Weekly Market Review - May 22, 2018

Weekly Market Review - May 22, 2018

by Chad Hassinger on May 23, 2018

Finance

By Bradley J. Rathe
Chief Investment Officer

"Whenever you find yourself on the side of majority, it is time to pause and reflect." Mark Twain

Weekly look back:
  1. Retail Sales were strong enough last week to increase inflation fears and hence to push Interest rates higher.  The US Ten Year Treasury settled the week at the highest level going back more than 7 years above 3% at 3.06%.
  2. Tariff and geopolitical news continue to be a main driver of volatility for risk markets.  Central to this news was the ongoing push and pull with China to reach a deal as China promised to bring down the trade deficit by more than $200 billion.  Equity markets moved higher on the news.
  3. Industrial Production had another good month as manufacturing is key to why President Trump is pressing for a policy shift on tariffs on steel intended to help the heavy machinery industry.
Weekly look ahead:
  1. FOMC Minutes are released on Wednesday and should not give much in surprises.  Interest rates have gone up since the meeting however very little inflation has shown up in the macro numbers so far.
  2. Durable Goods are expected to weaken this month as aircraft orders are expected to weaken after an extended strong run.
  3. Housing has surged to start the year.  This week we have both existing home sales and new home sales.  Housing is a very important sector to the economy because of all the jobs related to the industry.  
World Macro highlights for this week: 

Wednesday: New Home Sales, FOMC Minutes
Thursday: Existing Home Sales
Friday: Durable Goods, Consumer Sentiment

2018 Yearly Index Returns as of 5/18/2018

S&P 500 

2.09%

Europe Equity

1.99%

Emerging Equity

-1.91%

US 10 Yr

+.66 bp

US Small Cap Stocks

5.09%

 

Graph Of The Week

Even with rising mortgage rates housing has been very strong to start the year.

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