February 20, 2018 – Weekly Market Commentary



 

American Flag - Market Commentary

Lucia Mutikani – Reuters
U.S. Producer Prices Rise in January; Industrial Output FallsSummary: US producer prices rose 0.4%, boosted by rising gasoline and healthcare costs. The report indicated that inflationary pressures are building. Investors have been watching inflation because if prices begin to rise at a faster than expected pace the Federal Reserve is likely to raise interest rates more aggressively this year. 
 

Construction Worker - Market Commentary

David Shepardson – Reuters
Trump Unveils Infrastructure Plan; Uphill Battle Awaits in CongressSummary: The President unveiled plans to authorize $200 billion over 10 years to spur $1.5 billion in road, bridge, and other projects focused on US infrastructure. The plans seek to reshape how the federal government funds projects and could do away with many regulatory hurdles that new projects have previously faced. 
 

Shopping Mall - Market Commentary

Steve Goldstein – MarketWatch
Consumer Sentiment Climbs to Second-Highest Level in 14 YearsSummary: Consumer sentiment rose to 99.9 in the first reading in February. The measure was the second highest in the last 14 years. Rising confidence has been driven by the results of tax reforms showing up in 2018 paychecks and prices remaining relatively stable. 
 

Ipad showing growth chart - Market Commentary

Silvia Amaro and Thomas Franck – CNBC
10-year Treasury Yield Hits a Four-Year HighSummary: The US 10-year Treasury yield climbed to a four-year high following solid January wage growth data. Yields have been rising as inflation concerns continue to plague the markets. Rising yields could complicate future equity market selloffs. Investors typically buy bonds as a safe-haven asset during downturns but because bond prices fall as interest rates rise the asset class is not offering the same security that it has in the past.  
 

Charles Schwab Logo - Market Commentary

Jeffrey Kleintop – Charles Schwab
Is it Over? Five Misconceptions About CorrectionsSummary: Stocks recovered about half of their losses since the markets peaked but it is still too early to tell what comes next. Kleintop expands on five common misconceptions about what signals the end of a market correction. Economic strength tells us that the decline is unlikely to be the start of a bear market, but the current correction may not be over and  Schwab team expects that the markets will experience more pullbacks this year.
 

BlackRock Logo - Market Commentary

Richard Turnill – Global Chief Investment Strategist – BlackRock
An Eye on Real Rates Amid Short-Term Equity VolatilitySummary: Turnill says that upbeat fundamentals should keep investors confident in the stock market despite the recent correction. Investors should take a look at real interest rates, not inflation. The rise in volatility was driven by the markets reacting to the expectations of higher US growth and deficits. The pace of rate hikes is still important because a rapid change would force the markets to lower return expectations for risk assets. 

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