The second quarter of 2019 finished with the strongest June for US stocks in more than half a century despite evidence of weakening global production precipitated by ongoing trade conflicts. Against this backdrop, capital spending expectations have come down which threatens the modest acceleration in labor productivity experienced the past couple of years. The vitality of US equity markets stood in stark contrast to survey results showing fund managers were the most bearish since the financial crisis in 2008. While this negative sentiment seemed like an unlikely backdrop for a market rally, strength in the service sector, continued spending by US consumers and commitments by many central banks to “support economic activity” were more than enough to outweigh negative headlines. A sudden slowdown in cloud and data center spending hurt performance in the Information Technology sector; the sector accounted for approximately half of the strategy’s underperformance during the quarter. Strong performance in the Insurance sector helped results.____________________________
Information contained herein was obtained from recognized statistical services and other sources believed to be reliable and we therefore cannot make any representation as to its completeness or accuracy. Any statements not of a factual nature constitute opinions which are subject to change without notice.
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