April’s ADE Investment Commentary Released

I. SUMMARY

  • As of March 31st, equity market averages in the U.S. have recovered all of their losses in January and February and are now slightly positive for the year.  They have now equaled their October and November 2015 levels. The recent rally has pushed 93% of stocks in the S&P 500 above their 50-day moving averages, a key indicator of price strength. The rally has been broad based, which is a major positive. The major trend remains lower but this was a powerful bounce. Historically, markets have often traded at least sideways if not corrected after this type of bounce.
  • Foreign stock and bond markets, especially emerging markets advanced in a powerful bounce, but remain in a well-defined long-term downtrend. One of the most unloved areas in the world are emerging market stocks.
  • The U.S. dollar continues to move within its sideways corrective trend. Federal Reserve Chairwoman's dovish comments toward the end of March seemed to influence currency trading. She downgraded her view of the U.S. economy and recognized the severe slowing of the Chinese economy. She walked back rhetoric about future rate hikes as she noted transitory deflationary effects. This coincided with a pullback in the U.S. dollar
  • Commodities continued a furious rally off oversold levels from late 2015. Precious metals, aluminum, copper, zinc and oil all have rallied as the U.S. dollar weakened. According to Bloomberg, gold had its best quarter of performance since 1986!

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