The Intelligent Investor Newsletter – May 10, 2016


A bi-weekly publication from Consultiva Internacional, Inc. (Registered Investment Adviser)

The U.S. labor market stumbled in April as the Bureau of Labor Statistics (BLS) reported that the economy produced 160,000 new jobs last month. While positive, this is well below the market’s expectations, which had seen an average of 232,000 jobs added per month over the past year. Total unemployment held at 5%, while job gains occurred in the services, health care, and financial services sectors. Hourly earnings increased by 2.5% over the past 12 months, which provides a positive sign to those concerned with stagnant wages. But overall, the jobs data raises concerns when taken in combination with the 0.5% GDP growth estimate for the first quarter of 2016, reported by the Bureau of Economic Analysis (BEA) on Thursday April 28th. Looking into the details, the BLS report indicates that employment in major industries, including construction, manufacturing, wholesale and retail trade, leisure and hospitality, among others, showed little or no change over the month. The BEA report points to a larger than expected decrease in nonresidential fixed investment, a downturn in federal government spending, an upturn in imports, among other factors that hurt or offset gains in other areas such as increased state and local government spending, and an acceleration in residential fixed investment.

The data on the U.S. economy shows several contradictions. While the private sector is adding jobs and consumers are becoming more confident, persistently low inflation has muted growth expectations, and as a whole the economy barely moved in the last quarter. This caused the Federal Reserve to hold off raising rates in their April meeting, maintaining the target range for the federal funds rate at ¼ to ½ percent, an accommodative stance that seeks to further improvements in the labor market and a return to 2% inflation. At Consultiva we find this trend in economic growth consistent with our expectations for 2016 and are reflected in our current asset allocation recommendations.

by Myrna Rivera, CIMA®
Founder & Chief Executive Officer




Consultiva is a Registered Investment Adviser. The registration with the Securities and Exchange Commission does not imply a certain level of skill or training. Consultiva has compiled the information for this report from sources Consultiva believes to be reliable. Sources include: investment manager(s); mutual fund(s); exchange traded fund(s); third party data vendors and other outside sources. Consultiva assumes no responsibility for the accuracy, reliability, completeness or timeliness of the information provided, or methodologies employed, by any information providers external to Consultiva. Conclusions reflect the judgement of Consultiva Investment Strategy Committee at this time and is subject to change without prior notice. There also can be no guarantee that using this information will lead to any particular result. Past performance results are not necessarily indicative of future performance. Diversification does not guarantee a profit or protection against loss. This document is for informational purposes only and is not intended to be an offer, solicitation, recommendation with respect to the purchase or sale of any financial investment/ security or a recommendation of the services supplied by any money management organization neither an investment advice or legal opinion. Investment advice can be provided only after the delivery of Consultiva’s Brochure and Brochure Supplement (ADV Part 2A and 2B) once a properly executed investment advisory agreement has been entered into by a client and Consultiva. This is not a solicitation to become a client of Consultiva. There are risks involved with investing including the possible loss of principal. All investments are subject to risk. Investors should make investment decisions based on their specific investment objectives, risk tolerance and financial circumstances. . Global and international investments may carry additional risks that are generally not associated with U.S. investments, such as currency fluctuations, political instability, economic conditions and varying accounting standards. Annual, cumulative, and annualized total returns are calculated assuming reinvestment of dividends and income plus capital appreciation.