Market and Economic Commentary

1st Quarter 2019
Summary: Overview

Domestic and international economies appeared to slow in late 2018 on fears of an impending U.S. Government shutdown, Brexit, and uncertainty related to trade problems/negotiations with China.  Weak data from China compounded these fears, especially among manufacturers.

However, recent data-points and corporate outlooks suggest a modest recovery in the U.S. and global economies heading into Spring.  The U.S. labor market remains strong, housing appears to be picking up with lower interest rates, and the U.S. consumer generally appears to be in good shape.  Recent stimulative measures by the Chinese government have begun to improve the outlook for Asia and Europe.

After signaling as late as November that rate increases would continue, the Federal Reserve made a quick U-turn on rate hikes.  Chairman Powell indicated several times at the beginning of 2019 year that the Federal Reserve may be done with rate increases, at least through the end of the year.  This stance is good news for the markets because it may keep the yield curve from fully inverting.

Forward earnings estimates show growth for 2019 but have been drifting lower on concerns of decelerating global macroeconomics.  Stabilization at this point would represent approximately 4.4% growth for 2019.

Download the full report in pdf here: IMVA Investment Review-April 2019

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