WHAT MOVED THE MARKET THE BIGGEST STORIES THAT MATTERED FOR THE MARKET LAST MONTH...
four rate hikes this year. The markets initially misinterpreted his language regarding inflation and interest rates, causing some wild equity price swings in recent sessions. However, upon analysis, he toed the line his predecessors followed the past nine years: full employment and stable pricing. Earnings for the first quarter have concluded, and the results were excellent. The expected S&P 500 earnings growth rate is now projected to be 17.8%. The price-to-earnings multiple on the index is 18. The key for equities going forward is the 10- year bond yield. A move above 3% will trigger a move out of stocks and, presumably, into bonds. In fact, self-anointed “Bond God” Jeffrey Gundlach of DoubleLine Capital said that he expects an explosive move up in bond yields and a subsequent sell-off in equities and high-yield bonds. He hates the estimated $1.1 trillion increase in the deficit because of tax cuts and increased spending. He expects the dollar to move lower against the Japanese yen, euro, British pound, and the Swiss franc. He concludes his missive on the cheery note that equities will be down in 2018... THE TARIFF TWEET STORM CONTINUES TO RAGE. The facts are that China runs a $350 billion surplus with the United States. The country dumps goods, controls wages, manipulates its currency, and keeps a lot of its markets closed to outsiders. Americans buy cheap goods fromWalmart (WMT) and Target (TGT) and China stashes the dollars. This is clearly
MARKET TURBULENCE CONTINUED TO BE IN FOCUS IN MARCH. Equity markets bottomed out after the short- volatility trade ran its course, with many institutions removing exchange-traded volatility products altogether. The “pain trade” in equities also continued. Equity markets had not seen double-digit losses in well over a year, and investors were spooked when media pundits added to the hype. But interest rates steadied and the positive economic numbers paved the way for an upside in stocks. The Nasdaq Composite Index also returned to make new all-time highs, and the usual suspects led the way... Amazon (AMZN), Apple (AAPL), and Netflix (NFLX) all made record highs. The February jobs report blew away expectations, with 313,00 jobs added versus an expected 205,000. And the prior jobs number from January was revised to 239,000 from 200,000. Inflation remained in check – creating a “Goldilocks” scenario for equity markets. New Federal Reserve Chairman Jerome Powell faced his first testimony as Fed chair and reiterated the Fed’s target of three to
EDITORS
Scott Garliss
John Gillin Greg Diamond
TUNE IN Stansberry NewsWire , everymorning at 8:30 a.m.
12 March 2018
Made with FlippingBook - Online Brochure Maker