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After volatility scared investors in the 4th quarter of 2018, holding stocks continued to pay off in February. Once more, U.S. small cap stocks led the charge, rising 5.2%, with large caps following suit, up 3.2%. International developed (+2.5%) and emerging markets stocks (+0.2%) were not as strong but still produced healthy returns. 

Economy

  • Consumer confidence remains near all-time highs.
  • The latest release of unemployment data measured the unemployment rate at 3.8%. Nonfarm payrolls increased by just 20,000, falling short of the expected 180,000.
  • Lower than expected job numbers can partially be attributed to the longer than expected government shutdown that took place earlier this year, squeezing out work for private contractors.

Stocks

  • The S&P 500 gained 3.2% while U.S. small stocks (+5.2%) continued to outpace large stocks in the U.S.
  • On a relative basis, international large (+2.5%) and small (+2.5%) stocks underperformed U.S. counterparts.
  • Year-to-date, U.S. small (+17.0%) and small value (+15.5%) lead all stock asset classes.

Bonds

  • Bond returns were mostly flat in the month of February.
  • International bonds (0.0%) and TIPS (0.0%) remained unchanged from the previous month.
  • Short-term bonds outpaced intermediate-term bonds, up 0.2% compared to 0.1%, respectively.

Alternatives

  • Among alternatives, global REITs continue to have a strong start to 2019, up 11.0%.
  • Commodities continued to push higher, backed by higher oil prices, up 1.0% for the month.
  • Reinsurance (-0.1%) and managed futures (-1.2%) both struggled to push higher in February.

Read our latest Economic and Market Commentary for Market Returns Year-To-Date, Market Returns Longer Term Annualized, Economic Indicators, and an Appendix.


Source: Morningstar Direct

This is intended for informational purposes only and should not be construed as legal, investment or financial advice. Please consult your legal, investment and financial professionals regarding your specific circumstances.