Markets, Economy

Weekly Kickstart (04/02/2018-04/06/2018)

4/2/18 8:00 AM

/iStock-462756183.jpgStocks rebounded last week, as the S&P 500 jumped by 2.03 percent to 2,640.87. Volatility, though, also rose, with equity valuations fluctuating violently due to continued geopolitical uncertainty and concerns about weakness in the important technology sector. Those wild swings in the market were exacerbated by quarter-end rebalancing and low trading volume ahead of the long weekend. On the bright side, most retail investors appear to be handling the recent roller coaster ride in the market quite well. At least that is what a new report from Gallup and Wells Fargo suggests after finding that 52 percent of surveyed U.S. adults said that they are “not too concerned” or “not at all concerned” about the recent uptick in volatility.


Six in ten respondents also reported that they believe now is a good time to invest in financial markets, and 49 percent said that they still have “quite a lot” or “a great deal” of confidence in the market as a place to save and invest for retirement. Moreover, 53 percent of surveyed adults said that they could tolerate a market correction of 10 percent or greater over the course of the year, and 71 percent reported being at least somewhat optimistic about reaching their 5-year investing goals. Buoying such confidence is an elevated level of optimism about the rest of U.S. economy, e.g. labor market conditions and income growth, along with favorable opinions of the recently passed tax package in Washington. Altogether, these findings encouragingly suggest that many retirement investors have been able to look past the recent swings in the market and focus more on their long-term financial well-being. Wells Fargo executive Joe Ready added that “Over the course of this bull market since the recession, there have been periods of volatility. But people seem to brush it off and stay the course, knowing it will help them in the long run in retirement. This type of investment discipline is an important part of an overall financial plan. However, now is a good time to step back and assess your current investment allocation and rebalance investments to make sure they align with your targeted risk strategy.”


To recap a few of the things we learned about the economy last (holiday-shortened) week, the positives included that mortgage and refinance applications rose, pending home sales rebounded, personal income for Americans lifted for the 8th month in a row, gross domestic product (GDP) growth during the fourth quarter of 2017 was revised higher, and first-time claims for unemployment benefits fell to a nearly half-century low. As for the negatives, the nation's trade deficit in goods widened, home prices rose at a faster rate, household inflation pressures firmed, manufacturing activity in the Southern and Mid-Atlantic regions of the country cooled, corporate profits fell sharply, personal spending growth slowed, and consumer confidence softened, albeit only slightly. This week the pace of economic data picks up, with several important reports on manufacturing, services sector activity, and employment scheduled to be released, including the potentially market-moving March job report from the Bureau of Labor Statistics due out on Friday.


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

What To Watch:








Sources: Econoday, Wells Fargo, Gallup, FRBSL

Post author: Charles Couch