Pennsylvania Trust

Both Micro and Macro Have Helped the U.S. Outperform Peers

Both Micro and Macro Have Helped the U.S. Outperform Peers

Corporate earnings continue to be promising as U.S. companies are generally reporting better than expected 4th quarter results. When combined with strong economic data which continue to show the strength of the consumer (housing, employment and discretionary spending), it’s no surprise that U.S. markets continue to expand. Even the most recent reading of the manufacturing sector showed stabilization in America’s factories.

The positive sentiment appears widespread, as optimism among U.S. small businesses (the largest private segment of the economy) advanced in January for the third time in the last four months as owners grew more upbeat about sales prospects, indicating the economy started the new year on steady footing.  New job creation jumped in January, with an average addition of 0.5 workers per firm, the highest level since March 2019.

Additionally, fears surrounding the Coronavirus have also led to further strengthening of everything U.S. From the dollar, to bonds, to equities, a general flight to quality has continued to separate the U.S. markets from their global peers. Over the past year, the U.S. has outperformed the major markets by 10% to 20% (see chart for major ETF examples).

Disclosure: This Commentary represents a review of topics of possible interest to Pennsylvania Trust’s clients and is not personalized investment advice. It contains Pennsylvania Trust’s opinions, which may change following the date of publication. Information obtained from third-party sources is assumed to be reliable but is not guaranteed. No outcome — including performance — is guaranteed, due to various uncertainties and risks. This document is not a recommendation of any particular investment. Investment decisions for clients are made on an individualized basis and may be different from what is expressed here. Past performance is no guarantee of future results.