Situation Analysis: Flat Out of the Gates

Following the first negative quarter for domestic stocks since 2015, the second quarter of 2018 began on a sour note, with the S&P 500 Index falling 2.2 percent and the technology-heavy NASDAQ dropping 2.7 percent today. Consumer discretionary stocks were also notably weak performers while international stocks fared only slightly better than their domestic brethren. For their part, bonds offered small compensation for diversified investors, with U.S. Treasuries increasing only modestly in price. Oil prices fell 3.2 percent while gold was a relative winner, reflective of the broad sell-off across capital markets. While difficult to parse specifically what caused the sell-off, the moves can be viewed as consistent with the changing balance between risk and reward.