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Stephen Lennon’s Market Review April 9th

09 April 2018

LAST WEEK IN 30 SECONDS...

Last week saw more volatility on Wall Street as fears intensified over the possibility of a global trade war. The major benchmark indices rallied in the middle of the week but came undone on Friday as the pressure finally told from China’s decision to place a 25% tariff on a list of 106 US products including soybeans and orange juice. The DJIA, S&P 500 & Nasdaq all ended the week lower. The DJIA has now fallen more than 10% since its peak on January 26th while the tech-heavy NASDAQ is the only major global index that is positive YTD, clinging on to a 0.17% gain.

It was a much better week in Europe as investors appear to be looking by the trade tensions to the sound underlying economic fundamentals. After a price drop of around 7% as well as upward revised earnings – stocks in the region look to be priced more attractively. The DAX & the FTSE 100 were the standout performers, adding over 1%.

In fixed income markets, global yields were generally unchanged while the USD had a good week – increasing in value against the Yen & Euro. According to BOA Merrill Lynch’s recent global fund manager survey, the short USD trade remains the second most crowded trade after bets on more gains in the tech sector.

THIS WEEK IN 30 SECONDS...

Earnings season kicks off this week with major US banks JP Morgan Chase, Citigroup & Wells Fargo among the companies to publish their Q1 2018 results. Expectations are high for companies with data likely to reflect Trump’s recent tax cuts. Elsewhere, Mark Zuckerberg will testify in Congress on Tuesday as the repercussions from the Cambridge Analytica data leak continue to play out.

CHART OF THE WEEK

Spotify floated on the NYSE last week taking a non-traditional approach via direct listing. Unlike a conventional listing, Spotify did not sell new shares to raise money but rather gave existing shareholders the opportunity to sell. The price opened at $166 before closing below $150.

Screen Shot 2018-05-11 at 10.35.17 PM
Equities  Value 1 Wk Change YTD
DJIA 23932.76 -0.71% -3.18%
NASDAQ Comp 6915.11 -2.10% 0.17%
S&P 500 2604.47 -1.38% -2.59%
DAX 12241.27 1.19% -5.24%
FTSE 100 7183.64 1.80% -6.56%

 

Bonds 10 Yr Value 1 Wk Change YTD
Germany 0.50% 0.00 0.07
Ireland 0.91% 0.00 0.24
UK 1.39% 0.04 0.20
Japan 0.04% -0.01 -0.01
USA 2.77% 0.03 0.36

 

Forex Value 1 Wk Change YTD
EUR/USD $1.226 -0.30% 2.11%
EUR/GBP £0.871 -0.70% -1.93%
EUR/YEN ¥131.33 0.41% -2.91%
USD/YEN ¥107.11 0.71% -4.92%

 

Commodities Value 1 Wk Change YTD
WTI Crude $65.80 1.43% 8.83%
Brent Crude Oil $70.18 0.13% 5.36%
Gold 100 oz $1,348.55 1.90% 3.46%
DJ USB Index $87.44 -0.04% -0.82%
Ger Fitzgerald

By Gerald Fitzgerald, Investment Consultant

Gerald Fitzgerald joined Invesco’s Investment Consulting team in 2015 and has 10 years industry experience assisting clients with their investment & actuarial requirements. Gerald is a Qualified Financial Adviser (QFA) and a graduate of both University College Cork and University College Dublin.

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