By Horizon Investments

A mixed week for the global economy saw U.S. housing starts beat expectations but existing home sales and building permits disappointed. Overseas, manufacturing PMI in Germany and France were weaker than expected—yet services PMI in both countries beat forecasts.

U.S. equity investors favored defensive areas of the market, with utilities and consumer staples sectors outperforming for the week. Shares of companies in cyclical sectors such as industrials and materials underperformed on fears that incremental trade tariffs could hurt their bottom lines. Energy shares got a boost late in the week as it became clear that OPEC would not boost oil production as much as originally anticipated.

Internationally, European stocks underperformed due to continued trade and tariff tensions. Meanwhile, a select few emerging markets—including Argentina—outperformed as they were set to be included in MSCI’s emerging markets indices.

In the fixed-income markets, U.S. government-issued securities tended to outperform those issued by European governments. Emerging markets debt stumbled early in the week but ultimately outperformed by the week’s end as many EM currencies recovered some of their previous sessions’ losses.

GAIN: Active Asset Allocation

Stocks delivered unimpressive results overall for the week. There was a rotation away from the market’s top quarter-to-date performers—a pattern of “selling winners” near quarter end that has become increasingly common during the past decade. Such rotations tend to be short lived, typically reversing once a new quarter begins.

Related: Central Banks Weigh In on Global Economy

We’ve also seen significant dispersion in returns among the major global markets (U.S., Europe, Asia, etc.) during the quarter. One example: There is an 18% difference between the performance of U.S. small-cap stocks and emerging markets stocks so far this quarter. That’s the largest quarterly dispersion since 2008. Wide dispersions also currently exist between U.S. large caps, U.S. small caps, developed international and emerging markets stocks.