Market Commentary, Week Ending in 4/4/2017

BY MIKE DEGEN

 

SUMMARY

Markets had a positive week overall, but that week did not end on a high note. the global economy seems very calm at the moment.

 

MARKETS (as of [4/3/17- CLOSE]; change since [3/27/17])

Equities

  • S&P 500: 2358.84 (+17.25)
  • DJIA: 20650.21 (+99.23)
  • FTSE 100: 7282.69 (-10.81)

Interest Rates

  • UST-10 Yr.: 2.326% (5 week low)

Commodities

  • Gold (spot): 1255.20 (+2.3)
  • Oil (Brent): 53.12 (+1.22)

Currencies (app.: +, dep.: -)

  • € (EUR/USD): .96 (+)
  • ¥ (USD/JPY): 110.75 (-)

ECONOMIC HIGHLIGHTS

1.      White House recently released financial disclosure forms of White House staff. The main takeaway is that there is a lot of money in Trump’s administration. Something to watch will be how each of them manages conflicts of interest which has been an issue continuously brought up.

2.      Construction spending rose .8% in February which brought it to its highest level in 11 years. It will be interesting to see if this trend continues during the Trump administration.

POLICY AND POLITICS

1.      The French presidential election is heating up. Polls show that centrist candidate Macron and right candidate Le Pen are neck-and-neck. Le Pen has drawn numerous comparisons to Donald Trump although she has recently tried to distance herself from him. Her success can be partially attributed to rising populist sentiment around the world and could signal an increase in protectionism around the world.

2.      It seems to be that Democrats are going to filibuster Gorsuch. Republicans are almost certainly going to go nuclear. This means that they will change Senate practices so that Gorsuch is confirmed. This is important because it demonstrates an increase in political instability, as well as an increase in partisanship.

INVESTMENT IDEA

Longing a United States based construction company or weapons manufacturer. As time goes on, it becomes clearer and clearer that Trump will increase military spending, as well as spending on infrastructure. Longing the appropriate company could be very beneficial in the next few years.

WHAT TO WATCH

How the French presidential election pans out. If Le Pen wins, there is significant evidence that the global sentiment is becoming increasingly protectionist and populist (Bexit, Trump). This would cause significant changes in trade policy around the world.