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 iShares US Insurance ETF (IAK) & iShares MSCI EAFE ETF (EFA)

Equity markets have struggled in the last week particularly in the United States, despite a number of very strong earnings reports from companies across the spectrum including Technology, Industrials, and Consumer Products. While some stocks have responded positively to good news, particularly in the last 24 hours, a number of stocks have run into investor choosing to take profits against results.

Another round of concern about the health of the banking sector and financial system hasn’t helped confidence, although it really hasn’t sparked a resurgence of fear either. Gold continues to trade on either side of the $2,000/oz round number, and the VIX has crept up slightly but remains below 20.00. As we move through earnings season, investors may recall that January to April is one of the strongest seasons of the year for stocks and May-June has historically been one of the weakest times of the year for equities. This weekend the calendar turns to May, bringing the usual flurry of economic reports which include Manufacturing and Service PMI reports from around the world plus employment numbers for the US and Canada. The end of this week features US Q1 GDP today and US Core PCE inflation tomorrow which could help to set the stage for next Wednesday’s Fed decision and statement.

The US central bank is widely expected to raise the Fed Funds rate by another 0.25% to 5.25% which would take it above the Consumer Price Index growth for the first time since before the pandemic. Investors may look to the statement and press conference for hints as to whether the Fed is done or if another rate hike in June remains on the table.

One of the big questions surrounding recent economic news and earnings reports has been how much of an impact has monetary tightening over the last year had on the economy and if we are heading for a soft landing or a recession. This week we continue to move through the heart of earnings season with results on the way from a broad range of sectors including Insurance, Energy, Technology, Mining, Hotels and others. Headliners include and Intel tonight, Exxon Mobil and Chevron tomorrow, Ford, Dupont and Starbucks Tuesday, MetLife and Barrick Gold on Wednesday, and Apple next Thursday.

iShares US Insurance ETF (IAK)

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