Review and Outlook: Q1 2018

Executive Summary

April 11, 2018
John Augustine, CFA, Chief Investment Officer

The Return of Volatility

Markets started the year with a powerful January. Investors were consistently buying stocks and selling bonds during the month. The return for the S&P 500 in January exceeded 5% for only the 13th time since WWII, and the yield on the 10-year Treasury note rose from 2.41% to 2.71%.

That all changed in February and March as the headlines focused on inflation, central banks, trade, politics and a slow start in the economy for the year. George Mokrzan, Randy Hare and Kirk Mentzer will have summaries of that activity in their reports later in this publication.

The passage of the tax bill in late December confirmed the optimism for the US economy that had been building consistently throughout 2017. Regardless of the current headlines around trade and technology companies, we suspect optimism will turn into action during 2018 with increased corporate investment and slowly building consumer spending as the year progresses.

What will get more interesting in markets as the year progresses will be the pace of the economy, the inflation it produces, and how the Federal Reserve will react to all of this.

Our goal in the Huntington Private Bank is to have the proper diversification for investor outcome intentions (growth, income or principal preservation) with respect to the accounts we manage. We are currently investing into the thesis of a growing US (and global) economy, with corporate profits improving noticeably and inflation slowly moving higher to levels more desired by the Federal Reserve.

Managing through the current volatility has been our focus this quarter, with our Strategy Team making several adjustments to portfolios where we have full authority and follow a stated direction of investment. We suspect the volatility could calm in the second quarter at some point, but we will remain diligent of the headlines and new fundamental information as it develops.

For more insights on The Economy, Fixed Income Markets and Equity Markets, please read the entire article.

Read the entire article (pdf)

Huntington Private BankSM is a team of professionals dedicated to delivering a full range of wealth and financial services. The team is comprised of Private Bankers, who offer premium banking solutions, Wealth and Investments Management professionals, who provide, among other services, trust and estate administration and portfolio management from The Huntington National Bank, and licensed investment representatives of The Huntington Investment Company, who offers securities and investment advisory services. Huntington Private BankSM is a service mark of Huntington Bancshares Incorporated.

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