Investment Commentary –April 10th, 2018

Year to Date Market Indices as of Market Close April 10th, 2018
Dow 24,408 (-1.26%)
S&P 2,656 (-0.63%)
NASDAQ 7,094 (2.77%)
Gold $1,342 (2.14%)
OIL $65.59 (9.39%)
US 10Y Treasury 2.80 (39.38%)
Barclay Bond Aggregate (-2.20%)

Dow jumps over 400 points as China’s Xi soothes trade fears

The Dow Jones Industrial Average gained more than 400 points Tuesday as U.S. stocks surged thanks to a less-aggressive stance on trade taken by Chinese President Xi Jinping.
Xi’s conciliatory comments on tariffs helped to ease concerns about an escalating conflict between the world’s two largest economies, sending prices of risky assets such as global equities and commodities higher.

What did the main benchmarks do?

The Dow Jones Industrial Average DJIA, +1.79% jumped 428.90 points, or 1.8%, to 24,408.00. The S&P 500 SPX, +1.67% finished 43.71 points, or 1.7%, higher to 2,656.87. The Nasdaq Composite Index COMP, +2.07% climbed 143.96 points to 7,094.30, a gain of 2.1%.

The day’s gains were broad, with 28 of the 30 Dow components as well as nine of the 11 S&P 500 sectors finishing in positive territory. Energy was the biggest gainer, up 3.3%, while tech shares jumped 2.5%.

Around the Web

Earnings season optimism

First-quarter earnings reports are scheduled to begin coming in this week, and analysts are expecting the strongest quarterly profit growth in eight years, in part due to the new tax law and its reduction of corporate rates. Earnings for companies in the S&P 500 are expected to rise an average of 18% compared with the same quarter a year ago, according to analysts surveyed by Thomson Reuters I/B/E/S Estimates.

Jobs setback

On the heels of February’s big gain of 326,000 jobs, the March employment report was something of a disappointment. The economy generated 103,000 new jobs, far below economists’ expectations and the fewest in six months. The unemployment rate was unchanged at 4.1% and wage growth was steady.

Upcoming events

Wednesday: Release of minutes from March 20–21 meeting of the U.S. Federal Reserve Board

Other Notable Indices (YTD)

Russell 2000 (small caps) 0.52
EAFE International -0.53
EAFE Emerging Markets 0.40
Shiller Cape Annuity index 0.46

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.