As the stock market in the US nears the end of a challenging first quarter, investors are considering what can help equities in the months ahead, with high cash levels at companies one possible boost as CEOs use cash for share buybacks and dividends or mergers.
According to a jobs report, the US economy is recovering, and employers are hiring aggressively, adding 431,000 jobs (March 2022). It demonstrates the economy’s resiliency amid a still-destructive pandemic, Russia’s assault on Ukraine, and the highest inflation in 40 years.
Despite day-to-day volatility, stocks made a strong return in the second half of March, with the S&P 500 rallying more than 10% from its year-to-date low. Market observers attribute the rally to optimism about the potential of a peace agreement between Russia and Ukraine and investors reacting to the Federal Reserve’s interest rate hike.
According to LPL Financial’s Ryan Detrick, April has historically been a great month for stocks, with the S&P 500 returning positive in 15 of the last 16 years. Stocks are currently experiencing several challenges that might upend this historically strong seasonality.