Yes, on the whole global financial markets have had a fabulous quarter with winners outweighing losers, but the question now for investors to consider is, can it go on?
Yes, the bulls roar, no, the bears mutter from their fox holes where they have been forced to take cover after the best quarter for a decade or more for some markets.
The MSCI Global Index was up just over 11%, the MSCI Asia Pacific Index jumped 11% and the Stoxx 600 Index in Europe rose 7.7%.
The Standard & Poor’s 500 Index was up 15%, but Nasdaq surged nearly 19%.
But if we look back to 2011 and 2010, the markets peaked in April and it was downhill from then on.
So could 2012 be the year that clears out the deadwood from 2010 and 2011?
2010 was a down year, 2011 was an even bigger loser (14% for the ASX 200), so the near 7% rise in the ASX 200 in Australia in the three months to Match is yet to fully recover the losses from last year, especially in the second half.
And, investors have to keep in mind that gains like 12% for the Standard & Poor’s 500 and nearly 20% for the Nikkei in Japan, are not sustainable and can’t go on at that rate.
The Nasdaq was up 18.7%, Apple shares nearly 49%, gold just on 7%. Bank of America shares surged by around 40% after being tipped to go bust early in the quarter.
German shares boomed, and the Greek sharemarket outperformed London and Australia, to name a couple.
And, in a positive sign ‘only’ 16 US banks failed in the quarter, down from 28 in the first quarter of 2011, which perhaps part explains the recovery in bank shares and the wider market.
The European Central Bank’s near trillion euros of three year loans to hundreds of banks across the EU played the major part in banishing the blues and giving investors the confidence (and funds) to chase asset values, especially bank shares, higher.
Many of the rises were stunning, from Europe, to the US, to Australia: bank shares all were rebounded. Macquarie Group in Australia rose by around 25%, and that was after another profit downgrade.
But now we have had the huge relief rally (and perhaps something a bit more genuine in the US and Japan), the outlook gets a bit more worrying from the second quarter onwards.
More thoughtful US analysts say watch for a weak second quarter earnings season with earnings and margins not keeping pace with the gains seen last year.
Some say the surge in corporate profit margins will exhaust itself and slow as higher costs (all those millions of new jobs), are felt in results and share prices start easing.
The surge in oil prices in the quarter will damage profits and confidence: especially high petrol prices which were up nearly 39% in the recovering US economy.
And on Friday we get the March jobs report: more than 200,000 new jobs are tipped, but if it’s less than that then markets confidence could take a hit.
Already early guidance for the quarter has more warnings and downgrades than upgrades. Alcoa kicks off the earnings reporting on April 10.
There will have to be a consolidation, profit taking, whatever you call it.
But the performance of many markets in the March quarter would qualify as good to brilliant years if seen over 12 months, let alone three (the Australian market’s near 7% rise was more than OK, compared to all of 2011 and 2010).
The AMP’s chief strategist Dr Shane Oliver is cautious and wrote over the weekend:
"While I don’t see a re-run of the last two years where shares peaked around April only to fall 15 to 20%, it does seem that the ride ahead will become a bit rougher.
"After a 10% or so gain in global shares and 7% in Australian shares so far this year the easy gains have been seen.
"While Europe is looking less scary its still a potential source of mishaps given upcoming elections in Greece and France, budget problems in Spain, austerity fatigue and recession; next year’s fiscal drag equal to 3.5% of GDP in the US may worry investors as could a soft patch in economic data after the strong patch of late; and China hard landing fears remain.
"However, any correction should be mild and we still see share markets higher by year end as valuations remain attractive," Dr Oliver said.
Shares had their best March quarter for 14 years, in many cases, while US markets had their best three months to a decade or more.
Bank shares, the Greek market, German shares, Apple, Brent oil, soybeans, tin, LME copper and especially Japanese shares roared higher, to varying degrees in the quarter.
Brent oil prices rose 14% in London, New York West Texas Intermediate was up 4.2%.
US petrol prices rose nearly 29%, US natural gas prices slumped nearly 28%, while Arabica coffee prices lost 19%.
Copper prices added 11.8% (but are still down on the 23% loses for 2011), but nickel was down 4.3%.
Gold rose 6.7%, after a 3.4% loss in the last quarter of 2011 and the 10% gain across last year as a whole.
Platinum added 17% last quarter as the US car industry recovered.
US dollar did better, but US bonds had a bad quarter, losing 1%.
Ten year bonds started the quarter at 1.88% and ended at 2.16%. At one stage they had risen 0.50%.
Soybeans jumped 17.7% as drought in South America boosted covering by buyers and then a fall in US planting saw another surge.
So looking at markets: The S&P 500 rose 12% (and closed at 1,408.47 early Saturday, our time), its best first-quarter advance since 1998.
The Dow was up a more sedate 8.1% (up 66.22 points on Friday, or 0.5%, to 13,212), its best first-quarter point gain in its history.
But the real star was the Nasdaq Composite (down 0.1%, to 3,091.57 on Friday), up 18.7% for the first qu
