March was a relatively calm month for the markets, with the S&P 500 closing fractionally higher for the month and trading within a pretty narrow range throughout the month.
The news was mixed throughout the month with concerns about the situation in Ukraine and Russian sanctions; new home sales sinking to a five-month low; and disagreement surrounding how to interpret FOMC Chair Janet Yellen’s comments about the timeframe for raising interest rates.
There was enough good news in March to offset most of those concerns, however. Investors were pleased to see a three-month high in consumer spending and a GDP reading slightly higher than expected; better unemployment data came in throughout the month; and other U.S. economic data was encouraging, such as industrial production and the Philadelphia Fed March Manufacturing Survey.
Finally, March 30th featured a “60 Minutes” report about the new Michael Lewis book, “Flash Boys,” in which Lewis alleges that certain unfair characteristics of High Frequency Trading (HFT) result in the market being “rigged.” We plan to read the book in the coming weeks, but our initial reaction is that this does not pose much of a threat to the individual long-term investor. In addition, although the “60 Minutes” show raised awareness of this issue, it has been something that the financial media has been discussing for years. We’ll be sure to update the blog if there is anything interesting to report from the book, but for now, the feeling here is that the book itself will cost the individual investor a lot more money than the alleged unfairness of the HFT system!
So far in April, the S&P 500 has set new all-time highs while the NASDAQ, at the time of this writing, is experiencing a sharp move to the downside. It will be interesting to see whether the move in the NASDAQ foreshadows a similar move in the broader market throughout the rest of the month.Thanks for reading.