What we think

Newsletter: In the Markets – Week-Ending April 28^th, 2017

Crystal Brook Advisors

We Make Financial Planning Crystal Clear™

United States:  Supported by tight supply and steady gains in home sales, U.S. home prices continue to edge higher. The S&P CoreLogic Case- Shiller National Home Price Index is up 5.8 percent over the past 12 months and the 20-City and 10-City indices are up 5.9 percent and 5.2 percent, respectively. (1)  Among the 20 cities, Seattle continues to lead price gains, reporting a 12.2 percent increase over the year. (1)  Sentiment reports indicate that consumers feel increasingly confident that it is a “good time to sell.” Survey measures have been corroborated by recent hard data as the NAR reports properties are selling at a faster rate. Existing homes were on the market for an average of just 34 days in March, down from 45 days in February and 50 days in January. Low inventories and rising demand are likely to continue to fuel price pressures. (1)

Europe:  Navigating Europe out of the global risks and tensions both domestic and global, has been a challenging task. European recovery is set to continue this year and the next. For the first time in nearly a decade, Europe’s member states’ outlook is bright. However, Europe is not without uncertainty. (2)  Inflation in the eurozone is also on the rise. Thanks to the recent increase in energy prices, inflation is forecasted to reach just below the 2% target mark over the medium term. Core inflation measures, which omit fluctuations in energy and food prices, is on a gentler slope, most importantly however, it’s advancing in the right direction – upwards. (2)

Asia:  South Asian Climate Outlook Forum (SASCOF) has forecast a normal monsoon for South Asia including India. It indicates neutral ENSO conditions are likely to continue through the middle of the monsoon season, while weak El Niño conditions are likely to develop in the second half of this year. (3)  The key features of these conditions are as follows: ENSO Conditions over the Pacific Ocean The El Niño/Southern Oscillation is one of the global-scale climate phenomena that have a significant influence on the year-to-year variability of the monsoon over South Asia. The weak La Nina conditions over the equatorial Pacific prevailed during the second half of the last year and weakened to a neutral ENSO level in the early part of 2017. At present warm neutral ENSO conditions are prevailing. Recent changes. (3)

Latin America:  A document circulating in Peru, part of a broad political corruption investigation, stands as a quaint piece of Hugo Chávez memorabilia. It’s a 2006 letter allegedly penned by the late socialist Venezuelan president to one of his regional comrades, Peruvian presidential candidate Ollanta Humala. It suggests Chávez gave Humala’s campaign $2 million in what the letter calls “revolutionary aid.” (4)  Humala, who became Peru’s president in 2011 and left office last year, denies taking cash from Chávez. But the letter recalls something larger: a time when Venezuela wielded clout. A decade ago, as crude prices soared above $100 a barrel, the South American nation with the world’s largest oil reserves was a petro sugar daddy. The firebrand Chávez cast his largesse from the Bahamas to Buenos Aires, buying influence for his left-wing, anti-U.S. revolution. (4)

Monday 4/24

• The Nasdaq composite, the most weighted with tech stocks among the major indexes, was up 1.2% while the S&P 500 gained 1%. (5)
• The Dow Jones industrial average also rose 1%. Dow component Home Depot (HD) cleared resistance around 150 and is rising from support at the 50-day moving average. Home improvement rival Lowe’s (LOW) topped an 84.10 entry, but the stock dipped below it and volume was light. (5)

Tuesday 4/25

• The Dow closed at 20,996.12, up 232.23 points, or 1.12 percent, while the broader S.&P. 500 ended at 2,388.61, up 14.46 points, or 0.61 percent. (6)

Wednesday 4/26

• The Dow Jones industrial average rolled into Wednesday’s session up 2.2% since Monday morning and trading less than 1% below its March 1 high. The S&P 500 is ahead 1.7% so far this week and just a half-percent off its high. The Nasdaq has taken new highs in each of the past two days, up 1.9% over those combined sessions. (5)

Thursday 4/27

• The Dow Jones industrial average rolled into Wednesday’s session up 2.2% since Monday morning and trading less than 1% below its March 1 high. The S&P 500 is ahead 1.7% so far this week and just a half-percent off its high. The Nasdaq has taken new highs in each of the past two days, up 1.9% over those combined sessions. (5)

Friday 4/28

• The Nasdaq Composite Index COMP, -0.04% edged down 3 points to 6,045 after briefly touching an intraday high at 6,074.04. Big gains from tech heavyweights Amazon.com Inc. AMZN, +0.76%  and Alphabet Inc. GOOG, +3.93% GOOGL, +4.19% following upbeat earnings helped to slow the index’s slide. (7)

Contributor: Thomas Padula

Source:

(1)  Wells Fargo Economic Group

(2)  Investing.com

(3)  The Economic Times 

(4)  Bloomberg

(5)  Investor’s Business Daily

(6)  New York Times

(7)  MarketWatch