Skip to Content
Quarter-End Insights

Our Take on the First Quarter

The market shrugged off global uncertainty to rally in the first three months of 2012.

Mentioned: ,

The ride back in the equity markets from the bottom more than three years ago now has been volatile and nerve-wrecking and looked at times ready to completely stall out. There is still plenty of uncertainty about the path of the recovery and plenty of potential pitfalls in the road ahead, but you wouldn't know by looking at returns in the first quarter. Positive economic data and stabilization in Europe sent stocks almost nowhere but up. Continuing from a strong fourth quarter, the broad-based Morningstar U.S. Index rose 12.5% during the last 13 weeks and is up by more than 9% during the last 12 months and by an annualized 24% during the last three years.

Economic data from the U.S. looked solid in the first three months on the year. As Morningstar's Bob Johnson puts it, the U.S. appears to be on a path of "slow but steady growth." The marquee news came from the employment market. Strong private-sector job growth was seen across the economy, the unemployment rate came down, and more workers are feeling confident enough to quit their jobs voluntarily. Retail sales also looked promising in the quarter. On the downside, news on the all-important housing market remained mixed, and the rising price of gas threatened to slow the economy.

Jeremy Glaser does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.