Weekly Market Commentary March 19, 2018

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

The S&P 500 slid 1.2% on increased concerns about political risk. The global MSCI ACWI dropped 0.6%, and the Bloomberg BarCap Aggregate Bond Index edged 0.2% higher. The S&P 500 is up 2.9% so far this year.

Key points for the week

  • Inflation was tame in February but remains a concern.
  • The Federal Reserve is expected to hike rates this week.
  • February tied as the most volatile month since 1996.
  • The number of big moves so far this year is roughly average.

Economic Analysis

The Federal Reserve is expected to use a fairly strong economy and modest inflation to support raising rates at its meeting this week. The Fed remains focused on unwinding its policy of unnaturally low rates implemented during the 2008 financial crisis.

The inflation data suggests that the plan is working. Prices are increasing at a healthy pace, while consumer inflation is rising at a moderate pace and is in line with the Fed’s goal. Last week, the Department of Labor announced inflation rose 0.2% in February and 2.2% over the last year. Both numbers matched expectations.

While this month’s numbers were good, we continue to watch inflation for signs of trouble. Wages and benefits are increasing very slowly for an economy near full employment.


Risk Analysis

However, January was a calm month, and unless there are more 1% moves, the quarter will be about average.

This year has felt more volatile than it has actually been. That is primarily because investors are comparing it to 2017. There were only two 1% moves during the entire first quarter of 2017, and there weren’t any in February. Last year may have been the calmest ever in the markets. But if investors expect every year to behave that way, they should expect to be disappointed.


 

Fun story of the week

Plane loses its $368 million cargo on takeoff

What is one way, besides investing, someone can make a fortune by sitting at home? Waiting for it to rain gold and diamonds, of course! A plane carrying a cargo load of gold, diamonds, and platinum worth $368 million was taking off from Yakutsk airport in Russia when part of its cargo section fell out. The majority of the valuable items hit the runway, but dozens of gold bars continued to drop during flight. Unfortunately, people who found gold in the area were expected to report it immediately or be prosecuted. So, I guess, that brings us back to investing.


Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

Market Commentary: S&P 500 Rallies 6.5%, Lifting Market Above Bear Level

The S&P 500 spent only a short time below the 20%-decline threshold, before jumping back above it last week. U.S. large-cap stocks rallied 6.5% based on optimism that inflationary pressures are starting to respond to higher interest rates.

Market Commentary: Fed Raises Rates by 0.75%, Market Moves Into Bear Territory

The S&P 500 dropped 5.7% last week and is now 22.3% off its peak. This decline pushed the index of large-cap U.S. stocks into a bear market, which is defined as a 20% or greater drop from its peak. Volatility remained elevated, and the S&P 500 has now moved by 1% or more 60 times …

Special Market Commentary: S&P 500 Slips Into a Bear Market. Now What?

Fueled by inflation readings that have remained stubbornly elevated, the stock market, measured as the S&P 500 Index, entered bear market territory at market close on June 13, 2022.  A bear market represents a decline in equity values by more than 20%.

Market Commentary: Inflation Pressures Remain High, S&P Dips Again

The S&P 500 dropped 5.1% last week as investors digested new inflation data released on Friday. May’s Consumer Price Index (CPI) report showed a reacceleration of inflation after a brief reprieve in April. Headline CPI increased 8.6%, which is the fastest pace since December 1981. The p …
1 2 3 67 68 69

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation