Market Comments: As of April 2014
The unusually harsh winter took its toll on first quarter economic activity, as the initial GDP estimate showed a meager increase of 0.1% annually. Still, recent manufacturing and employment data remain positive and point to stronger growth ahead. The market seems comfortable with the Fed’s current path for monetary policy and its decision to further reduce asset purchases to $45 billion a month. While the S&P 500 and DJ Industrial were both slightly positive for the month, the NASDAQ suffered a near 2% decline with investors moving out of technology names and into sectors with higher dividend yields, such as utilities. On average, valuations in foreign markets remain less expensive, and over the past 3 months, those markets (as measured by the MSCI EAFE index) have started to outperform.