news and events
- U.S. equities were meaningfully higher in April. Advance estimates of real GDP increased by an annualized rate of 3.2% in the first quarter. Elevated inventories, improving trade, and government spending were positive contributors to GDP, but growth is not expected to remain at these levels throughout the year. The unemployment rate remained essentially unchanged at 3.8% in March with employment increasing by 196,000 jobs. Employment growth in the first quarter of the year averaged 180,000 per month compared with 223,000 per month in 2018. Consumer confidence increased in April after decreasing in March but remains below levels seen in the Fall of last year. U.S. manufacturing operating conditions improved in April as new business growth increased to a three-month high.
- International equities and emerging market equities posted positive returns in April. U.K. manufacturing slowed and new export business decreased at the second-fastest pace in four-and-a-half years. Preparations for Brexit in the U.K. continued with companies seeking to lock in prices and certainty of supply. Eurozone manufacturing saw continued contraction as employment growth ticked only slightly higher and business expectations about the year ahead remained pessimistic. Manufacturing in China improved for the second straight month with output and total new work slightly rising.
- Fixed income investment returns were flat in April. Municipal bonds, with low supply and strong demand, are off to their best start in five years. Investors are seeking tax-exempt income as a way to offset the cap on state and local tax deductions set by the government. The Federal Reserve held the target interest rate steady due in part to slowing inflation and declining household spending.
- Broad U.S. stocks were positive (up 4.0%) for the month and on a 1-year basis (up 12.7%).
- Size – Large-cap (up 4.0%) and mid-cap (up 3.8%) equities outpaced small-cap (up 3.4%) equities in April and large-cap stocks led on a 1-year basis over small-cap stocks (13.3% vs. 4.6%).
- Style – Growth stocks (up 4.4%) outgained value stocks (up 3.6%) in the month and continue to meaningfully outperform on a 1-year basis (16.6% versus 8.6%, respectively).
- During the later stages of this business cycle, the fundamental health of the U.S. economy remains solid, supported by a strong labor market and reasonable consumer spending.
- We believe successful investors have the discipline to remain focused on long-term investment goals, maintain a globally diversified portfolio, and avoid the temptation of timing the market.
Sources: Morningstar, Inc., Barclays Capital, Russell and MSCI, U.S. Bureau of Labor Statistics, The Conference Board, IHS Markit, The Federal Reserve (central bank of United States), The Bureau of Economic Analysis (U.S. Department of Commerce) & U.S. Department of Treasury
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All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.
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