Telemus Weekly Market Review

March 19 – March 23

Stocks dropped sharply last week, giving up ground for the second week in a row, as investors took in the latest policy directive from new Fed Chair Powell, a new round of tariffs from the White House, and cries for greater data regulation following a privacy scandal involving Facebook . The S&P 500 fell 5.95%, the Nasdaq Composite lost 6.54%, and the Dow Jones Industrial Average finished down 5.67%, which marks their worst week since the big sell off that took place in early February.

Facebook kicked off the week by declining nearly 7.0% on Monday following reports that a research firm, Cambridge Analytica, mined the data of 50 million Facebook users without their consent, and then used that data to deliver targeted pro-Trump ads during the 2016 presidential campaign. The incident has given new life to proponents of data regulation and, in turn, been a headwind for shares of social media companies, which would likely see a decline in profits due to said regulations.

Investors turned their attention to monetary policy on Wednesday when the Federal Reserve increased the fed funds target range by 25 basis points to 1.50%-1.75%, as widely expected, and left its forecast for a total of three rate hikes this year intact. The latter was a relief for investors, who thought that the central bank might raise its 2018 forecast to include a fourth rate increase. However, the Fed does anticipate that it will need to be somewhat more aggressive in tightening policy over the next two years.

Trade war fears came back into the mix on Thursday after President Trump signed a presidential memorandum that allows for tariffs on up to $60 billion worth of Chinese goods. The tariffs, which the president says are punishment for China’s alleged intellectual property theft against U.S. tech companies, prompted a retaliation response from China, which said it plans to levy duties of up to $3 billion on U.S. imports, a drop in the bucket considering the overall value of imported goods to China.

11 of 11 S&P sectors finished the week in negative territory, with the top-weighted technology, financials, and health care groups leading the retreat. The energy sector was the top performer, benefiting from an increase in the price of crude oil; West Texas Intermediate crude futures jumped 5.7% to $65.87 per barrel on Friday their best level since late January. The crude rally was helped by the EIA’s weekly inventory report, which showed that U.S. crude stockpiles declined for the first time in three weeks.

A breakdown of technical support played into this week’s selling after the S&P 500 dropped comfortably below its 50-day simple moving average of 2743 at Monday’s opening bell. The benchmark index finished Friday just a tick above its 200-day simple moving average of 2585.

After rising early in the week the 10 year U.S. Treasury note closed Friday at 2.817%, a small drop from last week’s close, as investors on Thursday and Friday sought a safe haven from the sell-off in the stock market.

March 26 – March 30 Economic Calendar

  • Monday
  • Chicago Fed National Activity Index
    8:30 AM ET
  • Dallas Fed Mfg Survey
    10:30 AM ET
  • William Dudley Speaks
    12:30 PM ET
  • Loretta Mester Speaks
    4:30 PM ET
  • Raphael Bostic Speaks
    11:00 AM ET
  • Wholesale Inventories [Advance]
    8:30 AM ET
  • Pending Home Sales Index
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Raphael Bostic Speaks
    11:30 AM ET
  • Farm Prices
    3:00 PM ET
  • Tuesday
  • Redbook
    8:55 AM ET
  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET

  • Consumer Confidence
    10:00 AM ET
  • Richmond Fed Manufacturing Index
    10:00 AM ET

  • Raphael Bostic Speaks
    11:00 AM ET
  • Wholesale Inventories [Advance]
    8:30 AM ET
  • Pending Home Sales Index
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Raphael Bostic Speaks
    11:30 AM ET
  • Farm Prices
    3:00 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • GDP
    8:30 AM ET
  • International Trade in Goods
    8:30 AM ET
  • Corporate Profits
    8:30 AM ET
  • Retail Inventories [Advance]
    8:30 AM ET
  • Wholesale Inventories [Advance]
    8:30 AM ET
  • Pending Home Sales Index
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Raphael Bostic Speaks
    11:30 AM ET
  • Farm Prices
    3:00 PM ET
  • Thursday
  • Jobless Claims
    8:30 AM ET
  • Personal Income and Outlays
    8:30 AM ET

  • Chicago PMI
    9:45 AM ET

  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • Consumer Sentiment
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • Patrick Harker Speaks
    1:00 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Friday
  • Market Closed -Good Friday
  • Dallas Fed Mfg Survey
    10:30 AM ET
  • William Dudley Speaks
    12:30 PM ET
  • Loretta Mester Speaks
    4:30 PM ET
  • Raphael Bostic Speaks
    11:00 AM ET
  • Wholesale Inventories [Advance]
    8:30 AM ET
  • Pending Home Sales Index
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Raphael Bostic Speaks
    11:30 AM ET
  • Farm Prices
    3:00 PM ET

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This market commentary is a matter of opinion and is for informational purposes only.  It is not intended as investment advice and does not address or account for individual investor circumstances.  Investment decisions should always be made based on the client’s specific financial needs, goals and objectives, time horizon and risk tolerance.  The statements contained herein are based solely upon the opinions of Telemus Capital, LLC.  All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.