Investment Review - May 2018
- The major U.S. equity indices were slightly positive in April. The Dow Jones Industrial Average gained 0.2%, the Nasdaq Composite rose 0.1%, and the S&P 500 returned 0.4%. Though the threat of a trade war has been dissipating, inflation concerns have held the market back.
- S&P 500 earnings growth remains strong. With a majority of companies reporting their Q1 results in April, 80% have reported EPS above estimates. Q1 earnings were up 25% year-over-year. Revenue growth has been strong, up 8% and net profit margins improved to 11%. Tax cuts were a key driver to margin improvement.
- Yields on the benchmark 10-Year Treasury Note reached an intraday high of 3.0% on April 25. The 10-Year last reached 3.0% in 2014. Higher yields make bonds more attractive and may present a headwind to the equity markets.
Sources: Bloomberg, FactSet, Wall Street Journal, U.S. Department of Labor, Federal Reserve, Institute for Supply Management, ISI, The Economist
Disclosure: This commentary reflects the opinions of Welch & Forbes based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation.
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