2nd QUARTER REVIEW - OUTLOOK
A very strong first quarter earnings season and evidence that the U.S. economy is picking up steam provided a positive backdrop for U.S. equity prices during the second quarter. But trade tensions and concerns over rising interest rates tempered enthusiasm somewhat as volatility remained high. U.S. markets posted positive returns while non-U.S. markets struggled amid the ongoing trade tensions, renewed political uncertainty and evidence of slowing growth, mainly in Europe.
Some of the key developments included:
- U.S. GDP looks to have accelerated during second quarter
- Inflationary pressures have risen
- Fading synchronized global growth theme
- Ongoing trade tensions and maturing economic cycle
Evidence of slowing growth outside of U.S. and talks of trade wars has helped to keep market enthusiasm in check. But the overall fundamental backdrop, particularly in the U.S., remains healthy in our view. Furthermore, we are not too concerned that a full-fledged trade war will emerge but acknowledge there are some risks. The economic cycle continues to mature, and the Federal Reserve remains poised to continue patiently lifting its target interest rate.
To read more about our outlook, please click this link.
Brett Lapierre, CFA, Investment Analyst
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