Stocks advance as strong corporate earnings boost performance

May 1, 2017

What happened in April?

Stocks advanced as strong corporate earnings boosted performance.

With almost 60% of the S&P 500 companies having reported 1st quarter performance thus far, corporate earnings are expected to rise over 10% from the prior year. This positive performance pushed stocks higher in April as optimism for accommodative trade policies, lower corporate taxes and reduced regulation, which were spawned by the Trump administration, began to fade. The equity moves in April represented a 4th consecutive monthly gain in the S&P 500 Index in 2017 and six consecutive positive months overall. The rally experienced a shift in beneficiaries as the large-cap growth names have been the big winners in 2017. The S&P 500 Growth Index is +10% YTD while the S&P 500 Value Index is just under +2%. Small-cap stocks, which were a big winner after the Trump election, have cooled off advancing a modest 1.4% YTD. International equities continued to lead the charge with the MSCI ACWI ex-U.S. +2.1% in April and +10.2% YTD.