Global Markets: Good/Neutral
Developed markets are up 5.9% year to date. The big story has been the potential effect of Greece on the Eurozone, which adds some risk to the short term. The strong dollar continues, however, to create a counterbalance causing a trade surplus for Europe and beyond.
U.S. Economy: Good
U.S. Economic data continue to be strong. Job creation continues to grow, as well as housing starts. The U.S. consumer exercised spending above projected rates while still maintaining an above- average savings rate, and corporate earnings were solid. Forward- looking estimates indicate that this is a trend that will continue through 2016.
Inflation continues to be well below historical averages at 1.7%.
Interest Rates: Neutral
Although Yellen’s very cautious stance still seems to be in play, the timeline for future rate increases is shortening.
U.S. Stock Market: Good
Valuations based on projected earnings are presently slightly overdone vs. historical norms, but slightly undervalued if analyzed on a yield basis. In that light, combined with general economic strength, markets should continue to provide performance, especially in sectors such as financials, technology and healthcare.
U.S. Bonds: Cautious
Volatility continues, which favors short duration and high quality to protect portfolio value. The 10 year ended the quarter at 2.35%, with yields rising significantly across the fixed income spectrum. As the markets move closer and closer to interest rate increases, active management of duration, quality, security type and yield will help to temper the effects of rising rates.
Latest Updates & Information
International Markets continue to be the most favored area of investment for the first quarter of 2018 and looking forward for the next 12 months. The best performing asset class in Q1 was emerging market.Read full story here
Recent allocation changes have yielded good results in 2017. A greater exposure to International Equities turned out to be timely. There is still room for normalizing this allocation if you have not done so yet.Read full story here