Quarterly Update: A Pause or a U-Turn?

Financial markets were exceptionally strong in the first quarter of 2019. Nearly all major asset classes posted returns so positive that they virtually wiped out losses from the difficult fourth quarter of 2018. But will that kind of return be it for 2019? No doubt there are potential upside surprises which yet could materialize, but the declining rate of corporate earnings growth in the U.S. and relatively rich equity valuations present material headwinds.