Our Spring 2017 Investor Letter reviews the low-volatility first quarter. Prior to March 21st, the S&P 500 went 109 straight days without closing down more than 1%, en route to a 6.07% gain for Q1 2017. The first-quarter market gains also came with unusually low volatility as measured by the VIX Index; the key index for measuring short-term volatility.
Pundits have largely attributed the steady post-election market climb to the pro-growth policies of President Trump, but that does little to explain the even stronger performance in international markets. Developed international markets (represented by the MSCI EAFE index) ended the quarter up 7.39%, and emerging markets, which presumably would be hurt by President Trump's protectionist policies, were up 11.49%.
The Investor Letter reviews a number of important economic variables, noting the soft data points have certainly spiked higher and are potentially pulling along the hard economic data points.
For additional insight into our views about the market and economy, see our Investor Letter below.