News for the Week April 9 – April 13, 2018
General Markets / Economic
1. A new way to trade bulk agricultural futures is raising concerns that crop and livestock markets are growing less transparent
2. Banks are finding a backdoor path to subprime customers as loans to nonbank firms hit record levels
3. The Fed proposed retooling capital rules and annual stress tests for the largest financial firms
4. Producer prices rose more than expected in March, the latest sign inflation pressures may be building
5. Oil prices surged to their highest level since 2014 on Mideast tensions
6. Venture capital investment from Asia is soaring, possibly heralding a shift in power over technological innovation away from the US
1. The DoJ allowed Bayer’s megadeal to acquire Monsanto after it promised to sell off additional assets
2. Novartis agreed to buy gene-therapy firm AveXis for $8.7B
3. PayPal has been offering some customers the option to add basic banking features to their digital wallets
4. Zillow is getting into the business of buying and flipping homes
5. Apple said it achieved its goal of powering its facilities worldwide exclusively by renewable energy
Commentary for Week of April 9 – April 13, 2018, by David Abuaf
Another week, another reason to wonder: is the correction really over? The market found its footing this week as the S&P 500 gained 2%.
It was the second time in the past four weeks that the S&P 500 followed a down week with a gain, and it did so despite concerns that Trump would launch a missile strike against Syrian targets, and after a lackluster response to better than expected earnings from a few big banks!
Not only did the market weather the news to finish higher on the week, the VIX, a measure of option market volatility, dropped to its lowest level in nearly a month! JJ Kinahan of TD Ameritrade says “volatility is coming off pretty quickly.” Brian Belski of BMO Capital Markets, notes the recent volatility, when averaged on a monthly basis, is close to its average since 1998. “While we do believe that this sort of higher volatility is here to stay, we don’t see it climbing to the extreme levels that typically evolve into more problematic market periods,” he explains.
All opinions presented are those of David Abuaf, and not of Raymond James or Forman Investment Services. All opinions are as of this date and are subject to change without notice.
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