Your Weekly Summary – March 19, 2018

US Stock Market Indexes

 

For the 2nd week in a row, all major US Market Stock Indexes finished in the red. The Russell 2000 Small Cap Index lost the least, dropping .69% and the Dow Jones Industrial Average, the S&P 500 and the NASDAQ Composite all losing over 1% respectively.

 

Who was Fired in Washington Last Week?

 

 

This seems to be a developing theme that I can only hope stops.   As the markets tend to “climb a wall of worry”, if this continues, market participants may lose confidence, resulting in more significant pullbacks in the markets.

 

Last week witnessed Secretary of State Rex Tillerson replaced with CIA Director Mike Pompeo and John Kudlow accept the position of Chief Economic Advisor. I’ve always enjoyed listening to John Kudlow on CNBC and have respected his thorough process in developing his positions. I may not have always agreed, however I believe he is extremely well qualified. I just hope that after Kudlow’s time is complete in Washington, I still have the same level of respect!

 

Interestingly, President Trump also terminated his Personal Assistant, John McEntee.

 

Tame Economic Data

 

 

The Producer Price Index (PPI) rose .2% in February, a non-event. Retail Sales dropped slightly, however without automobiles included, increased .2%.

 

The 10 Year US Interest rate fell modestly from 2.87% to 2.85%, another non-event for the week.

Paul’s Take – Going Forward

 

This Federal Open Market Committee (FOMC) is widely expected to raise the short-term rate they control .25%. I certainly agree this will be the conclusion when we hear from new Chairman Jerome Powell this Wednesday. The question on investor’s minds is will the “Fed” raise rates 3 or 4 times in 2018? Chairman Powell’s words will be met with much scrutiny that can be market moving.

 

In addition to the Fed, we’ll receive reports on US Manufacturing on Wednesday and Durable Goods on Friday.

 

I’ll be looking forward to Mid-April when we start hearing Corporate Quarterly Earnings Reports and their forecast for upcoming quarters. Between now and then, what happens in Washington may continue to influence the markets in either direction.