- U.S. equity markets advanced 3.9% (Russell 3000) on solid earnings, economic growth and a tightening labor market.
- International equities underperformed domestic equities with a 2.6% loss over the quarter (MSCI ACWI ex U.S.) on trade tensions, moderating growth and a stronger dollar.
- The U.S. fixed income market posted a 0.2% loss (Barclays Aggregate) as interest rates increased modestly. Additionally, the yield curve continued to flatten during the quarter.
- Unemployment fell to 3.8% in May, which marked an 18-year low.
- First quarter GDP growth was reported at 2%. Second quarter GDP growth is expected to have accelerated from that level.
- Large growth continued to outperform large value this quarter with the Russell 1000 Growth outperforming the Russell 1000 Value by 4.6%.
- As trade tensions escalated, U.S. small companies outperformed large caps. Small companies typically derive a larger percentage of revenues domestically. Therefore, they are more insulated from trade wars and are also larger beneficiaries of tax cuts.