Investment Commentary – April 17th, 2018

Year to Date Market Indices as of Market Close April 17th, 2018
Dow 24,573 (0.27%)
S&P 2,706 (1.23%)
NASDAQ 7,281 (5.47%)
Gold $1,350 (1.54%)
OIL $66.46 (5.99%)
US 10Y Treasury 2.77 (41.06%)
Barclay Bond Aggregate (-1.66%)

Stocks end higher as tech and consumer shares rally

U.S. equity markets closed solidly higher on Tuesday, led by a rally in technology and consumer discretionary stocks. Investors welcomed a round of better-than-expected earnings reports and solid economic data releases. The Dow Jones Industrial Average DJIA, +0.87% gained 213.59 points, or 0.9%, to 24,786.63, closing in positive territory for the year. The S&P 500 index SPX, +1.07% advanced 28.54 points, or 1.1% to 2,706.38. Meanwhile the Nasdaq Composite COMP, +1.74% was up 124.81 points, or 1.7% to 7,281.10. Among the best performers on the S&P 500, Netflix Inc. NFLX, -0.02% jumped 9% following earnings results that came in above expectations

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Tech rebound: Information technology stocks were among the biggest gainers of the week, as concerns about data privacy eased and the stocks recovered some of their recent losses. Tech’s comeback was reflected in the nearly 3% weekly gain for the NASDAQ, which is weighted more heavily in tech than other major indexes.

Volatility dissipates: Although stocks made some big daily moves during the latest week, investors’ expectations of near-term volatility decreased markedly, as measured by the Cboe Volatility Index. The VIX dropped about 17% from its close of the prior week to a level that was in line with its historical average.

Bank earnings: Some of the nation’s biggest banks reported first-quarter results in the kickoff to an earnings season that’s expected to be a strong one for the financials sector. Analysts expect the sector to report a 20% overall increase in earnings compared with last year’s first quarter, according to FactSet. That exceeds expectations of 17% earnings growth for companies across all sectors of the S&P 500.

Upcoming events: Thursday

The Conference Board Leading Economic Index for the U.S.

Other Notable Indices (YTD)

Russell 2000 (small caps) 2.14
EAFE International 0.50
EAFE Emerging Markets 0.50

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.