Investment Commentary –May 15th, 2018

Year to Date Market Indices as of Market Close May 15th, 2018
Dow 24,706 (-0.05%)
S&P 2,711 (1.42%)
NASDAQ 7,351 (6.49%)
Gold $1,292 (-1.70%)
OIL $71.61 (19.09%)
US 10Y Treasury 3.071 (66.04%)
Barclay Bond Aggregate (-2.34%)
Fed Funds Rate 1.75

Dow breaks 8-day winning streak

U.S. equity markets closed solidly lower on Tuesday with the Dow industrials halting their eight-day advance. The selling on Wall Street was accompanied by a rise in bond yields, with the 10-year Treasury yield topping 3.07%. The Dow Jones Industrial Average DJIA, -0.78% lost 193.07 points, or 0.8%, to 24,706.34, putting an end to a 8-day rally, the longest since last September. The S&P 500 index SPX, -0.68% fell 18.69 points, or 0.7% to 2,711.44. Meanwhile the Nasdaq Composite COMP, -0.81% declined 59.69 points, or 0.8% to 7,351.63. Among the worst performers on the S&P 500, Agilent Technologies A, -9.70% shares dropped nearly 10% after the maker of medical instruments and other equipment posted quarterly earnings that matched forecasts late Monday.

Around the Web:

Oil recovery: U.S. crude oil prices rose for the second week in a row, climbing above $71 a barrel to the highest level since November 2014. One catalyst was President Trump’s announcement on Tuesday that the U.S. will pull out of a 2015 agreement limiting Iran’s nuclear activities; Iran is a major oil producer.

Modest inflation: A government report showed that the recent acceleration in inflation may be moderating. Core prices—which exclude typically volatile food and energy costs—rose just 0.1% in April from the prior month, less than most economists had expected.

Finding traction: After alternating between small gains and losses over the preceding six weeks, U.S. stocks finally managed to sustain positive momentum as quarterly earnings season began to wind down. The major indexes returned around 2.5% for the week, and the Dow joined the S&P 500 and the NASDAQ in positive territory year to date.

Upcoming events:

Other Notable Indices (YTD)
Russell 2000 (small caps) 4.22
EAFE International 2.16
EAFE Emerging Markets 2.36
Shiller Annuity Index 5.28

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.