News for the Week March 19 – March 23, 2018
General Markets / Economic
1. The FCC is considering a rule to further curb the US business of Chinese telecom firm Huawei
2. The Fed voted to raise its benchmark rate by a quarter point and signaled it could pick up the pace of increases to cool growth after next year
3. The EU unveiled sweeping legislative proposals that would raise taxes on big technology companies
4. G20 officials failed to reach a new agreement on trade amid a deepening split over US tariff plans
1. A handful of marketers suspended advertising on Facebook as the company hustled to quell anxiety about its platform
2. General Mills will be raising prices on some meals and snacks to reflect higher ingredient and shipping costs
1. Near Tampa Florida a 41-year old man woke up and immediately got into a fight with his wife. Apparently, it was their anniversary and he forgot. After going to work and thinking how to make it up to her, he returned home with a single rose. His plan was that they would spend a weekend at a nice hotel. When asked which hotel, he replied that he wasn’t sure as he hadn’t yet booked it. this lead to him receiving multiple lacerations across his chest and face and being hit multiple times. His wife was arrested for domestic abuse, and some other stuff.
2. A 30-year old man from Brooklyn NY won a $96,000 settlement from a car accident. To celebrate, he booked a room in a nearby motel and hired 3 women from the internet. After having their fun, the ladies then invited over their “friends” and subsequently the man was robbed of his $96k stash at gunpoint. According to the man, “I am haunted by this, I need my money badly.” Don’t we all!
3. Do you eat ketchup like a caveman, squirting it from the bottle or tapping the side? Now you can eat it like a refined royal, layering it upon your burger like cheese. That’s right, sliced ketchup is now a reality. It’s not cheap though, $10 for a pack of 8. It can be purchased on Kickstarter.
Commentary for Week of March 19 – March 23, 2018
by David Abuaf
Equities suffered their largest weekly decline in two years last week with the S&P 500 Index dropping 5.9%. The market focused mainly on risks associated with ramped up tariff rhetoric which led to fears that the US was on the verge of entering an all-out trade war. Investors were also concerned about prospects for more aggressive monetary policy tightening and signs of economic weakness. The technology and financial sectors led the way down, with mega-cap tech stocks hit particularly hard.
While fundamentals haven’t changed significantly, volatility has picked up recently and stocks have been trading in a broad range between their early February highs and the low established in last month’s correction. The good news is the US and global economies appear on sound footing, inflation pressures appear contained, the labor market remains strong, corporate earnings are solid, and interest rates have been rising only modestly.
While the US economy is leveling out, it doesn’t appear to be showing any signs of slowing. Relative weak retail sales have led economists to expect a slight slowdown in the first quarter growth. Other areas of the economy, such as the largo market and manufacturing remain strong. This indicates to us that growth should rebound in the second quarter. within the more macro environment, we believe that the US can withstand additional interest rate increases. Although the Fed might increase rates slightly faster than earlier anticipated, interest rates remain historically low and remain well below a neutral level given economic growth and inflation trends. We do not believe rates will rise sharply or dramatically enough to derail the equity bull market!
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