In its April-May meeting, the Federal Open Market Committee (FOMC) kept its target range for the federal funds rate unchanged at 2.25-2.50%. The committee also reaffirmed its tone to be patient about future interest rate decisions. US GDP expanded to 3.2% in 1Q19 from 2.2% in 4Q18 due to robust consumer spending, rise in private investment and exports.
The US labor market remained healthy, with the unemployment rate falling to 3.6%. The US-China trade talks seem to be on the verge of conclusion as US trade representative Robert Lighthizer travels to China to resume talks to attempt to end the year-long trade dispute.
The global equity markets continued its upward momentum in April driven by positive economic data from the US and China. Equity markets edged higher on hopes of the conclusion of US-China trade deal, better-than-expected earnings, and improved economic data.
In the fixed income markets, the US 10-year benchmark yields rose 10 bps to 2.50% in April, driven by positive economic data and strong earnings lifting risk appetite. The Dow Jones Sukuk Index rose marginally (up 0.3%) in April, after rising 1.2% in the prior month.
Gold prices traded in a narrow range (down 0.7%) in April after falling 1.6% in March. During the month, the metal edged lower on dollar strengthening and rebound in global equities made safe-haven assets less attractive. Positive trade talks between the US and China anticipated a quick resolution to the tariff war, which boosted appetite for riskier assets.
Source: Reuters Eikon as of April 30, 2019. Please note that performance shown are or Wahed model portfolios. Actual client performance will depend on the timing of funding and intra-quarter drift from targets. Past performance is not indicative of future results.