Economic Update 4-27-2026

Economic data included gains in retail sales, as well as improvements in S&P Global PMI data for manufacturing and services. These offset further declines in consumer confidence.

Equities were mixed in the U.S. and emerging markets last week, as international developed market stocks fell back. Bonds were down globally as yields and inflation fears rose. Commodities saw gains led by another spike in crude oil prices.

U.S. stocks bounced around a bit last week, as concerns remained about the durability of the ease in Middle East tensions. By Wednesday morning, the U.S. administration extending the U.S.-Iran ceasefire “indefinitely” caused the positive boost in sentiment to continue in a muted fashion, although investors were also fixated on corporate earnings. Sector results were mixed, with gains of over 4^ in technology and energy, followed by consumer staples, while declines were most pronounced in health care, financials, and communications. Real estate also pulled back a few percent, along with a rise in yields.

Earnings season for Q1 is moving along, with nearly 30% of S&P firms having reported actual results, with nearly 85% reporting a positive earnings surprise and over 80% a positive revenue surprise. The blended earnings growth rate for the quarter remains at a robust 15.1%, over double the long-term average pace, with a profit margin of 13.4%, which is the highest in five years. Investor focus remains tied to AI demand, AI infrastructure spending, and consumer spending generally in light of higher costs caused by oil.

Foreign stocks fell back last week along with the continuation of a largely closed Strait of Hormuz and uncertainty about the Middle East conflict generally. The macro concerns outweighed all else, but was not helped by weaker European economic data, uncertainty about the Bank of Japan’s next interest rate movements, as well as a stronger U.S. dollar for the week, which acted as a headwind to foreign stock performance. Emerging markets fared better, flattish on net, with tech-oriented South Korea and Taiwan seeing strong gains to offset negatively elsewhere. China left its benchmark 1-year policy rate unchanged at 3.0%, where it’s been for much of the past year, with an acknowledgement of a balance of internal and external risks.

Bonds fell back last week along with rising yields, in keeping with inflation concerns driven by higher oil prices. U.S. Treasuries and investment-grade corporates performed largely in line, while foreign bonds lagged along with the headwind of a stronger U.S. dollar.

Commodities saw another positive week for the most part, with gains in energy, industrial metals, and agriculture outweighing a drop in precious metals. West Texas crude oil rose another 13% last week to $95/barrel, with Brent up 18%, along with continued military actions in the Strait of Hormuz.

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Sources:  LSA Portfolio Analytics, American Association for Individual Investors (AAII), Associated Press, Barclays Capital, Bloomberg, Deutsche Bank, FactSet, Financial Times, Goldman Sachs, JPMorgan Asset Management, Kiplinger’s, Marketfield Asset Management, Minyanville, Morgan Stanley, MSCI, Morningstar, Northern Trust, Oppenheimer Funds, Payden & Rygel, PIMCO, Rafferty Capital Markets, LLC, Schroder’s, Standard & Poor’s, The Conference Board, Thomson Reuters, U.S. Bureau of Economic Analysis, U.S. Federal Reserve, Wells Capital Management, Yahoo!, Zacks Investment Research.  Index performance is shown as total return, which includes dividends, with the exception of MSCI-EM, which is quoted as price return/excluding dividends.  Performance for the MSCI-EAFE and MSCI-EM indexes is quoted in U.S. Dollar investor terms.

The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness.  All information and opinions expressed are subject to change without notice.  Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product.