The May employment report confirmed that the job market remains healthy, with job creation showing signs of stabilizing after steadily slowing over the last several years. A healthy labor market should continue to provide support for the economy and consumer spending, and we may even see some acceleration as fiscal stimulus provides incentives that may draw more people into the labor force and encourage businesses to hire.
Small caps are having a strong year, with the Russell 2000 Index up nearly 6% year to date, versus about 2% for the S&P 500 Index. We came into this year expecting small cap outperformance, and after a slow start in early 2018 they have delivered in recent months. Many factors have aligned to drive continued potential leadership from this group. Here we highlight three keys to our small cap outlook.
Lexington and Concord. For many, they’re just names, now. Names out of a history book. But there’s a funny thing about history: When you look closer, new names start to appear. It’s like holding a magnifying glass over a photograph, seeing details leap at you where there were none before. The same is true for the Battles of Lexington and Concord. Look closer and other names will soon emerge. . .
The U.S. dollar has come back strongly. After losing nearly 10% in 2017 and an additional 4% in January, the U.S. Dollar Index has rallied more than 5% off of its February lows [Figure 1]. Gains have been driven by several factors, particularly rising U.S. interest rates, partially due to increasing Federal Reserve (Fed) rate hike expectations, and repatriation of overseas profits as prescribed by the new U.S. tax law. Weakness in emerging market (EM) currencies as a result of several flare-ups in trouble spots such as Turkey and Argentina, along with the populist wave in Italy, have added to support for the dollar. The dollar is important for many reasons, including its impact on international trade and on overseas corporate profits. So, where does the dollar go from here?
If you are a Medicare beneficiary, or if you know someone who is, you should have seen a change on your Medicare card that started in April. . .
“Sell in May and go away” is probably the most widely cited stock market cliché in history. Every year a barrage of Wall Street commentaries, media stories, and investor questions flood in about the popular stock market adage. This week, we tackle this commonly cited seasonal pattern, while focusing on some reasons it may not apply this year.
