While it is rarely as simple as one thing, we believe that the correction in risk assets during the first quarter was substantially driven by a growing fear that slower economic growth would lead to a recession.  Indeed, credit spreads, the difference between the yield on corporate bonds (investment grade and high yield), went to levels usually only seen heading into recessions.  We maintained throughout the first quarter that markets were worrying too much about the sustainability of the current global expansion.  In the dark days of February, it might have seemed hard to believe that the S&P would finish the quarter virtually unchanged.

David Fuller's view

Here is The Weekly View.

The US stock market has been a standout performer relative to most other countries in recent years, with only New Zealand clearly outperforming among those with viable currencies. 

The world’s largest economy remains impressive, with its technology lead, an ability to be self-sufficient in energy when prices firm, a steady currency, and a growing list of global Autonomies (leading multinational firms).   

However, the US economy is not firing on all cylinders.  In fact, since 2008 it has been growing at its slowest rate since the Great Depression.  Corporations are understandably cautious and either sitting on cash or using it for share buybacks.  This flatters earnings which in any event have been easing on average for the last three quarters.