Market Update: Tuesday, April 10, 2018

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Daily Insights

  • The volatility continues. All of last year, the S&P 500 Index gained or lost more than 1% on a single day eight times, the least since the mid-’60s. There have already been 27 1% moves out of the first 67 trading days of 2018, which would come out to 101 1% moves on the year should this volatility continue. That would be the most 1% days since 2009. It doesn’t stop there though, as there have been 8 2% moves this year, with 5 occurring within the past 12 days. The last time we saw volatility like that in such a short time frame was back in August/September 2015.

  • Little movement in yields last week. Despite continued headlines related to tariffs, Treasury yields traded within a relatively tight range last week, with both the 10-year and 2-year Treasury yields increasing by about 2 (.02%) basis points week over week, to 2.79% and 2.29%, respectively. Corporate and high-yield spreads, which had risen slightly in sympathy with equity volatility in recent weeks, also started to stabilize and even move lower. We discuss spreads across a number of sectors in this week’s Bond Market Perspectives, due out later today.

  • President Xi calms fears. Fears that President Xi would stoke trade rhetoric is taking a back seat after his speech at the Boao Forum in Asia. He struck what many call a conciliatory tone, while promising to reduce import duties on automobiles, improve the investment environment for international companies, further open the financial sector, and enforce the protection of intellectual property rights for foreign firms. Markets appear to be taking this as positive news and are rallying around the globe as a result.

  • What type of bottom will this be? Markets can bottom in many ways. From V-bottoms, to W-bottoms, to something more. Remember, the last time we had volatility like the past few months was August 2015 and it took six months for the ultimate low in the S&P 500 to take place in February 2016. Today on the LPL Research blog we take a look at what this market bottom could look like.

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Click Here for our detailed Weekly Economic Calendar

Tuesday

  • NFIB Small Business Optimism (Mar)
  • PPI (Mar)
  • Wholesale Trade & Inventories (Feb)
  • France: Industrial Production (Feb)
  • Italy: Industrial Production (Feb)
  • ECB: Visco
  • Japan: Machine Tool Orders (Mar)
  • Japan: Core Machine Orders (Feb)
  • Japan: PPI (Mar)
  • China: CPI & PPI (Mar)

Wednesday

Thursday

  • Weekly Jobless Claims (Apr 7)
  • France: CPI (Mar)
  • Eurozone: Industrial Production (Feb)
  • ECB: Monetary Policy Meeting Accounts
  • Bank of Mexico: Overnight Rate
  • BOE: Credit Conditions and Bank Liabilities Surveys
  • China: Trade Balance (Mar)
  • China: Imports & Exports (Mar)

Friday

  • Univ. of Michigan Sentiment (Apr)
  • Germany: CPI (Mar)
  • Eurozone: Trade Balance (Feb)

 

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