Within the capital markets, the month of April was nothing short of busy.
The major equity markets oscillated as investors were barraged with a deluge of corporate earnings releases. Of the half of S&P 500 companies that reported Q1 earnings through the end of April, 80% saw earnings earnings-per-share (EPS) numbers come in above analyst estimates – the highest rate in 20 years. Consumer confidence also unexpectedly rose as the Conference Board’s consumer confidence index 3-month average reached a high water mark not seen in almost two decades. The good news wasn’t enough to convince equity market participants, as the major U.S. indexes ended the month with nominally flat performance.
Meanwhile, the fixed income markets faced a flattening yield curve that saw the U.S. 10 year treasury rise above 3% for the first time since January of 2014. Increased government debt issuance needed to meet the demands of a growing federal deficit continues to stoke the concerns of bond investors who have seen short-term rates move up noticeably while long-term rates changed relatively little. For a more comprehensive recap of the month, please read the attached report.
As the S&P 500 continues to progress well into the second-longest bull market on record, mid-to-late-cycle jitters will likely continue to nag investors who are anxious to catch signals that the party’s over. After all, even at the most oppulent of soirees no one wants to be the last guest standing around the punchbowl. However, in staying with the metaphor for just a moment, seasoned partygoers often plan ahead to limit the potential downsides of their evening. Instead of waiting until the last minute to order an Uber ride home that might never arrive, the more prudent guests arrange their transportation ahead of time even if it might cost a little bit extra to have a car waiting. Predicting when the party ends isn’t their main concern; getting home safely and on their own terms is.
We encourage our clients to remain focused on their long-term goals and the appropriate allocation mix to get them there. Even though the figurative band has been playing for hours and is showing little signs of pausing, having a well-developed and tailored plan in place will help guide you through the next break in song – whether it’s just an intermission or the encore.
Monthly Market Commentary by Dan Miller
The report herein is not a complete analysis of every material fact in respect to any company, industry or security. The opinions expressed here reflect the judgement of the author as of the date of the report and are subject to change without notice. Statistical information has been obtained from sources believed to be reliable, but its accuracy and completeness are not guaranteed. Any market prices are only indications of market values and are subject to change. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request.
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