April was another good month for markets around the world. Although worry over the French election weighed on performance, markets rallied in the last week of the month as a centrist candidate secured a spot in the final round. 

Although demand for housing remains strong, last week’s economic data was generally downbeat, suggesting growth is moderating and that chances for a near-term acceleration may be passing. Although general levels of activity remain expansionary, it was a disappointing week overall—and one that starts to call into question future growth.

As April draws to a close, the old adage “Sell in May and go away” may be on some investors’ minds. The saying refers to the tendency of markets to underperform during the period from May to October (as compared with better performance from November through April), advising us to sell and wait for brighter days ahead.

The big news today is the White House's tax plan, which proposes to cut taxes across the board, relieve millions of people from the burden of paying income taxes, and make filing much simpler and easier—all while keeping the budget in balance (or at least not making the situation worse).

Yesterday, readers wrote in with a couple of very good questions about risk.

With Emmanuel Macron through to the second round, the French election is (largely) off the table as a systemic risk. Polls show Macron well ahead of Marine Le Pen of the National Front, and the likelihood is that the next French president will be a pro-European centrist rather than an anti-European populist.

Last week’s economic reports showed some moderation of growth, with substantial divergence between the headline figures and the underlying details in several cases. That said, the general levels of activity remain expansionary. Overall, it was a pretty positive week, but not one that significantly changes expectations going forward.

A friend of mine, a construction manager, once taught me a valuable lesson about evaluating the quality of a building: examine the edges, the corners, and where one material connects to another. Handling the transitions well requires skill, expertise, and time—and not all builders are able to pull it off.

If the U.S. economy isn’t bleeding—at least not a lot, yet—then what is? I closed yesterday’s post with the idea that Europe is the area we should be watching, and the place to start is in France.

One of the many blessings of having a son is that my life is rarely calm. Drama is a regular guest at the McMillan household whenever anything, however minor, happens. I do not always greet Drama with what he would consider an appropriate response, though. In fact, he usually gets a look and then a question: “Is it bleeding?” If, rarely, the answer is yes, I then ask, “Is it bleeding a lot?” If not, we discuss how the adage “When in danger or in doubt, run in circles, scream and shout” is always the wrong response.