Economy
1. Advance first quarter estimates have GDP declining 6.1%, which is greater than the expected 4.7% decline. However, the number actually was stronger than it looked. There was a surprising rise in consumer spending and a sharp decline in inventories. The figures suggest that the economy may be nearing a bottom.
2. The housing market is beginning to show some signs of life, although a full recovery is still months, if not years, away. The S&P/Case-Shillerhome price index fell 18.6% y/y, compared to 19.0% y/y during the previous month, marking the first month since October 2007 that the annual rate has not reached an all-time low. Prices of single family homes unexpectedly rose 0.7% during the month on a seasonally adjusted basis. Even with the rise, house prices are still down 6.5% y/y and are now 9.5% below their April 2007 peak.
3. Job loss was a big story again during the month. The March unemployment rate came in at 8.5%, a 25-year high. According to ADP employment change data, 742,000 jobs were lost in March, bringing the three-month total to over two million jobs. Initial jobless claims fell during the month, but even with the decline the total number of people collecting unemployment benefits now sits at an all-time high of 6.27 million.
|
Equity Markets
· Stocks ended the month in positive territory across all major indexes.
· Value beat growth across all market caps.
· Domestically, Mid cap value was the leader.
· The best-performing sectors were financials (22.4%), consumer disc (18.7%) and industrials (17.9%).
· The worst-performing sectors were healthcare (-0.7%), utilities (0.6%) and consumer staples (3.3%).
· Emerging markets returned 16.6% for the month and is down the most out of any index over the last year, dropping 42.9%
· All major indexes are now positive over the 1 month and 3 month time periods, but remain negative over the last year.
| Fixed Income Markets
The Federal Reserve left the Fed Funds target rate untouched at its March meeting at a range between 0.0% and 0.25%. Futures markets estimate the Fed to leave rates at this level during its next meeting in June.
The TED Spread, an indicator of perceived risk in the market, continued to fall during the month, retreating back closer to levels before perceived risk spiked to record levels in September.
|
|