Statistic of the Week:
During the month of March, the US created 98,000 new jobs, half of the amount analysts had expected. This figure was paired with the unemployment rate dipping to 4.5%. Winter weather and weak retail were named as reasons for the miss.
In a vote that is viewed skeptically by international monitors, 51.3% of Turkish voters elected to change the constitution. Sweeping powers will be granted to the winner of the 2019 presidential election, effectively ending the current parliamentary system. President Ergodan is expected to be reelected in 2019 and assume full control of the government.
Market Moving Events:
Monday: Empire State Manufacturing, Housing Market Index Tuesday: Housing Starts, Industrial Production Wednesday: Petroleum Status Report, Beige Book Thursday: Jobless Claims, Philly Fed, Leading Indicators Friday: Existing Home Sales
Broad US equity indices fell for the second week in row, extending the mini correction we have been experiencing since markets hit record highs on March 1st.1 The S&P 500 fell 1.1% on the week, while the DJIA contracted 1.0%.2 The NASDAQ was the worst domestic performer, declining 1.2%.3 International stocks held up relatively well, with the MSCI EAFE falling only 0.1%.4 Small and medium sized companies, which had been outperforming since the election, have been under the most pressure from the perceived lack of accomplishments by the Trump administration. Investors had been hoping for a tax reform package that would send profits to the bottom line, and easing of regulatory burdens. Until either comes to fruition, these asset classes may stay under pressure for some time The real story last week, which is likely to continue into the weeks ahead, is how geopolitical headlines have been shifting the focus of investors from “risk on” to “risk off.” Treasury bonds rallied last week, as the yield fell below 2.25%.5 Severe rhetoric out of North Korea, along with the parading of missile launchers through the streets (they had a failed missile test on Sunday), have investors on edge. Coupled with the first round of French elections on April 23rd, which may in fact determine the future of the euro zone, it is understandable why some investors are taking a more cautious stance. The spreads between French and German sovereign bonds has been widening as a result of a probable Macron / La Pen runoff.6 One thing is for sure – it won’t be boring! - Dan McElwee, CFP®
Chart of the Week: