Albeit modest, U.S. stocks posted their fifth consecutive gain during the month of March. The S&P 500 increased 0.12% for the month, while small cap stocks, as measured by the Russell 2000, increased 0.13%. Growth stocks (+1.16%) easily surpassed the 1.02% decline of value stocks. Developed international stocks increased by 2.61% and emerging market stocks increased by 2.35%.

Fixed income markets were challenged in March by higher interest rates. Rates moved up during the month but more so for bonds with shorter maturities, thereby flattening the yield curve. The yield on the benchmark 10-year Treasury increased 4 basis points to 2.40% during the month. Interestingly, the yield on the 10-year Treasury was 2.60% the day before the fed’s announcement of an increase in the fed funds target range. The Barclays Aggregate Bond Index decreased by 0.05% for the month. Treasuries (-0.05%) held up better than investment grade (-0.23%) and high yield bonds (-0.22%). Municipals increased 0.22% during the month.


U.S. stocks posted modest gains in March, but the ongoing rally was uneven from a style standpoint. There was little difference between large and small cap stocks, but growth stocks soundly outperformed value stocks with the former increasing and the latter declining in value. Developed international and emerging market stocks generated solid returns and outperformed domestic stocks.


Interest rates moved up across the yield curve with the largest move taking place in bonds with shorter maturities. The yield on the 10-year Treasury increased four basis points in March to 2.40%. The Barclays Aggregate Bond Index, Treasuries, investment grade corporates and high yield bonds all posted negative returns. Municipal bonds bucked the trend and increased slightly during the month.


The economy continues to exhibit growth. As expected, the Federal Open Market Committee raised the federal funds rate by ¼% to a target range of ¾ to 1%. The labor market continued to improve. For the second consecutive month, over 200,000 new jobs were added to the economy, a feat last accomplished in June and July of last year. Unemployment ticked down slightly to 4.7%. Consumer confidence soared to its highest level since December 2000. Housing was mixed, with starts, new home sales, and house prices all increasing from the prior month, while existing home sales and permits softened. The ISM Manufacturing and Non-Manufacturing indices signaled improving business conditions. All eyes are focused on Washington to gauge the future of the new administration’s core economic initiatives — namely healthcare reform, tax reductions, regulatory reform, and the repatriation of offshore money.

Event Period Estimate Actual Prior Revised
Nonfarm Payroll Feb 200,000 235,000 227,000 238,000
Unemployment Feb 4.70% 4.70% 4.80%
ISM Manufacturing Feb 56.2 57.7 56
ISM Non-Manufacturing Feb 56.5 57.6 56.5
Retail Sales ex Auto & Gas Feb 0.20% 0.20% 0.70% 1.10%
PPI MOM Feb 0.10% 0.30% 0.60%
PPI MOM ex Food & Energy Feb 0.20% 0.30% 0.40%
PPI YOY Feb 1.90% 2.20% 1.60%
PPI YOY ex Food & Energy Feb 1.50% 1.50% 1.20%
CPI MOM Feb 0.00% 0.10% 0.60%
CPI MOM ex Food & Energy Feb 0.20% 0.20% 0.30%
CPI YOY Feb 2.70% 2.70% 2.50%
CPI YOY ex Food & Energy Feb 2.20% 2.20% 2.30%
Industrial Production Feb 0.20% 0.00% -0.30% -0.10%
Housing Starts Feb 1,264,000 1,288,000 1,246,000 1,251,000
Building Permits Feb 1,268,000 1,213,000 1,285,000 1,293,000
New Home Sales Feb 565,000 592,000 555,000 558,000
Existing Home Sales Feb 5,550,000 5,480,000 5,690,000
Leading Index Feb 0.50% 0.60% 0.60%
Durable Goods Orders Feb (P) 1.40% 1.70% 2.00% 2.30%
S&P CoreLogic CS 20-City YOY Jan 5.60% 5.73% 5.58% 5.47%
Personal Income Feb 0.40% 0.40% 0.40% 0.50%
Personal Spending Feb 0.20% 0.10% 0.20%
GDP Annualized QOQ 4Q (T) 2.00% 2.10% 1.90%
Univ. of Mich. Sentiment Mar (F) 97.6 96.9 97.6
P = Partial, T = Second, F = Final
Source: Bloomberg

Click here for a PDF of Glenn Dorsey’s Monthly Recap

Past performance is not indicative of future results. This is not financial advice or an offer to sell any product. Clark Capital Management Group, Inc. reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. It should not be assumed that any of the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein. Clark Capital Management Group, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Clark Capital’s advisory services can be found in its Form ADV which is available upon request. Material presented has been derived from sources considered to be reliable, but the accuracy and completeness cannot be guaranteed. Nothing herein should be construed as a solicitation to buy, sell or hold any securities, other investments or to adopt any particular investment strategy or strategies. For educational use only.