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Newsletter: In the Markets – Week-Ending March 17th

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending March 17th
Crystal Brook Advisors
We Make Financial Planning Crystal Clear™

United States: Overall net TIC outflows totaled $42.8 billion in December. Foreign private investors’ appetite for U.S. securities weakened, selling $57.1 billion in December. Much of the selloff was concentrated in Treasuries and equities. Foreign official investors purchased a net $14.3 billion in securities, marking the first time in five months that the divergence between foreign private and official buyers narrowed. (1)  American investors decreased their holdings of foreign assets by $1.1 billion, marking 11 out of the past 12 months of being net sellers. (1)  Meanwhile, foreign ownership of long-term U.S. securities saw some movement as China’s Treasury holdings increased by $9.1 billion, China still remains the second highest holder of U.S. debt. On the month, Japan’s holdings fell to $1.1 trillion. (1)

Europe: For the first time in almost a decade, all of Europe’s economies are set to grow. But major questions remain on whether that growth can actually happen this year or next with all the uncertainty surrounding us, from mixed messages from the new US administration, or a spate of elections across Europe, to worries about Brexit and China. (2)  In the euro area Inflation is now forecast to increase to 1.7% this year. In the EU, it is forecast to rise to 1.8%. (2)  

Asia:  With uncertainty over economic policy direction in the United States, Southeast Asian economies appear less reliant on U.S. monetary decisions, with analysts saying China’s influence is likely to keep growing in the region. (3)  On Thursday, a sign of the region’s greater financial independence came as most regional markets failed to follow a .25 basis point rise in interests rates set by the U.S. Federal Reserve. But China, Hong Kong and Singapore did raise interest rates. (3)  London based analysts at Capital Economics said for most emerging economies in Asia, local factors rather than the actions of the U.S. central bank will determine interest rate policy. (3)

Latin America:  Brazil ended a 22-month streak of formal job losses in February in a sign that the economy may be emerging from the worst recession in a century. (4)  The country added 35,612 jobs in February in the first monthly increase since March 2015, President Michel Temer said on Thursday at an event in Brasilia, with many of the positions generated in services, agriculture and manufacturing. “This news is important because 35,000 Brazilians have the chance to work and lead a dignified life,” he said. (4)

Monday 3/13

  • The S&P 500 index rose 0.87 point to close at 2,373.47 while the Nasdaq Composite Index edged up 14.06 points, or 0.2%, to end at 5,875.78. (5)
Tuesday 3/14
  • European markets closed lower on Tuesday as investors digested political events across the continent and awaited a probable interest rate hike from the U.S. Federal Reserve. (6)
  • The pan-European Stoxx 600 ended more than 0.3 percent lower with most sectors and major bourses trading in negative territory.  (6)
Wednesday 3/15
  • The Federal Reserve hiked its key interest rate by a quarter point on Wednesday, signaling that two more rate hikes are likely this year, just as financial markets were expecting. (7)
  • After the Fed’s announcement, broad market indexes added to gains on the stock market today, and kept rising following Yellen’s comments. The Dow industrials rose 0.5%, the S&P 500 index 0.8% and the Nasdaq composite 0.7%. The big-cap Nasdaq 100 hit an all-time high, with Apple (AAPL), Facebook (FB) and Google parent Alphabet (GOOGL) all reaching record levels intraday. (7)
Thursday 3/16
  • The Dow Jones Industrial Average (DJI) increased 0.5%, or 112.73 points, to close at 20,950.10 The S&P 500 rose 0.8% to close at 2,385.26. The tech-laden Nasdaq Composite Index closed at 5,900.05, gaining 0.7%. The fear-gauge CBOE Volatility Index (VIX) declined 8.1% to settle at 11.30. A total of around 7.87 billion shares were traded on Wednesday higher than the last 20-session average of 6.98 billion shares. Advancers significantly outpaced declining stocks on the NYSE. For 85% stocks that advanced, 13% declined. (8)
Friday 3/17
  • Presently, Friday’s action appears to be particularly placid, with the S&P 500 trading with a fairly narrow band, hovering around break-even levels along with the Dow Jones Industrial Average DJIA, -0.05%  and the Nasdaq Composite Index COMP, +0.00% However muted trade has been the characteristic norm for the broader U.S. market lately, which hasn’t seen a decline of 1% in 107 trading days, but has steadily made an assault on all-time highs inspired by President Donald Trump’s pledges to unfurl a batch of measures to spur economic growth. (9)

Market Close

  • For the week, the funds have risen between 0.4% and 0.6%, slightly outpacing the S&P 500 SPX, -0.14% which is up about 0.35% on the week. (9)

Contributor: Thomas Padula


(1) Wells Fargo Economic Group

 (2) Euronews

(3) Voice of America

(4) Bloomberg

(5) Morning Star

(6) CNBC 

(7)Investor’s Business Daily

(8) Nasdaq

(9) Market Watch 

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