- 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.
- 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)
- CPI (Mar)
- Core CPI (Mar)
- Monthly Budget Statement (Mar)
- FOMC Meeting Minutes
- Italy: Retail Sales (Feb)
- UK: Trade Balance (Feb)
- UK: Industrial Production (Feb)
- UK: NIESR GDP Estimate (Mar)
- ECB: Non-monetary Policy Meeting
- Japan: Money Supply (Mar)
- 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)
- Univ. of Michigan Sentiment (Apr)
- Germany: CPI (Mar)
- Eurozone: Trade Balance (Feb)
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.
Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
This research material has been prepared by LPL Financial LLC.
To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.
The investment products sold through LPL Financial are not insured deposits and are not FDIC/NCUA insured. These products are not Bank/Credit Union obligations and are not endorsed, recommended or guaranteed by any Bank/Credit Union or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.
For Public Use – Tracking # 1-718431 (Exp. 4/19)