Market Commentary: We have closed the books on the month of April, and it turned out to be quite a good one with the S&P turning in its best monthly performance since 2003. Many domestic markets pushed to new highs multiple times during the month, and the Dow Jones Industrial Average surpassed the 13,000 milestone for the first time in history. However, not all segments are at new highs – the Nasdaq Composite Index finished the month of April at just 50% of its historic peak. Many analysts are concerned about the continuation of this bull market given that it is now one of the longest on record, that we are entering what many believe to be a weak seasonality period (May through October), and that earnings growth is expected to slow. The counter arguments tend to focus on the high level of take-over activity and the fact that the earnings-yield from stocks is higher than the yield from Treasury investments.
Sectors: Energy and Utilities share the top sector ranking this week, and Health Care has moved up another notch to #3. Last week we remarked about the signs of life in the semiconductor industry, and we had some additional follow through this week. This has helped push the Technology sector higher in our rankings, but Technology needs to make larger and more sustainable advances if it wants to overtake Utilities, Energy, and Materials – the sectors that have been driving the bull market of the past few years.
Styles: It looks like all styles are created equal this week as we have a virtual 8-way tie for the top spot in our style rankings. Eight of the eleven categories in our style rankings are crowded together within a tight 20-23 RSM range. The three that didn’t make the top tier include Small Cap Value (15), Small Cap Blend (11), and Micro-Caps (8).
International: The European Union has taken over the top spot in our global rankings for the first time in more than five years (possibly more, but the history of global trading vehicles for the categories we use is rather sparse beyond five years). Sweden, Netherlands, Germany, and Austria are big contributors to the strength of the European Union’s equity markets. China continues to lose momentum and has once again slid below the USA. Japan held up well in the late February / early March sell-off, but that short-term relative strength has not converted into anything longer term yet, and Japan is once again the weakest global market.
Sectors: Energy and Utilities share the top sector ranking this week, and Health Care has moved up another notch to #3. Last week we remarked about the signs of life in the semiconductor industry, and we had some additional follow through this week. This has helped push the Technology sector higher in our rankings, but Technology needs to make larger and more sustainable advances if it wants to overtake Utilities, Energy, and Materials – the sectors that have been driving the bull market of the past few years.
Styles: It looks like all styles are created equal this week as we have a virtual 8-way tie for the top spot in our style rankings. Eight of the eleven categories in our style rankings are crowded together within a tight 20-23 RSM range. The three that didn’t make the top tier include Small Cap Value (15), Small Cap Blend (11), and Micro-Caps (8).
International: The European Union has taken over the top spot in our global rankings for the first time in more than five years (possibly more, but the history of global trading vehicles for the categories we use is rather sparse beyond five years). Sweden, Netherlands, Germany, and Austria are big contributors to the strength of the European Union’s equity markets. China continues to lose momentum and has once again slid below the USA. Japan held up well in the late February / early March sell-off, but that short-term relative strength has not converted into anything longer term yet, and Japan is once again the weakest global market.
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