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April 1 – April 5 Week in Review

The markets continued their winning ways last week to start the second quarter, extending their winning streak to seven straight sessions and setting a new closing high for the year. Investor sentiment was boosted by positive manufacturing data out of the U.S. and China, progress on the trade talks, and a mostly positive Employment Situation Report for March.

For the week the S&P 500 gained 2.06%, the Dow Jones Industrial Average gained 1.91%, the Nasdaq Composite gained 2.71%, and the Russell 2000 gained 2.78%.

The S&P 500 materials, financials, and consumer discretionary sectors led the broader market higher. Finishing lower were the defensive-oriented consumer staples and utilities sectors.

Stocks rallied to begin the week, spurred on by better than expected manufacturing activity for March out of the U.S. and China. The data helped reinforce the idea that global economic activity could be close to, or near, a bottom, which could potentially lead to a pickup in earnings growth later in the year.

The broader market drifted higher throughout the week as the U.S.-China trade talks appeared to progress favorably in Washington. Seemingly key issues like forced technology transfers and enforcement mechanisms have yet to be resolved, though. President Trump said it will be known probably in the next four weeks or so if a deal will get done.

Friday's release of the Employment Situation Report for March showed a rebound in job growth without stirring concerns about wage inflation, which provided more fuel for the rally. Overall, the report helped expose February's weak payrolls data as an aberration and drive the notion that the economic expansion in the U.S. still has more room to run.

Leadership from the Dow Jones Transportation Average and the Philadelphia Semiconductor Index reflected some of this growth optimism. Delta Air Lines led the airline and transport stocks higher after providing upbeat results and guidance. Semiconductor stocks received a boost from a Digitimes report suggesting Taiwan Semiconductor, which is the largest contract semiconductor foundry, is seeing a rebound in chip orders.

In corporate news Walgreens and Tesla were left out of last week’s rally after delivering disappointing news. Walgreens surprised investors with worse than expected earnings results and guidance. Tesla also surprised investors by reporting a steep decline in Q1 deliveries and said the results will negatively affect the company's Q1 net income.

On the interest rate front U.S. Treasuries pulled back last week, driving yields higher across the curve. The 2 year yield increased seven basis points to 2.34%, and the 10 year yield increased nine basis points to 2.50%.

In other markets the U.S. Dollar Index increased 0.1% to 97.40 last week. In Nymex trading WTI crude rose 4.9% last

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This commentary is a matter of opinion and is for informational purposes only. It is not intended as investment advice and does not address or account for individual investor circumstances. Investment decisions should always be made based on the client's specific financial needs, goals and objectives, time horizon and risk tolerance. The statements contained herein are based solely upon the opinions of Telemus Capital, LLC. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.

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