Third quarter stock market performance was modestly positive. The S&P 500® Index and the Dow Jones Industrial Average both advanced by 1.2%. But that small gain was erased in the first week of October, as worries over trade, manufacturing, and politics took center stage. Still, the U.S. stock market’s year-to-date advance has been impressive; through September 30, the S&P 500® returned 20.6%, its best nine-month run of any year this decade.
The first quarter’s equity markets rebound continued into June after a weak final period of 2018. The S&P 500® Index rose by nearly 4% in the second quarter, bringing the Index’s year-to-date 2019 return to +17%, its best first half performance in 22 years.
On January 28, 2019, Palisade Capital Management Co-Chairman and Chief Investment Officer Dan Veru appeared on CNBC’s “Worldwide Exchange” to discuss the key items for the markets this week: earnings, the Fed meeting, and U.S.-China trade talks.
We believe 2021 will be another favorable year for convertibles and remain a compelling asset class, especially for those that have re-examined their allocation framework and appetite for risk given the rollercoaster ride of 2020.