Investment Commentary –April 3rd, 2018

Year to Date Market Indices as of Market Close April 3rd, 2018
Dow 24,030 (-2.78%)
S&P 2,614 (-2.21%)
NASDAQ 6,941 (0.55%)
Gold $1,335 (1.54%)
OIL $63.56 (5.99%)
US 10Y Treasury 2.77 (37.46%)
Barclay Bond Aggregate (-2.57%)

Stocks rebound after huge tech-driven selloff

U.S. stocks moved between slight losses and solid gains Tuesday as uncertainty over trade issues and the outlook for the technology and internet sectors continued to be the primary driver for volatile equities, particularly in the absence of fundamental news like earnings.

The gain represented a partial rebound from the previous session’s sharp decline, which took the S&P 500 below a key technical level and erased the NASDAQ’s gains for the year. The S&P returned above that level on Tuesday, while the NASDAQ held at breakeven levels for 2018.

Volatility is expected to remain elevated as investors grapple with a number of key questions. President Donald Trump remained a particular focus for the equity market, with investors wary of any trade actions he might announce—particularly after China retaliated to U.S. tariffs with protectionist measures of its own—as well as his feud with Amazon, which he has repeatedly criticized over Twitter in the past week. The technology sector, which led the market’s decline on Monday, will also remain at the forefront of Wall Street’s attention.

Around the Web:

Quarterly loss: The S&P 500 and the Dow finished the first quarter in negative territory, snapping a string of nine positive quarters in a row for the two indexes. The S&P fell nearly 1% and the Dow lost nearly 2%. The NASDAQ, however, was up nearly 3%.

Economic boost: The government’s latest GDP estimate pegged economic growth at an annual rate of 2.9% in the fourth quarter, up from an earlier figure of 2.5%, due largely to higher-than-expected consumer spending. The growth rate slowed somewhat compared with the third quarter, when the figure was 3.2%.

Small-cap endurance: Stocks of smaller companies have fared relatively well amid the recent volatility, in part because most smaller firms are more domestically focused than bigger companies and less exposed to global trade tensions. A small-cap index, the Russell 2000, posted a 1.1% gain for March, compared with a 2.7% decline for the S&P 500, a large-cap index.

Upcoming events:

Friday: Monthly jobs and unemployment, U.S. Bureau of Labor Statistics

Other Notable Indices (YTD)

Russell 2000 (small caps) -1.52
EAFE International -1.55
EAFE Emerging Markets -1.09

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.