The first quarter of 2023 saw strong gains for stocks and bonds. Investor sentiment was fickle during the quarter as optimism over the resiliency of the U.S. economy was tempered by concerns that tighter financial conditions could derail economic growth. In early March, the failure of two U.S. banks and the collapse of Credit Suisse, one of Europe’s largest and oldest banks, led to a pullback, but the stock market rebounded following aggressive government intervention. The bond markets have been less sanguine about the potential threats to the U.S. economy. The U.S. Treasury yield curve remained sharply inverted, a recessionary signal that suggests investors believe the economy will weaken. Falling bond yields and an attractive level of current income boosted fixed income returns. The retreat in energy prices was a drag on both commodity and stock prices in the sector.