U.S. economic data released last week painted a mixed picture. Better-than-expected results in initial jobless claims and industrial production, and from the Federal Reserve Bank of Philadelphia’s Manufacturing Business Outlook Survey, were offset by disappointing results in terms of housing starts, The Conference Board’s index of leading U.S. economic indicators, and the Empire State Manufacturing Survey.
Internationally, Japan reported better-than-anticipated GDP growth for the first quarter, while Europe’s economic reports were in line with expectations. The UK continues to generate economic results that beat estimates, including CPI (inflation) and PPI (producer prices).
U.S. equity markets were weighed down by political uncertainty. Shares of precious metals mining companies were the strongest performers for the week as global political concerns pushed prices of “safe haven” precious metals higher. Meanwhile, bank stocks underperformed as interest rates fell.
Developed international markets—including Europe and Japan—outperformed U.S. markets for the week driven by their strengthening economic data and currencies. Emerging markets in Latin America, specifically Brazil, underperformed for the week due to concerns about political uncertainty in Brazil.
In fixed income markets, long-duration sovereign debt outperformed other bond market sectors. International sovereign bonds performing particularly well. Emerging market debt underperformed on political turmoil in Brazil, while credit-focused bonds in the U.S. struggled.
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