A April Overview

The markets have been moving higher over the last month and have now erased the entire correction we experienced in the fourth quarter. Investors have been betting on an improved global economy with the US acting as the primary catalyst. That said, we have seen certain sectors take over leadership while others lag. As an overview:

Technology – leader —Technology has been leading the recovery with names like Apple, Amazon and Google leading the charge. The main reason for the outperformance in this group is simply the strength of our underlying economy and the discretionary dollars that are being created at both the retail and corporate levels. In addition, we are experiencing a lot of innovation around the world today.

Financials – leader — The drivers behind the financial sector are the same as the technology space. The strength in the economy is creating more loans and more business growth that is being funded by the banks. As well, rising rates are typically very good for margins. So, financials are becoming more profitable as rates rise.

Healthcare – laggard — At times, sectors can suffer by their own success. Healthcare has been a leader over the last couple years, but we have started to hear more rumblings about “Medicare for all” which has spooked healthcare investors. Long term, we feel healthcare will be fine, but, in the short-term, it’s lagging.   

 

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