2018 Economic Outlook
An extended period of tranquility ended as the record low volatility observed in stocks over the past year gave way to a correction in February and continued higher volatility through the end of March. The February jobs report indicated not only that the economy continues to create jobs at a healthy pace, but also showed early signs that wage inflation may begin to accelerate.
The passage of corporate tax cuts late in the year provided a positive surprise for U.S. stocks and helped drive another strong quarter of returns, bringing full year returns to over 20% in the S&P 500. The S&P 500 now stands at about three times its value of 677 at the last market bottom on March 9, 2009.
Markets continued their march higher throughout the quarter as volatility has all but disappeared. Year-to-date, intra-day market volatility is the lowest ever recorded in the 32 years the statistic has been recorded. So far, less than 5% of trading days have had a move of 1% or more, and there have been no days with a 2% move.