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Ivan Gruhl, Chief Investment Officer, HK Financial Services

 

Overview: March 6 marks the 10-year anniversary of the bull market in U.S. stocks. The S&P 500 hit an intraday low of 666 on March 6, 2009, and has since more than quadrupled to current levels. The economy has expanded slowly over this record run. Unlike every previous post-war expansion, GDP growth has not surpassed 3% in any of the 10 calendar years. In economic news, U.S. GDP rose 2.6% in the fourth quarter of 2018, above consensus expectations of 2.2%. The fundamentals of economic data, low and stable interest rates, and corporate earnings remain solid.

Markets digested news this past week including an abrupt end to the U.S.-North Korea meeting between President Trump and Kim Jong Un. In addition, tensions rose with military action flaring between India and Pakistan. For the trifecta, we had Michael Cohen’s tempestuous testimony before Congress. Trade talks between the U.S. and China continue and have lent cautious optimism to investors. Stocks globally were generally higher with the S&P 500 up about 0.4% for the week. Yields in the U.S. were higher with the 10-year Treasury rising to 2.75% from 2.68% at the start of the year. The total return on the taxable Aggregate bond index is now a positive 0.8% for the year with municipal bonds up 1.2%. The yield on the overall Aggregate index is now 3.25%, offering a solid carry advantage over short-term rates.

 

Weekly Returns and Data

 

This communication is for informational purposes only. It is not intended as investment advice or an offer or solicitation for the purchase or sale of any financial instrument.

Indices are unmanaged, represent past performance, do not incur fees or expenses, and cannot be invested into directly. Past performance is no guarantee of future results.

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