Equities extended their losses into February, though rebounded sharply mid-month as investors responded to crude oil prices rallying and economic releases in the U.S. showing signs of continued economic expansion. This was unfortunately not enough to erase earlier losses. Large cap stocks returned -0.1% during the month and small caps broke even. International shares fared worse, with developed economy stocks returning -1.8% over concerns of the health of European banks and whether Great Britain would exit the EU. Investment grade bonds generated positive results as investors sought relative stability, despite interest rates continuing to decline.
-Gains in the U.S. job market continue to signal the strength of the domestic economy: unemployment rate in the U.S. has fallen to 4.9%, the lowest since Feb. '08; wage growth has increased at 2.5% YoY; job openings (JOLTS) at a near-record high (J.P. Morgan)

-Minutes from the Fed's last FOMC meeting indicated a reluctance to raise short-term interest rates in March given recent market volatility, relatively low inflation, and China's slowing economy

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Notes: 1) Sources: Bloomberg, J.P. Morgan Asset Management, Morningstar, Hedge Fund Research, Bureau of Labor Statistics, Bureau of Economic Analysis. 2) Data as of the date of this report unless otherwise noted. 3) U.S. GDP measures the percentage change during the referenced quarter as published by BEA. 4) Consumer Price Index for All Urban Consumers: U.S. City Average, All Items Less Food and Energy is based on 12-month percent change as published by BLS. Disclosures: This material is provided for informational purposes only and does not constitute an offer or solicitation by HFS, or its subsidiaries or affiliates, to invest in these indices or their constituent products. The data contained herein are from referenced sources which HFS believes to be reliable. This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. The views expressed are those of HFS. They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. Investing involves a high degree of risk, and all investors should carefully consider their investment objectives and the suitability of any investment. Past performance is not necessarily indicative of future results. All data is as of the date of this report unless otherwise noted.


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