Lower Rate Outlook Help Buoy Stocks

  May 3, 2019

Optimism over progress on U.S. trade discussions with China seemed to overshadow concerns about a slowing economic expansion helping to propel equity indices towards the end of the third quarter.

Gains were broad for the S&P 500 Index with all 11 sectors ending higher for the first quarter, which has not occurred since 2014. Technology, capital goods, transportation, and energy were among the best performing sectors for the quarter, encompassing a broad scope of industries and companies. Commodity prices also rose in the first quarter, validating a demand for economically sensitive materials.

A counter-intuitive environment has driven stocks higher while the bond market is signaling slower growth. Some equity analysts are expecting a slowdown in corporate earnings growth as global demand projections have been trimmed.

Sources: S&P, Bloomberg, Reuters

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