Up! Up! and Away!
Equity markets continued their blistering ascent during the month of April. The major indices finally made new all-time highs toward the end of April, after previously peaking at the end of September 2018. This was the second longest period in the past four years that the markets made new all-time highs after a sell off, the longest of which was back in 2016.
The primary political and economic factors that have positively impacted the market in April are: 1) Europe – the European Union has been firming up economically, reducing the fears of an messy Great Britain exit from the Euro 2) Corporate earnings – US corporate earnings for the first quarter are coming in much better than expected, indicating an earnings recession that was widely predicted is not materializing, and 3) the Federal Reserve – continued declaration of patience in further rate raises has calmed the market fears that raising rates will significantly slow down growth and lead the US economy into recession.
For the time being, there is a sense of calm across most financial markets. As of the beginning of May, 77% of the S&P 500 company reported earnings have beaten their estimates and revenue growth is on pace for a 5% increase year over year. The S&P climbed 3.6% in April, and the market continues to make new all-time highs as we enter May.
Enjoy the early spring and anticipation of warmer months to come. We will continue to diligently monitor the financial markets. We anticipate maintaining full exposure to our target equity allocations for the upcoming month, so we participate in any ongoing advances in the market — ensuring your risk appropriate share of future appreciation.
Contact us with questions anytime. We welcome questions and feedback.
Because of the information on this blog are based on my personal opinions and experience, it should not be considered professional financial investment advice. No financial decisions should be made based off this article without consulting with your financial advisor first.
