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Ivan Gruhl, Chief Investment Officer, HK Financial Services

 

Overview: Stocks around the globe were mostly down last week, with the exception of emerging market equities. The Federal Reserve concluded their March meeting last Wednesday with the expectation of no further interest rate increases for the remainder of 2019. In addition, it was announced that the partial unwinding of the $4 trillion balance sheet is expected to be completed by September of this year. These positive events were offset by a downward revision by the Fed to GDP growth and weak purchasing managers data out of Europe where PMI was reported at a 71-month low of 47.6 (where a reading of 50 is considered neutral growth).

Geopolitical events, Brexit worries and U.S.-China trade issues continue to weigh on the market. In fixed income, U.S. Treasury bonds rallied after the Fed’s decision to hold rates steady, and the 10-year Treasury finished at a 14-month low of 2.45%, down in yield from 2.68% at the start of the year. With the 3-month T-bill trading at around 2.46%, the 3-month/10-year spread is negative for the first time in 12 years. Bonds are up strongly in March with the Bloomberg Barclays Aggregate index up 1.6% for the month and 2.6% for the year-to-date.

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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