• It was a busy week for economic data, with several key releases including 1^st Quarter GDP—which disappointed.  The Friday release of job growth, however, was strong.
• The Russia/Ukraine situation continues to simmer, but not yet boiling over, despite regional incidents and increasing sanctions against targeted Russian interests.

U.S. stocks experienced another up week with M&A activity picking up and decent economic news.  From an earnings standpoint, three-quarters of firms in the S&P have reported, and three-quarters of those topped estimates (of course, on lowered expectations), with growth of 4% over a year ago.  From a sector standpoint, telecom and technology stocks outperformed, while utilities and energy lagged.  Small caps again showed weakness versus the larger-cap group.

In foreign markets, U.K. gained 2.5%, outperforming Europe and Japan—all outperforming the U.S. on the week.  Mario Draghi of the ECB had apparently mentioned in a meeting that quantitative easing could be a policy option, but was unlikely—offering a mixed message.  Interestingly, EU consumer confidence has now reached its highest point since 2007, although it remains negative in the majority of countries (U.K. and Germany being the exceptions among the larger nations).  The problem children of the emerging markets, such as Russia and Turkey, were interestingly the best performing stocks on the week.  China was one of the few losing regions on the week.

Bonds had a good week, with rates falling following a weak GDP report and Ukrainian concerns.  Long-term bonds experienced the best returns, in both treasuries and corporates.  Emerging market bonds also performed well, outperforming developed market issues, especially those of Japan.  Continue reading →