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Ivan Gruhl, Chief Investment Officer, HK Financial Services

 

Overview:  Stocks had their best week since November last week, recovering the prior week’s losses. Major indices in both the US and globally were up between 2.5%-3% for the week. The gain was driven by strong earnings from technology companies, decent economic data and perceived developments in China trade talks. In Europe, positive data from manufacturing and Brexit developments helped drive stocks higher. Bond yields were slightly lower for the week with the 10-year ending at 2.59%, about 10 bp lower than the start of the year. Bond returns have been solid with the Bloomberg Barclays Aggregate Index up 1.7% and the Barclays muni index up 1.8% year-to-date. Returns have been led by the non-Treasury sectors as falling risk premiums have aided investment-grade credit and high-yield bond returns.

 

Looking ahead:  Economic data is light this week, highlighted by home sales data on Friday. Focus for the week will be on the 2-day Federal Reserve meeting, which concludes on Wednesday with FOMC forecasts and a press conference from Fed Chair Powell. Investors will also be watching Brexit developments. The U.K. Parliament rejected Prime Minister May’s latest withdrawal agreement and held a vote to seek an extension to the March 29 deadline. Any extension to the deadline would need agreement from all 27 EU members.

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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