The Pension Boards - PBUCC - Market Update from CIO Lan Cai, CFA

Market Update from CIO Lan Cai, CFA – April 2025

April experienced big swings across markets, as the U.S. administration announced tariffs on imports from 60 countries and subsequently paused on many. The global equity index (MSCI ACWI IMI) was slightly positive at +0.93% in April and is down -0.40% YTD. The S&P 500, which tracks large cap U.S. stocks, decreased by -0.68% in April and is down -4.92% YTD. The Russell 2000 Index, which tracks domestic small cap stocks decreased by -2.31% in April and is down -11.57% YTD. The International developed equity index (MSCI EAFE) increased by +4.58% in April and is up +11.76% YTD. The emerging markets index (MSCI EM) increased by +1.31% in April and is up +4.28% YTD.
In April, bond yields varied across maturities; the 30-year U.S. Treasury bond yield increased by 7 bps to 4.66%, the 10-year yield decreased by 6 bps to 4.17%, and the 2-year yield decreased by 29 bps to 3.60%.
The Barclays U.S. Aggregate Index, which is a measure of U.S. Bond prices, increased by +0.39% in April and is up +3.18% YTD.

U.S. gross domestic product (GDP) in the first quarter of 2025 decreased by -0.3% due to larger than usual imports, according to the “Adv” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2024 GDP increased by 2.4%.
The April Services PMI (formerly Non-Manufacturing Purchasing Managers Index) decreased to 51.40% from 54.40% in March. This represents expansion and is below market expectations of 54.00%. The April Manufacturing PMI decreased to 48.70% from 49.00% in March.
April non-farm employment increased by 177,000 jobs, and the unemployment rate was unchanged at 4.2%, as reported by the Bureau of Labor Statistics on May 2nd, 2025. In April employment increased in health care, transportation and warehousing, financial activities, and social assistance. Average Hourly Earnings (wages) increased by 3.8% year-over-year in April.

The Equity Fund increased by +0.64% in April and is down -1.32% YTD. The Bond Fund increased by +0.46% in April and is up +2.83% YTD. The Stable Value Fund was up +0.18% for April and is up +0.78% YTD. The Northern Trust Global Sustainability Index Fund (GSIF) increased by +1.13% in April and is down -2.71% YTD.
The Balanced Fund increased by +0.97% in April and is down -0.07% YTD. The Target Annuitization Date TAD 2025; TAD 2030; TAD 2035; TAD 2040 TAD 2045 and TAD 2050 returns were +0.33%, +0.49%, +0.56%, +0.57%, +0.59% and +0.60% respectively for April and +0.90%, +0.97%, +0.63%, +0.25%, -0.07% and -0.39% YTD.