by the MSCI Emerging Markets Index, dropped nearly 8.0%, with significant weakness emanating out of Latin America. With trade retaliation between the U.S. and China heating up, China’s currency and stock market dropped to fresh lows.
The Federal Reserve raised the Fed Funds rate another 25 basis points in June and remain on pace for a total of four hikes in 2018. Additionally, the Fed has outlined plans for three more hikes in 2019, as economic activity and unemployment data remain robust.
Meet the Authors
Partner + Chief Investment Officer
Darin Richards, CFA®
Aldrich Wealth LP
Darin joined the Portland wealth management firm in 2004, bringing more than a decade of investment and financial consulting experience with him. As chief investment officer for Aldrich Wealth, Darin is responsible for developing, and implementing our investment philosophy and leading the investment committee. He works directly with some of our most complex and largest clients and also…
- Series 7 and 63 security exams
- Chartered Financial Analyst (CFA®)
Partner + Director of Private Wealth
Nicole Rice, CPA
Aldrich Wealth LP
Nicole has dedicated her entire professional career to helping individuals and corporate clients with their financial needs and provide investment-related guidance. She has experience working in wealth management, retirement planning, tax accounting, design and implementation of non-qualified benefit plans, insurance, and qualified benefit plans. Her deep expertise and team-based approach enables her to provide clients…
- Individual wealth management
- Certified public accountant
- Retirement planning
- Series 65 securities exam