- After taking a breather in March stocks rebounded in April: The Nasdaq Composite rose an impressive 2.3%, the Dow Jones Industrial Average and the S&P 500 each rose a solid but more modest 1.3% and 0.9%, respectively. Non-U.S. markets were strong too. The EAFE index which captures developed markets in Europe, Australia and the Far East rose 2.2% and Emerging Markets rose 2.1%. Stocks gained in anticipation of improving economic data and earnings.
- The CBOE Volatility Index fell to its lowest level since the beginning of the Great Recession ten years ago. The VIX briefly fell below 10 for only the second time in 2017 after not having fallen below this level in the past eight years, according to the Wall Street Journal. Since hitting its 2017 peak of 16 just prior to the first round of the French presidential election, the VIX has fallen 30% since independent centrist Emmanuel Macron’s win in the first round of the voting. The run-off is May 7.
- Currencies were also impacted by the French vote. The euro surged 2% to its highest level since November 10. Investors were concerned that a victory by either the far-Left or far-Right candidates could jeopardize the euro’s future. In a separate action, the U.S. Treasury delivered its semi-annual currency report, which didn’t include any major trading partners as “currency manipulators,” much to the relief of China, which candidate Trump had promised to target.
* This commentary reflects the opinions of Welch & Forbes based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation.
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