Markets, Economy

Weekly Kickstart (03/05/2018-03/09/2018)

3/5/18 8:00 AM

/iStock-456509341.jpgStocks were under pressure last week, as the S&P 500 fell by 2.0 percent to 2,691.3. Most of the weakness was due to uncertainty about monetary policy and a potential trade war. As for performance during the month of February, the S&P 500 declined by 3.9 percent. That was the first monthly loss since March of last year, but the broad index still ended February 7.2 percent above the panic (intraday) lows seen earlier in the month, thereby highlighting just how significant the recent rebound in equities has been.


Participants in tax-advantaged 401(k) plans appear to have also weathered last month’s uptick in market volatility quite well, according to new data from the Employee Benefit Research Institute (EBRI). For example, workers ages 35-44 with 10-19 years of tenure saw their 401(k) balances decline by an average of just 2.7 percent in February. More importantly is that since the end of 2015, the average 401(k) account balance for this same group of workers jumped by 48.0 percent, while the S&P 500 rose by “only” 32.8 percent (through the end of February 2018). Such gains should provide further evidence of how effective consistent participation in a tax-advantaged savings vehicle can be when trying to amass a significant retirement nest egg. Additional assistance is available through the use of dollar-cost averaging and regularly consulting with a professional financial advisor. As always, we are here to help with any questions you may have.


To recap a few of the things we learned about the economy last week, the positives included that gauges of both national and regional manufacturing activity improved, housing inflation moderated, consumer confidence firmed, Americans’ incomes rose by more than expected, and first-time claims for unemployment benefits slid to a nearly 50-year low. As for the negatives, the trade deficit widened, new home sales fell, pending home sales declined, demand for U.S.-manufactured durable goods cooled, construction spending moderated, core capital expenditures decreased, household inflation pressures firmed, consumer spending growth slowed, and gross domestic product (GDP) during the fourth quarter of 2017 was revised lower. This week the pace of economic data picks up slightly, with a few important reports on services sector activity, consumers, and employment scheduled to be released, including the potentially market-moving February job report from the Bureau of Labor Statistics (BLS) due out on Friday.


**A more detailed snapshot of the U.S. economy can be found here.**

What To Watch:








Sources: Econoday, EBRI, FRBSL

Post author: Charles Couch