Market Commentary, 05/18/18
Both the Dow and S&P closed the day relatively flat and the week down slightly, with both off about 0.5%.
It appears the primary concerns with the market this week were political. These concerns were led by new government proposals in Italy, the upcoming meeting between President Trump and Kim Jong Un, and continuing trade talks with China (WSJ).
On Thursday a variety of outlets reported that China has offered a package, including trade concessions and increased purchases of American goods, to cut the trade deficit with the US by up to $200 billion a year. However, a Chinese official denied the proposal today (MarketWatch).
Mortgage rates jumped to their highest level since 2011, with an average 30 year fixed-rate mortgage closing the week at 4.61%, up from 4.55% last week. This increase is directly related to the gradual increase in the Fed Funds Rate, and marks a departure from the artificially low rates of the last eight years (WSJ). That said, mortgage rates are still at a historic low level.
The first quarter earnings season is complete and corporate earnings are the best in 24 years. While the stock market hasn’t yet shown much enthusiasm, Goldman Sachs is reporting that “executives remained upbeat about the economic environment, especially given the boost from tax reform.” The consensus among executives is that relatively strong growth should continue at least through the end of the year. This remains in line with our positive outlook on both the stock market and the economy in the short-term.
Jeremiah Patterson, CFP®
Copelin Financial Advisors
514 Brooks Street
Sugar Land, TX 77478
Phone: 281 240-2902
Fax: 281 240-2856
Securities offered through ProEquities, Inc., a Registered Broker-Dealer and Member FINRA & SIPC Advisory Services offered through Harvest Investment Services, LLC., a Registered Investment Advisor Copelin Financial Advisors, Inc and Harvest Investment Services, LLC are independent of ProEquities, Inc.