Weekly Update – Swings Continue as Markets Search for a Bottom

Weekly Performance

US: S&P 500 Index +2.12%, Dow +2.65%, Nasdaq +1.01%
Europe: STOXX Europe 600 +1.38%, German DAX +1.77%, France CAC 40 +1.41%, U.K. FTSE 100 +1.95%
Asia: Japan Nikkei +2.63%, China Shanghai Composite +.24%, Korea KOSPI +.81%
Rates/Commodities: 10-Year Treasury yield -7.4 basis points to 2.74%, WTI crude oil +5.51%, COMEX gold -1.63%

Global equities managed to end the week in positive territory, though volatility persisted as traders’ attention shifted from upbeat news on tariffs and trade to the potential for increased regulation in the technology sector. The week’s economic data, though still pointing to robust global growth, provided little in the way of market direction. LPL Research Chief Investment Strategist John Lynch noted: “It’s important to keep in mind that bottoming is a process, and market swings are likely to continue over the near term. The risk of a policy misstep remains, but we believe the current economic and business environment bodes well for investors.”

Drilling down, stocks staged a sharp rally to kick off the week on reports that the U.S. and China were quietly holding negotiations in a bid to avert a trade war. Despite continued progress on that front as the week progressed, the gains were short-lived as investors’ focus shifted to the market’s largest sector, technology, amid growing debate over companies’ handling of personal data, as well as recent scrutiny over the safety of autonomous vehicles. In keeping with recent action, broad strength returned in Thursday’s session that left all 11 S&P 500 sectors in positive territory for the holiday-shortened week.

Looking ahead, March U.S. nonfarm payrolls, due out Friday, headlines the week; but investors will first chew on ISM and Markit manufacturing (Monday) and Services (Wednesday) data. Also, Thursday’s U.S. trade balance figures may attract more attention than usual amid ongoing tariff and trade negotiations. Foreign investors will also get a series of Purchasing Managers’ Index data throughout the week with the Eurozone, Germany, France, Japan, and China reporting.

 

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