Investment Commentary –March 20th, 2018

Year to Date Market Indices as of Market Close March 20th, 2018
Dow 24,727 (0.03%)
S&P 2,716 (1.62%)
NASDAQ 7,364 (6.68%)
Gold $1,310 (0.06%)
OIL $63.42 (5.52%)
US 10Y Treasury 2.895 (8.51%)
Barclay Bond Aggregate (-1.98%)

Stock market rebounds from tech selloff as energy sector aids advance

U.S. stocks ended higher Tuesday, led by strong gains in the energy sector as the overall market reclaimed some lost ground from the previous day, when tech shares fell sharply.

Market participants also were anticipating the Federal Reserve’s two-day policy meeting, which started in the early afternoon. Investors are watching for signs that the central bank will take a more aggressive path toward normalizing monetary policy.

What did the main benchmarks do?

The Dow Jones Industrial Average DJIA, +0.47% advanced 119 points, or 0.5%, to 24,730, with shares of components Boeing Co. BA, +0.04% and Nike Inc. NKE, +1.66% helping to lift the blue-chip gauge.

The Nasdaq Composite Index COMP, +0.27% was up 20 points, or 0.3%, to 7,364. The S&P 500 index SPX, +0.15% picked up 4 points, or 0.2%, to 2,717, with the energy sector, up 1.1%, buoying the broad-market index. After the modest rebound, the tech-heavy Nasdaq is still up by 6.7% for the year, with the S&P 500 lagging behind at a 1.6% gain.

Tuesday’s action comes a day after a tech selloff weighed on the overall stock market, with the Dow falling 335.60 points, or 1.4%, to 24,610.91 on Monday, and turning negative for the year. The S&P 500 index SPX, +0.15% dropped 1.4% to 2,712.92, while the tech-laden Nasdaq slumped 1.8% to 7,344.24, for its biggest one-day percentage decline since early February.

Fed ahead

Jerome Powell, who replaced Janet Yellen last month as chair of the U.S. Federal Reserve, will oversee his first Fed policy meeting starting Tuesday, and he’ll hold a press conference after the meeting concludes on Wednesday. It’s widely expected that the Fed will lift short-term interest rates.

Retail slump

A slowdown in retail sales is one of the factors that has weighed on inflation recently. Sales slipped 0.1% in February, marking a three-month string of declines. The recent slump was attributed in part to lower sales of automobiles and weak gasoline prices.

Meandering market

After alternating between losses and gains the previous two weeks, the major indexes fell around 1%. As in recent weeks, concerns about rising trade tensions weighed on shares of materials and industrials stocks and other sectors that trade goods and services overseas.

Upcoming events:

Wednesday: U.S. Federal Reserve Board concludes two-day policy meeting, Chairman Jerome Powell holds press conference

Other Notable Indices (YTD)

Russell 2000 (small caps) 2.52
EAFE International -0.58
EAFE Emerging Markets 3.90
Shiller Cape Annuity Index 4.93

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.;ticker=BXIICSTU;tab=performance