After the worst January for stocks since 2009, the S&P 500 and the Dow bounced back from their lows to finish the first quarter of 2016 in the green.
Helped by a strong 7% rally in March, the S&P finished up 0.8% for the quarter, led higher by the utilities and telecom sectors with the financials and healthcare underperforming. Commodity-sensitive names led the rally, with Freeport (FCX) and Newmont Mining (NEM) bouncing back, up 53% and 48%, respectively. Pipeline name Williams Companies (WMB) and drugmaker Endo International (ENDP) were the worst performing names in the index, down 4% and 5% respectively. The Dow also ended 1.5% higher, led by Verizon (VZ) and Caterpillar (CAT), up 17% and 13%, respectively. Goldman Sachs (GS), down 13%, and Boeing (BA), down 12%, were the laggards for the Dow.
The Nasdaq, though, remained in the red, falling 2.8%, marking its first negative quarter since 2009.
Uncertainty in January rising from fears of a sharp slowdown in China fears, a further slump in oil prices, and elevated chatter of a U.S. recession drove investors to classic safe-haven assets like gold, which earned the top performance spot for the quarter. The yellow metal jumped up 16.5% during the quarter. The Japanese yen, another safe-haven play, also saw a strong quarter.
Below is a chart from Deutsche Bank’s Jim Reid shows how the world’s major asset classes performed during the quarter.
An important stand-out in March was the big surge in oil, whose weakness had been leading the market down earlier in the year, with WTI crude prices up 14% from the low $30s to closer to $38/bbl. Rising expectations for supply cuts helped. The oil rally in turn helped both emerging market equities (+13%) and emerging market bonds (+8%) deliver strong gains during the month, Reid noted. Developed equity markets also performed well, thanks to a dovish Fed and ECB easing.
On the other hand, European Banks were a laggard, down 1%. And gold, down 1%, was down modestly, but still managed to outperform for the quarter due to January volatility.