Market Commentary
Concerns over a weak earnings season pushed U.S. large caps into negative territory in March, though smaller cap stocks continued their advance due to the relative strength of the domestic economy. International equities also traded lower as concerns of the impact of a Greek exit from the EMU weighed on investors. Interest rates in the U.S. continued their decline, despite a Federal Reserve which continues to signal that a rise in short‐term interest rates is likely later this year. In the eurozone, interest rates remain negative, supporting fears of deflation but also stimulating domestic consumption.
Market News
  •  Domestic growth remained somewhat subdued in Q4, at 2.2%, with declines in
energy capex and an increase of imports relative to exports on account of the strong
  • Corporate earnings in Q4 declined by 5.6% year over year while earnings estimates
for Q1 are flat or, in the case of the energy sector, being revised downward given the
uncertain impact of low crude prices
  • The ECB's bond buying program has stimulated eurozone consumer confidence,
with retail sales having grown 3.7% annualized in the region, which is the fastest
growth in nearly a decade and well ahead of 2.3% consensus (Bloomberg)
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Notes: 1) Sources: Bloomberg, J.P. Morgan Asset Management, Morningstar, Hedge Fund Research, Bureau of Labor Statistics, Bureau of Economic Analysis. 2) Data as of the date of this report unless otherwise noted. 3) U.S. GDP measures the percentage change during the referenced quarter as published by BEA. 4) Consumer Price Index for All Urban Consumers: U.S. City Average, All Items Less Food and Energy is based on 12-month percent change as published by BLS.

Disclosures: This material is provided for informational purposes only and does not constitute an offer or solicitation by HFS, or its subsidiaries or affiliates, to invest in these indices or their constituent products. The data contained herein are from referenced sources which HFS believes to be reliable. This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. The views expressed are those of HFS. They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. Investing involves a high degree of risk, and all investors should carefully consider their investment objectives and the suitability of any investment. Past performance is not necessarily indicative of future results. All data is as of the date of this report unless otherwise noted.


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