April 3, 2017 – Weekly Market Commentary



 

CNBC Logo

Natalia Wojcik – CNBC
Consumer Confidence Soars in March to Highest Level Since December 2000

Summary:
The Consumer Confidence Index hit its highest level in 16 years last week, easily beating analysts’ expectations. Consumer spending activity is essential to generating future growth and this survey indicates positive short-term prospects for the economy.

 

Union Jack Flag

BBC News
‘No turning back’ on Brexit as Article 50 Triggered

Summary:
The UK officially triggered the Brexit by invoking Article 50. The law gives the EU and the UK two years to reach an agreement. The negotiations are expected to be difficult. British Prime Minister Theresa May has taken a hard stance on specific policies such as immigration and trade. The EU is unlikely to show much flexibility with regards to its principal policies, some of which run counter to May’s desires.

 

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Christine Wang – CNBC
Fed’s Fischer Says He Sees Two More Rate Hikes in 2017

Summary:
Federal Reserve Vice Chairman Stanley Fischer said that he expects two more rate hikes in 2017. Fischer admitted that the Fed closely watching the Trump administration. The White House will have an impact on the Fed’s future actions, said Fischer, but rate hike decisions are unlikely to be affected by policies which have not been implemented.

 

Tablet and Chart

Greg Robb – MarketWatch
Fed’s Kaplan Sees Risk Washington Could Derail the Expansion

Summary:
Dallas Fed President and FOMC voting member, Rob Kaplan, said that he is worried about policies from Washinton causing consumer activity to decline. Policies which could increase costs, such as healthcare reform, or complicate employment situations, such as trade reform, are his biggest concerns. Despite these fears, Kaplan still expects at least 3 rate hikes this year

 

Yardeni Research

Isabelle Mateos y Lago – Chief Multi-Asset Strategist – BlackRock
After Brexit Begins, a Slowdown Ahead?

Summary:
Mateos y Lago sees a UK slowdown ahead as the Brexit transforms from a debate into a reality. The surprising 2016 UK expansion was fueled by strong consumer spending and a weaker pound. Higher inflation has now pushed real household wages into negative territory which creates headwinds for future consumer activity. Volatility is also expected to increase as negotiations between the UK and EU begin. Mateos y Lago sees possible upside in commodities and short-term government bonds.

 

Yardeni Research

Dr. Ed Yardeni – Chief Investment Strategist – Yardeni Research Inc. 
Many Happy S&P 500 Revenues

Summary:
Rebounding commodity prices and stable demand have led to a rebound in commodity company revenues, says Dr. Yardeni. Prices are still low, and consumers are benefitting more than producers are suffering. Dr. Yardeni expects Q1 top-line growth for energy companies to be above expectations. The energy recession is over, he says, which should lead to higher S&P 500 revenues and earnings going forward.

 

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Jeffrey Kleintop – Chief Global Investment Strategist

Top Five Trade Issues Investors Should Be Watching

Summary:
Total world trade is equivalent to more than half of the world’s economic output. Kleintop says that investors should keep an eye on regarding global trade: Brexit negotiations, Trump executive orders, the meeting between Chinese President Xi Jinping and President Trump, NAFTA renegotiations, and the RCEP trade deal which focuses on the Asia-Pacific region. So far, trade issues are evolving slowly under President Trump which is a positive for investors. The danger lies in the potential for sudden changes to policies.

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