April was another strong month for investors. The much better than expected first quarter gross domestic product (GDP) number and corporate earnings season results were the primary drivers. Specifically, first quarter GDP came in at 3.2% which was much stronger than the 2.5% expected. Financials, mega cap tech stocks and industrials posted particularly strong earnings for the period.
It was a global rally as the international developed markets gained with the EAFE index ending the month up 2.8%. Emerging country stocks trailed their developed counterparts but nevertheless ended up 2.1%.
The investment grade portions of the US fixed income markets were largely flat for April. It was the riskier segments of the bond market posting the strongest returns. Leading the way were high yield bonds which rose 1.4% and the bank loan sector finishing up 1.8%.
During April, mid-cap stocks were the best performing segment of the US market. Growth outperformed value and the Financial, Communication and Materials sectors shined the brightest in what was a solid month for US equities.
Notable Market and Economic Happenings:
- The average S&P 500 stock was up 3.5% for the month and 18.5% year-to-date. Stocks with low P/E ratios outperformed high P/E stocks in April.
- Year-to-date, firms with heavy international revenue exposure outperformed their domestic-oriented peers and stocks that performed poorly in 2018 have bounced back the most in 2019.
- At the end of April, nearly 200 companies had reported earnings with 65% of them exceeding their earnings estimate.
Inspirational Thought for the Day:
“Think twice before you speak, because your words and influence will plant the seeds of success or failure in the mind of another.” – Napoleon Hill