The Markets (as of market close May 18, 2018)
Small and mid caps outperformed large caps during moderate trading last week. The small cap Russell 2000 was the only index posting notable weekly gains and edged closer to the Nasdaq in year-to-date performance. While investors may have moved away from stocks last week, they didn’t necessarily put their money in long-term bonds, as prices fell and yields climbed higher. The yield on the 10-year Treasury note reached 3.12% last Thursday – a seven-year high. At BWFA, we continue to maintain a bias away from our Income category and specifically away from longer duration bonds.
LAST WEEK’S ECONOMIC HEADLINES
- Retail sales of consumer goods and services increased in April and are up 4.7% over the past 12 months.
- The number of building permits and housing starts fell in April from March, but housing completions increased.
- Industrial production rose in April, according to the Federal Reserve report. This marks the third consecutive monthly increase. Over the last 12 months, industrial production has increased 3.5%.
EYE ON THE WEEK AHEAD
The housing market rebounded in March as both new and existing home sales experienced positive growth over the prior month. The residential sales figures for April are out this week and will certainly be impacted by scant inventory. March also was a good month for durable goods, as new orders increased by 2.6%. April’s information should prove similarly positive.