Performance and positioning update:
- Performance across the risk profiles within the Target Allocation ETF model portfolios suite was positive on a total return basis during the month, with the stock-heavy profiles outperforming their benchmarks the most.
- US stocks reached new record highs due to strong corporate earnings, easing inflation, and a resilient economy. This economic strength raised hopes for a 'soft landing' despite the Fed reconsidering its previous dovish stance.
- Oil prices increased, influenced by geopolitical tensions and OPEC's supply cuts and gold prices hit record highs, possibly indicating growing investor anxiety.
- Japan's stock market surpassed its late-1980s peak, while emerging market stocks underperformed, with China's economic outlook remaining uncertain.
A `surprise' pop in inflation is impacting markets
CPI auto-related subcomponents
Source: Bloomberg, BLS, Fundstrat. Chart shows year-overyear percentage change to the Consumer Price Index autorelated subcomponents (New Vehicles, Motor Vehicle Insurance, Motor Vehicles Maintenance & Repairs, Motor Vehicle Parts & Accessories), as of 4/10/2024
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Michael Gates
Michael Gates, CFA, Managing Director, is the head of Model Portfolio Solutions in the Americas within BlackRock's Multi-Asset Strategies & Solutions group.
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