Where Are All the Mixed Signals Are Coming From? | ETF Trends

By Salvatore Bruno via Iris.xyz

March market breadth was positive across multiple asset classes. U.S. Equities were positive with the S&P 500 Index returning 1.94% and the MSCI EAFE Index also positive at 0.97%. Major fixed income asset classes were also positive during the month with the Bloomberg Barclays U.S. Aggregate Bond Index positive +1.92%. The Bloomberg Barclays U.S. Treasury Bond Index performed positively from the downward shift of rates across the yield curve, posting a 1.91% return. Corporate fixed income credits were also up, with Investment Grade and High Yield indexes returning 2.50% and 0.94%, respectively (as represented by the Bloomberg Barclays indexes).

Oil prices continued to rise in March as decreases in global production have helped to prop-up prices. With the U.S. Dollar Index up 0.72% versus a basket of foreign currencies, the precious metals index was down -2.19% while the industrial metals index was up 0.70% as trade discussions and the health of global economic growth continue to be debated. Agricultural commodities underperformed as the U.S. maintained its rhetoric of southern border security potentially impacting agricultural imports from southern countries.

Four of the eight hedge fund strategies were positive in March. Equity Hedge, Market Neutral, Merger Arbitrage and Global Macro strategies were positive while Relative Value strategies were negative. Among the Event-Driven strategies, Merger Arbitrage was positive and Event-Driven and Distressed strategies were negative.

Economic Data

U.S. fourth quarter GDP was adjusted to 2.2%, down from the earlier advanced figure of 2.6%. Personal Consumption figures were also down, 2.5% from 2.8%.

From a labor standpoint, payroll figures surprised on the downside when the change in non-farm payrolls was reported at 20,000, down from the prior 304,000 and far-off the survey estimate of 180,000. Unit Labor Costs rose by over a per-cent to 2.0% from 0.9%. While the Labor Force Participation Rate stayed firm at 63.2%, the underemployment rate dropped to 7.3% from 8.1% and the unemployment rate dropped to 3.8% from 4.0%.

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