February 5, 2018 – Weekly Market Commentary


US Federal Reserve Logo - Market Commentary

Jeff Cox – CNBC
Fed Leaves Rates Unchanged but Gives More Aggressive Inflation Expectations

Summary: Janet Yellen’s last meeting as chairman of the Federal Reserve resulted in no change of current policy.  FOMC members indicated that they expect inflationary pressures to increase as the year moves on and current expectations of rate three hikes in 2018 remain probable. Jerome Powell will be replacing Janet Yellen as chairman.


Mall Interior - Market Commentary

Lucia Mutikani – Reuters
US Consumer Spending Rises, Savings Drop to 10-Year Low

Summary: U.S. consumer spending rose significantly at the end of 2017 showing a large increase in overall demand. On the flip side of the spending figures, overall savings declined to a 10-year low, indicating that many people may be dipping into savings to support spending habits. The decrease in savings could limit the extent of consumption moving forward unless income growth is able to create sustainability.


MarketWatch Logo - Market Commentary

Jeffry Bartash – MarketWatch
Consumer Sentiment Slips in January but Remains Near Post Recession High

Summary: Record stock market levels and upcoming tax cuts are continuing to support consumer confidence. While consumers seem to have little to worry about, the news sparked a sell off in the markets as interest rates and inflation expectations rose. If inflation rises faster than expected the Fed may raise rates at a pace that will create difficulties for stocks.


Charles Schwab Logo - Market Commentary

Jeffrey Kleintop – Charles Schwab
Stocks Fall: Why Now, What’s Next?

Summary: US markets had their worst week since 2016 last week. The catalyst for the recent sell off is a fear that the economy is experiencing too much growth. An overheating economy may cause central banks to pull back stimulus measures and signal that we are nearing the end of a long-term market cycle. Increased volatility is common at this stage of a market rally. Schwab expects pullbacks to be temporary as interest rates and inflation find their footing. 


Line Graph on Tablet - Market Commentary

Liz McCormick – Bloomberg Markets
Treasury Yield at 3% May Mark End of Rout, or Just the Beginning

Summary: 10-Year Treasury yields approached the 3% mark following positive jobs and wage growth reports. Some experts say that breaching 3% could trigger a bond bear market that would become a headwind to the stock market. Stocks could keep interest rates in check if volatility continues. Equity market selloffs typically boost demand for Treasuries.





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