Adding Global Diversification on Growing Trade Optimism
The LPL Strategic & Tactical Asset Allocation Committee (STAAC) determines the firm’s investment outlook and asset allocation that helps define LPL Research’s investment models and overall strategic and tactical investment thinking and guidance. The committee is chaired by the chief investment officer and includes investment specialists from multiple
investment disciplines and areas of focus. The STAAC meets weekly to closely monitor all global economic and capital markets conditions to ensure that all the latest information is being digested and incorporated into its investment thought.
Key changes from STAAC:
- Downgraded large/mid growth to modest overweight
- Upgraded emerging market equities to neutral
- Downgraded stance on U.S. equities to neutral
- Revised 2025 GDP forecast down to 1.3%
- Upgraded view on agricultural commodities to neutral
Investment Takeaways
Major averages ended a volatile April mostly lower after paring back a deep correction in the wake of the April 2 reciprocal tariff announcement. Steeper than expected tariff rates and countermeasures from abroad sent the S&P 500 tumbling over 12% intra-month as economic growth worries rippled across Wall Street. However, stocks rebounded after President Donald Trump announced a 90-day pause on reciprocal levies. Sentiment improved on optimistic remarks about trade deals from U.S. officials, outside of short-lived Federal Reserve (Fed) independence concerns. Following the strong late-month rally, the S&P 500 ended less than 1% below the month-to-date flatline. Elsewhere, first quarter earnings reports got off to a solid start, although tariff-related uncertainty dominated earnings calls.
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IMPORTANT DISCLOSURES
Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. Precious metal investing involves greater fluctuation and potential for losses.
Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability. Earnings per share is generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio.
Gross Domestic Product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.
All index data from FactSet.
The Strategic and Tactical Asset Allocation Committee (STAAC) is a division of LPL Research.
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