Tuesday we closed the books on the month of April and even as signs of a slowing global economy rolled in, the so far better-than-expected tone of the March-quarter earnings season lifted all the major domestic stock market indices, furthering their year-to-date gains.
For the month, the "laggard" was the Dow Jones Industrial Average, which at +2.6% trailed the S&P 500 (+3.9%) and the Nasdaq Composite Index (+4.7%) due to its large exposure to Boeing (BA) , 3M (MMM) and Intel (INTC) .
As impressive as those April gains were, the Real Money Post-Industrial Average (RMPIA), which climbed 6.6% in April, dusted all three of those indices. Entering May, RMPIA is up more than 20% year to date, well ahead of the S&P 500 and the DJIA.
RMPIA is a modified market-cap weighted portfolio consisting of 30 of the most important stocks in the market today.
What's been driving RMPIA's impressive gains of late?
Right off the bat we see RMPIA's advances were rather diverse. Nearly half of its constituents clobbered both the S&P 500 and Dow for the month. Contributing to those market-beating gains was Qualcomm (QCOM) , which soared 51% in April following its settlement with Apple (AAPL) . Shrugging off concerns over monetization, Facebook (FB) climbed 15% for the month, with BlackRock (BLK) not too far behind and followed by Adobe Systems (ADBE) .
Among the 16 RMPIA constituents that were in line with or trailed the major market indices during April, RMPIA's charge was restrained by double-digit declines from Walgreens Boots Alliance (WBA) and Regeneron Pharmaceuticals (REGN) , with Amgen (AMGN) falling more than 5% as well.
Examining RMPIA's year-to-date move, we see a similar pattern, with 19 constituents outperforming the 14%-18% gain by the Dow and the S&P 500. These include big gains from Qualcomm, Celgene Corp. (CELG) , and Facebook, each in excess of 47%. MasterCard (MA) , Netflix (NFLX) and PayPal (PYPL) were next with year-to-date advances between 34%-35%, while a smattering of names were up more 25%-30%, including Amazon (AMZN) , Apple, Adobe, and Comcast (CMCSA) .
As we saw with the April performance, RMPIA also had a few YTD underperformers on a relative and absolute basis -- the aforementioned Walgreens and Regeneron as well as Kraft Heinz (KHC) , Biogen (BIIB) and CVS Health (CVS) .
By the end of this week, more than 1,050 companies will have reported earnings this season, including around 65% of the S&P 500. Generally, results are looking better than expected so far, with positive aggregate earnings ahead of expectations that called for a year-over-year drop for the quarter. Indeed, RMPIA has enjoyed a number of positive reports and other developments.
Nevertheless, we have to acknowledge there are pockets of weakness out there given results and revised guidance from 3M, Tesla, Inc. TSLA, Intel, Sherwin-Williams (SHW) GATX (GATX) , Gorman-Rupp (GRC) , and others. The next half of S&P 500 company reports could be confirming of what we've seen thus far or reveal cracks that bear watching. The same can be said with the coming economic data that will paint a picture of how strong the global economy is as we move deeper into the June quarter and how well positioned RMPIA is for what lies ahead.
