U.S. stocks wavered in April but the S&P 500 ultimately finished up 0.96%. Yet international holdings outshone the U.S. and were up markedly with emerging markets racking returns of 7.69% and international developed equities 4.08%. Interest-rate sensitive markets were down for the month with global real estate losing 2.96% and fixed income losing 0.36% as interest rates went higher. (Note: there is a general inverse relationship between the movement of interest rates and the return on interest-rate sensitive markets.)
See below for a table of various index performance.
DOMESTIC ECONOMIC HEALTH
Was the economy doing well? Or not as well as commonly believed? Last month, two headlines emerged that affected investor perceptions.
The odds of Greece making its upcoming €200 million payment to the International Monetary Fund seemed to lengthen, even with the IMF extending the deadline to May 6. The Syriza party announced it would stick to its commitment to fully fund Greek social welfare programs and termed the austerity measures implemented as part of the IMF bailout “crimes”. A Grexit could happen in May and the Greek economy – which has already endured the worst recession recorded in any country since the Great Depression – could sink further. As for the broad euro area, its jobless rate remained at 11.3% with consumer prices expected to be unchanged for April after a 0.1% dip for March.8,9
The housing market approached its busiest season with momentum. Existing home sales rose 6.1% for March with the annualized pace hitting an 18-month peak, the National Association of Realtors reported. Existing home prices were up 5.1% year-over-year according to NAR; the 20-city S&P/Case-Shiller home price index measured their annualized improvement at 4.2%. NAR’s pending home sales index followed its 3.6% February advance with a 1.1% gain for March.3,15