During April, the equity markets performed positively, with the Dow Jones, the Mexican Stock Exchange and the S&P 500 being the main winners; these indices posted gains of 2.48%, 2.26% and 1.46%, respectively. On the other hand, the performance of companies in the technology sector was marginally positive, increasing only 0.04% in the month, although we must emphasize that it is the sector with the highest accumulated performance for the year (16.82%).

Last week, the Federal Reserve decided to increase its benchmark rate by 25bp to bring it to a range of 5.00-5.25%. The market expects this to be the last increase to the federal funds rate due to recent data that has shown a loss of economic momentum, with job openings declining and tighter credit conditions caused by the regional banking crisis. And although the employment report again exceeded expectations, wage growth is moderating and trending downward.

Leaving monetary policy aside, U.S. GDP increased 1.1% at an annualized rate during the first quarter of the year, a figure that was released in the last week of April; and although growth was lower than expected, it should be noted that the downward bias was caused by the volatile fluctuations in inventories and the decline in the construction sector, and not by consumption, which presented a solid growth of 3.7%, which represents around 70% of the U.S. economy. Likewise, corporate reports for the first quarter exceeded analysts' low expectations, showing a 2.2% decrease in profits versus the 6.7% forecast.

Finally, while both economic and corporate data still show resilience, the Investment Group's committee agreed to reduce ~10% of its equity market exposure by exiting the Value and Small Cap sectors, in order to position itself more defensively for the slight recession we expect over the next 6-9 months.