January got off to a fast start, with the DJIA, S&P 500 and NASDAQ leaping by 5.8%, 5.6% and 7.4%, respectively. Many market experts attributed that performance to a fantastic fourth-quarter earnings season and the passing of the Tax Cuts and Jobs Act of 2017. For backdrop, consider this from research firm FactSet:
- 77% of S&P 500 companies exceeded sales estimates
- The S&P 500 reported revenue growth of 8.2% for the fourth quarter – the highest growth since the fourth quarter of 2011
In 2017 we saw the lowest levels of volatility in decades. Now market volatility has returned to normal with more frequent market moves. Know, this is really the norm and should be expected.
In the first quarter, the S&P 500 had 12 days where it was up over 1% and 11 days it was down at least 1%. And there were only 4 such days for all of 2017. Looking at days where the market moved 2%, we see that there was only 1 day where the market moved more than 2% and 5 days where the market moved down more than 2% in the first quarter. In 2017, there were no 2% moves.
