Market summary. The U.S. stock market continues its rally, with greater prospects for a friendly Federal Reserve, and relief over the settlement of possible trade troubles with Mexico
– at least for now. The amelioration of these overhangs and pessimism causes us to continue to be bullish on U.S. stocks, in preference to most other global stock markets. Tech stocks
have rallied strongly in the U.S.; while we think that there are likely regulatory concerns for big tech moving forward, we view the market’s reaction as overdone. We are only modestly bullish on emerging markets; for the current rally, we generally prefer the U.S. One long term
exception is India, where Narendra Modi’s recent re-election victory presents the prospect of substantial improvements that will ultimately allow investors in India to reap more of the benefits of that country’s first-in-class economic growth. Investor sentiment in China has not collapsed, and we believe domestic Chinese shares have potential in the event of a trade deal
announcement between China and the United States. Still, for newly deployed funds, we would favor the U.S. over China. Gold continues to show bullish technical patterns. Chinese central bank gold buying was stronger in the first quarter of 2019 than it has been for six years, and we
continue to note that many central banks are buying gold. Central banks worldwide are accumulating gold, and they are also either easing monetary policy or communicating their willingness to ease in response to economic conditions; all of this helps support the price of gold.
