April 2026 QiM Fact(or) Sheet
S&P 500 Valuation
Mind the optimism: High CAPEX has widened gap between Free Cash Flow and Earnings Valuation.
Source: SEI QiM, using data from FactSet.
Summary
- Risk appetite rebounded as markets priced a de-escalation in the US–Iran conflict alongside a strong earnings season.
- With 62% of the S&P 500 reported, 84% beat EPS expectations (above the 10-year average). Consensus 2026 earnings growth was revised up from 13% to 21%.
- Capital expenditure continued to grow at a record pace, increasing execution risk if returns on investment do not materialize.
- U.S. growth remained resilient, with strong activity and the oil shock sustaining elevated inflation, reinforcing a higher-for-longer policy backdrop.
- Global growth moderated as higher energy prices weighed on activity.
- Sectors – Cyclical and growth sectors outperformed (Technology, Communication Services, Industrials, Consumer Discretionary), while defensives lagged (Health Care, Staples, Utilities). Energy underperformed as oil prices eased.
- Countries – Taiwan and South Korea outperformed on semiconductor strength (TSMC, Samsung, SK Hynix). The UK and Europe lagged given lower technology exposure and a greater weighting to defensive and commodity sectors.
- Market breadth – The rebound was narrow, concentrated in AI-linked mega-cap technology and semiconductors, led by Alphabet, Broadcom, and Amazon.
- Factor leadership – Momentum outperformed, driven by AI-linked mega-cap leadership, while Low Volatility lagged in the risk-on environment.
Factor families
Exhibit 1: April 2026 Investable factor proxies versus respective capitalization weighted indexes.
Source: SEI, based on data from MSCI, Axioma and FactSet. Data as of April 30, 2026. Returns quoted in USD. Metrics are composites of underlying ratios that SEI has determined to be appropriate measures of each factor. Data refers to past performance of top-tercile factor-proxy portfolios vs. the capitalisation-weighted benchmark and rebalanced quarterly. Returns are for illustrative purposes only and do not represent actual fund performance. Excess returns measured against (in descending order): MSCI ACWI Large Cap, MSCI USA Large Cap, MSCI EAFE Large Cap, MSCI EM Large Cap, MSCI USA Small Cap, MSCI EAFE Small Cap Indexes. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance is no guarantee of future results.
Outlook
Emphasizing Value family of factors based on:
- Wide valuation spread.
- Higher long-term interest rates (vs long-term average).
Over the quarter we have:
- Trimmed overweight to value.
- Increased Momentum exposure.
Exhibit 2: April 2026 Active factor family positioning.
Source: SEI, the axis displays z-score exposure versus benchmark, as of April 30, 2026. Long term average exposure from January 31, 2003, to current. Benchmark: MSCI World Index.
Z-scores tell us how exposed a portfolio is to a factor, compared to a benchmark, based on what's normal for that factor. It is a common "currency" of portfolio exposures, making unrelated raw metrics like P/E or ROE comparable to each other.
A value of zero means the portfolio is neutral to the benchmark for that factor.
Higher values mean the portfolio has more exposure to that factor than the benchmark.
Economic indicators
US.: Growth holds firm as inflation pressure persist
Jobs: Labour market remains firm
- Nonfarm Payrolls: at 178K, above expectations and prior month.
- Unemployment Rate: 4.3%, below expectations and prior month.
- Initial Jobless Claims: 207.5K monthly average, broadly in line with previous monthly average of 208K.K.
Inflation: Core pressure persists
- Core CPI: 2.6% (YoY), below expectations and above prior month.
- Core PCE Deflator: 3.2% (YoY), in line with expectations but above prior month.
- Hourly Earnings (preliminary): 3.5% (YoY), below expectations and prior month.
Consumer: Spending rebounds, sentiment weakens
- Retail Sales: 1.7% (MoM, SA), above expectations and prior month.
- Michigan Sentiment (preliminary): 47.6, below expectations and prior month.
- Consumer Confidence: 92.8, marginally above expectations and in line with prior month.
Manufacturing and Services: Expansion strengthens
- Markit PMI Manufacturing SA (preliminary): 54.0, above expectations and prior month.
- Markit PMI Services, SA (preliminary): 51.3, above expectations and prior month.
- Empire State Index, SA: 11.0, above expectations and prior month.
The rest of the world
China: Growth steadies, but remains fragile
- Exports: 2.5% (YoY), below expectations and prior month.
- PMI manufacturing: 52.2, above expectations and prior month.
- PMI services: 52.1, below expectations and prior month.
- CPI: 1.1% (YoY), in line with expectations and below prior month.
Japan: Activity strengthens, inflation firms
- CPI Core National: 1.8% (YoY) above prior month.
- Manufacturing PMI (preliminary): 54.9 above prior month.
- Services PMI: 53.4 above prior month.
Germany: Manufacturing holding up, services contract
- CPI EU Harmonized: 2.8% (YoY), in line with expectations and prior month.
- Markit Manufacturing PMI (preliminary): 51.2, in line with expectations and above prior month.
- Markit Services PMI (preliminary): 46.9, below expectations and prior month.
U.K.: Inflation rises, activity strengthens
- CPI EU Harmonized: 3.3% (YoY), in line with expectations and above prior month.
- Markit Manufacturing PMI (preliminary): 55.6, above expectations and prior month.
- Markit Services PM (preliminary)I: 52.0, above expectations and above prior month.
Source: FactSet.
CAPEX growth in S&P 500
Source: SEI QiM, using data from Factset. Past performance is not a reliable indicator of future results.
Sector and country returns
Exhibit 3: MSCI All Country World Index
Source: SEI, MSCI. As of April 30, 2026. Past performance is not a reliable indicator of future results.
Glossary and index definitions
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