Stock Market Insights: First quarter review

Never count the Flying Farmer out. One of my childhood heroes was a dirt track racer from my hometown named Ken Essary, nicknamed the Flying Farmer. He was famous for his come-from-behind wins.

Once, he was racing with seven laps to go when some cars wrecked in front of him, and he spun out to avoid it. It made him go to the back of the field of almost 25 cars. When the green flag dropped, he started passing cars in the backfield. Then, to the shock of everyone in the stands who had written him off, he passed the lead car on the final corner of the final lap with just a few feet left to win the race.

Never count out the flying farmer. The market had a nice come-from-behind win this last month, too.

The stock market’s impressive come-from-behind performance in March was dramatic, even with several market disruptions, including a mini-banking crisis. The S&P 500 finished the first quarter up 7.37% and Dow 0.77%, according to JPMorgan.

Patient investors found value in the market as stability returned. Not only did the March rally put the market in positive territory for the first quarter of the year, but it also showed us that investors can look beyond current negative headlines and look ahead.

LPL Financial believes the market might be about to start a new bull market later this year as the Federal Reserve finishes this cycle of rate hikes. The Fed is hinting that it is close to its final interest rate hike, which should help encourage the markets.

Two potential positives that could fuel a new bull market, lower interest rates and a weaker U.S. dollar are coming into focus. First, the lower interest rates would restart the housing market and business growth because more Americans would begin taking out loans. A weaker U.S. dollar would help U.S. companies with heavy export businesses succeed more in the global market.

Not only are market conditions looking better, but we should also remember that it’s very rare for markets to have negative returns two years in a row. Of course, we could still see some near-term rough market days, but overall, I think the market will end strong.

The economy could hit its stride after the Fed’s rate hiking campaign ends and for investors to benefit once it does. Much like the March rally, a second-half rally could have us see double-digit stock returns for stocks this year. The S&P’s 7% in the first quarter puts us well on our way to a double-digit year.

Overall, the first quarter of 2023 was one of growth and opportunity for the investors who stayed invested and adjusted their portfolios with the ever-changing market conditions. It will be interesting to see how these trends continue throughout the rest of 2023 and what adjustments investors might need to make to navigate them. Hopefully, the market will finish strong. Literally, my money is on them to win this race.

My hero ended his racing career with more than 900 wins and ended up in the National Dirt Late Model Hall of Fame. The Flying Farmer was a dependable winner. I hope the market continues to be too.

Have a blessed week.

Fervent Wealth Management is a financial management and services entity in Springfield, Mo. Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.

Opinions are for general information only and not intended as specific advice or recommendations. All performance cited is historical and is no guarantee of future results. All indices are unmanaged and can’t be invested in directly.

The economic forecast outlined in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

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