The S&P 500 gained 1.79 percent in March to close at 2834.40 as optimism over the trade negotiations between the U.S. and China and a 180 degree pivot by the Federal Reserve fueled the advance. The S&P gained 13 percent in the first quarter following the 13.9 percent decline in the fourth quarter of 2018. However, despite the impressive snapback, it is important to note that the S&P 500 traded at the 2834 level back in January 2018.
Of greater concern is that for the first time since 2007, the yield on the 10-year U.S. Treasury Note was lower than the yield on the 3-month U.S. Treasury Bill, which is known as an inverted yield curve. Specifically, on March 28, 2019, the yield on the 10- year Treasury was 2.39 percent while the yield on the 3-month Treasury Bill was 2.43 percent. The significance of an inverted yield curve is that it preceded the last three downturns as seen in the chart below, and has also preceded every recession over the past 50 years.