Capital Market Outlook

IN THIS ISSUE

• Macro Strategy — Economywide Profits Data Inconsistent With Risk-Asset Euphoria: The narrow scope of S&P 500 profit increases in Q1, concentrated index leadership in a handful of mega-cap technology companies, and extreme outperformance of earnings per share relative to economywide profits call into question the “all is well" signal coming from the equity market.
  
• Market View — The Unwinding of U.S.-China Commercial Relations: The Evidence and Implications for Investors: Some cracks have emerged in the foundation of U.S.-China relations, and the wider these cracks become, the more downside/volatility for the global capital markets.
  
• Thought of the Week — Regime Change and the Bygone Era of Cheap Money: Shifting monetary gears is always fraught with risk and hence all eyes remain on the Federal Reserve.