Weekly Market Drivers | LPL Financial Research

Stocks Resume Upward Momentum, Dow Lags on Boeing’s Woes. 

US: S&P 500 Index +2.9%, Dow +1.6%, Nasdaq +3.8%
Europe: STOXX Europe 600 +2.8%, German DAX +2.0% France CAC 40 +3.3%, U.K. FTSE 100 +1.1%
Asia: Japan Nikkei +2.0%, China Shanghai Composite +1.75%, Korea KOSPI +1.8%
Rates/Commodities: 10-Year Treasury yield -5 basis points to 2.59%, WTI crude oil +5.1%, COMEX gold: -0.2%

U.S. equities rebounded from last week’s losses on the back of generally upbeat economic data and a lack of negative headlines.

Developments on the U.S.-China trade front were modest, though early-week headlines indicating that Beijing is “full of confidence” about the next stage of trade growth, along with data that showed Chinese exports surged 39.9% year over year in the first nine days of March, helped stocks get off to a fast start that halted the S&P 500’s five-day losing streak. U.S. economic data leaned positive and included a pickup in durable goods orders, a solid rebound in January retail sales, and stagnant consumer inflation readings that support the Federal Reserve’s recent pivot to a more accommodative monetary policy stance. Gains moderated over the balance of the week, but eventually the S&P 500 broke through a key resistance level (2817) that has plagued it for the past several months. A surge in technology stocks helped the Nasdaq rally nearly 4%, while a 10% skid in shares of Boeing dragged industrial stocks to the bottom of the sector rankings and prevented the Dow from keeping pace with the broader market.

Overseas, consumer inflation continues to stagnate across Europe, while the composite Eurozone saw a pickup industrial production last month despite Germany, the region’s largest industrial economy, registering a surprise decline. Elsewhere, U.K. policymakers voted to extend the March 29 deadline for the country’s pending separation from the European Union by two months after Prime Minister Theresa May again failed to secure a majority of votes for an updated deal (more on recent Brexit developments here). “The environment for investing in foreign developed stocks remains fragile, particularly in Europe,” said LPL Chief Investment Strategist John Lynch. “We suggest tactical investors maintain a wait-and-see approach.”

The Federal Reserve (Fed) meeting highlights the week ahead, though no rate hike is expected. Leading Economic Index (LEI) and Philadelphia Fed Business Outlook releases are also noteworthy. Overseas, attention in Europe will be focused on Brexit developments with the economic docket being light aside from Germany’s Producer Price Index and Eurozone consumer confidence readings. In Japan, import and export data are due out, along with LEI data on Wednesday. Track these and other important events on our Weekly Global Economic & Policy Calendar.

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