Friends,

 Once again, most major domestic equity indexes were up in April. The S&P and Nasdaq 100 were both up about 4%. The Dow Jones Industrial average was up over 2.00%. The Russell 2000 was up over 2.25% for the month. Year to date the Russell 2000 is up over 16%, the S&P 500 13.50% and the Nasdaq 100 9.40%.

 Internationally, European markets have mostly kept pace with the US notching gains of about 11%.  The Nikkei 225 and Hang Seng are up 5.00% and 6.50% respectively.

 This year US small and mid-cap stocks are some of the best performers with gains of approximately 20%. REITS are up about 17.50%. Interestingly enough, these were some of the asset classes that were impacted most as a result of the Covid shutdown. These return disparities highlight the importance of a well-diversified portfolio that allocates to wide variety of asset classes.

 US Government bond prices stabilizes in April. Yields on longer dated US Treasury Bonds dropped by about 5 basis points driving bond prices slightly higher. 

 Municipal bonds have significantly outperformed US Treasuries this year as investors continue to seek tax efficient assets.  Municipal bonds are largely unchanged on the year. As mentioned in our March newsletter, this is something we are keeping a keen eye towards as higher interest rates could eventually impact other asset classes.

 In our March newsletter we also talked about the escalating price of lumber and how the shortage is causing the price of lumber to skyrocket. Lumber was up another 45% in the month of April. Lumber is now up close to 500% in a year.  It’s not only the cost of homes that are going higher.  A single piece of plywood at your local hardware store is now close to $100.

 This is inflation and will have a significant impact on the price you pay from home improvements to furniture.

 The US government measure inflation CPI.  CPI is a consumer price index that measures the average change over time in the prices paid by consumers for market-based consumer goods and services. The graph below illustrations the monthly annual print back 10 years.

CPI YEAR ON YEAR

As you can see, it averages approximately 3%.  Unfortunately, most consumers experience inflation far greater than the CPI print.  Fuel, higher education, car insurance and medical services are up about 12% annually over the last 20 years. 

 Historically, real estate, precious metals and stocks have been good long-term hedges against inflation.

As always if you have any questions feel free to reach out.

Best,
Bob

This material is intended for general public use and is for educational purposes only.  By providing this content, Park Avenue Securities LLC is not undertaking to provide any recommendations or investment advice regarding any specific account type, service, investment strategy or product to any specific individual or situation, or to otherwise act in any fiduciary or other capacity.  Please contact a financial professional for guidance and information that is specific to your individual situation.  Russell 2000 Index measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalization. Dow Jones Industrial Average is a widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but also includes financial, leisure and other service-oriented firms.  Indices are unmanaged, and one cannot invest directly in an index. Past performance is not a guarantee of future results. All investments contain risk and may lose value. Investing in the bond market is subject to certain risks including market, interest rate, issuer, credit and inflation risk. Equities may decline in value due to both real and perceived general market, economic and industry conditions. `S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. NASDAQ Composite Index is a market value-weighted index that measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ stock market. Each company's security affects the index in proportion to its market value Add Pinpoint # 2021-120675 Exp 05/22  

Source Bloomberg