X Weekly Market Commentary April 9, 2018
Posted on April 9, 2018

Weekly Market Commentary April 9, 2018

Market Commentary

Continued concerns over the risk of a trade war pushed markets lower, and a slowing economy pushed stocks lower. The S&P 500 fell 1.4% last week. The global MSCI ACWI dropped 0.7%, and the Bloomberg BarCap Aggregate Bond Index dipped 0.1%.

The declines reflect investors’ concerns the back and forth between the U.S. and China could reduce global trade and economic growth, pushing corporate profits lower. Global economic reports, including the U.S. jobs number discussed below, are generally missing expectations. Our view is concerns over trade and economic decline are both overdone. As previous updates have mentioned, we expect a very public negotiation on trade and steady, but not spectacular, economic growth. This week’s events affirmed our basic outlook.

Key points for the week

  • Stocks fell as protectionist concerns increased.
  • Economic data remains solid but has dipped below heightened expectations.
  • The U.S. economy produced 103,000 jobs, falling short of expectations.

Market Perspective

The U.S. jobs report for March was released on Friday, displaying somewhat disappointing figures. Though the numbers were below what many analysts predicted, they still showed signs of a healthy economy. Analysts forecasted job growth around 185,000 jobs, but only 103,000 jobs were created and unemployment stayed at 4.1% for the sixth consecutive month. The metric most concerning for investors has been wage growth due to the threat of increased inflation. The report showed year-over-year wage growth at 2.7%, a modest number given the consistent levels of unemployment and average job growth of 200,000 per month.

Fun story of the week

Jack Nicklaus’ grandson hits hole-in-one

A touching moment happened during the annual Par-3 contest, which takes place a day before the Master’s Tournament begins. Pro golfers often bring family onto the course to hit a shot or two on the final hole, and Jack Nicklaus’s grandson hit a hole-in-one. A celebration ensued that brought Nicklaus to tears — a proud moment for the grandfather and golf legend.