News for the Week March 26 – March 29, 2018
General Markets / Economic
1. Demand for low skilled worker visas for the summer season is again far outstripping supply
2. Consumer spending in the U.S. rose at a muted pace in February for the second month in a row
3. Home prices continued to grow at a rapid pace in January, as the new tax law and rising mortgage rates made little dent in demand
4. Draghi is coming under pressure from a growing fraction of ECB officials to start raising interest rates in the middle of 2019
1. Walmart’s potential acquisition of Humana would push the retailer far beyond its big box roots, enabling it to diversify while thrusting it into a complex and evolving health care sector
2. The NYSE is in talks to buy the Chicago Stock Exchange after the recent collapse of a two-year acquisition effort by a Chinese led group
3. Microsoft is downgrading the role of Windows as it reorganizes around its cloud computing operations and Office productivity business
4. Tesla is recalling about 123,000 Model S sedans after discovering that corrosion of certain bolts could lead to a power-steering failure
1. Be glad you don’t live in California. A judge there ruled that coffee in California must carry a cancer warning!
2. Karaoke places are finding a new source of revenue – tone-deaf singers. Specifically, those that are self-conscious about how bad they sound they can now rent out single stalls where they can sing to their heart’s desire and not worry about how bad they truly sound. Simon Cowell would be proud!
3. In Staten Island a woman – Lorie – had a falling out with her best friend. Her ex-boyfriend then found a new best friend and that made Lorie jealous. When all three women met the following week at a PTA meeting, Lorie went to new best friend and started choking her out. She was arrested. Only 24 hours later, after getting out of jail, Lorie went to her ex-best friend’s house and threw a brick through the window. She then went inside with a gun – though it was just a starter pistol. When the cops came she pointed it at them, and cops ended up shooting her (in the shoulder). Something tells me she’ll be finding a new “best friend” in jail!
Commentary for Week of March 26 – March 29, 2018
by David Abuaf
Stocks finished up about 2% (S&P 500) in a holiday shortened week of choppy action that ended Thursday. A late rebound of technology shares put the market in the green for the week. Trading ended early in observance of Good Friday.
Thursday also marked the end of the first quarter of activity, and perhaps the best investors can say about it is that it’s over. The quarterly broad-market drop of about 1.2% isn’t particularly bad by historical lights, but it snapped a nine-quarter winning streak. More importantly, investor sentiment snapped too.
“We are in a structurally different environment” since the market’s high, says Michael O’Rourke, chief market strategist at JonesTrading. The volatility seen since January’s end will likely continue, and market leaderships has narrowed, not a particularly good sign, he says – adding that the tech backlash isn’t fading.
An unusual backdrop to the weak quarter is that volatility and poor trading action has occurred even as the growth in corporate profit estimates has accelerated. For that reason – and the prospect of overall good economic growth – Kate Warne, an investment strategist at Edward Jones, remains bullish.
While the second quarter might be down, and tech worries are a valid concern, the broad underlying market fundamentals may be improving. April does bring spring and some hope. It’s typically a bullish month. According to Bespoke Investment Group, over the past 100 years April has been the third strongest month for the Dow, with an average 1.3% rise and positive returns about two-thirds of the time!
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