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Stephen Lennon’s Market Review March 12th

12 March 2018


Equity markets rallied last week as the major benchmark indices shrugged off concerns
around the threat of trade wars. Things were not looking so bright on Wednesday when
Gary Cohn, Donald Trump’s top economic advisor resigned in protest to Trump’s
protectionist tariffs, sparking a ‘Cohn sell off’. However, investors were placated on
Thursday when Trump ratified the tariffs but crucially exempted Canada & Mexico (2 of
the top 4 exporters of U.S Steel in 2017) from the deal. Allayed to this a better than
expected jobs report published on Friday added up to gains of over 3% for the 3 major
US benchmark indices. US Treasuries fell in reaction to the jobs report pushing the yield
on the 10 Year benchmark Treasury up 3bps to 2.89%.

European stocks took their lead from the US as all of the major regional indices finished
the week higher. The standout performer was the German DAX Index, which added 3.63%
marking its best week since December 2016.

Finally, Donald Trump has accepted an invitation to meet with Kim Jong Un in the near
future. After months of exchanging insults, the two Heads of State will finally come face
to face & speculation is mounting that Trump hopes to tee it up with Kim on his Mar-a
Logo golf course. A match-up worthy of the Ryder Cup!


Look out for US inflation data this week with February figures due to be published on Tuesday. Core CPI is projected to remain steady at 1.8% affirming the Fed’s current trajectory of rate hikes. Eurozone figures will be released on Friday, which are expected to confirm consumer prices rose 1.2% in February.


The below chart gives a good visual representation of the importance of China in world commodity markets. China is by far the world’s largest construction market, accounting for more than half of the global demand for cement, nickel, coal, copper and steel!

Screen Shot 2018-05-11 at 10.50.13 PM
Equities  Value 1 Wk Change YTD
FTSE World € 573.11 2.73% -0.27%
DJIA 25335.74 3.25% 2.49%
Nasdaq Comp 7560.81 4.17% 9.52%
S&P 500 2786.57 3.54% 4.22%
DAX 12346.68 3.63% -4.42%
Bonds 10 Yr Value 1 Wk Change YTD
Germany 0.65% 0.01 0.23
Ireland 1.08% -0.01 0.41
UK 1.49% 0.02 0.30
Japan 0.05% -0.02 0.00
USA 2.89% 0.03 0.48
Forex Value 1 Wk Change YTD
EUR/USD $1.232 0.07% 2.59%
EUR/GBP £0.888 -0.62% 0.08%
EUR/YEN ¥131.76 1.48% -2.59%
USD/YEN ¥106.96 1.40% -5.06%
Commodities Value 1 Wk Change YTD
WTI Crude $62.02 1.36% 2.58%
Brent Crude Oil $65.44 2.39% -1.76%
Gold 100 oz $1,321.86 0.14% 1.41%
DJ USB Index $87.95 -0.22% -0.24%
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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