Kai W. Hong, CFA
Managing Director & Chief Investment Strategist

April began with an air of collective uncertainty settling over the markets. However, that uncertainty had an oddly sedating effect as news which in the past would have elicited a reaction by investors (e.g. a US missile strike on Syria) was generally shrugged off. Volatility reached unusually low levels which gave rise to an overall sense of complacency despite a myriad of potential shocks in the background from missile tests in North Korea to the rise of the National Front in the French election. Political action in the US was more noise than substance as many observers began to heavily discount the statements and posturing coming out of the administration. Company earnings and overall economic growth were positive (although modest), and M&A activity was robust. But expectations and valuations were at such levels that company financial misses were typically met with dramatically negative price action.

The Russell 3000 Index finished the month at +1.1%. At the sector level, Consumer Discretionary, Technology, and Producer Durables were leaders while Energy was the main negative performer for the month. US small cap stocks were largely in-line with large caps with the Russell 2000 Index returning +1.1% as well. Outside of the US, market performance was slightly stronger as the developed market MSCI World ex USA Index returned +2.1% while the developing market MSCI Emerging Markets Index returned +2.2%.