Markets, Economy

Weekly Kickstart (04/24/2017-04/28/2017)

4/24/17 8:00 AM

/iStock-456509341.jpgStocks rebounded last week, with the S&P 500 rising by 0.85 percent to 2,348.69. That gain was a welcome turnaround following two consecutive weeks of declines, and it left the benchmark index up 4.91 percent year-to-date, and just 1.97 percent below the all-time closing high. Volatility, as measured by the CBOE’s VIX index, pulled back last week but the popular investor “fear gauge” still finished near the high-end of the post-November-election range. One factor likely keeping the VIX somewhat elevated was the uncertainty surrounding the French presidential election. Indeed, the first round of voting in France occurred on Sunday and many market participants might have reduced their risk (sold) during the past few trading sessions because of concerns that a surprise election outcome could result in a sharp selloff similar to what followed last year’s Brexit vote.


That kind of risk avoidance seemed especially prevalent on Friday but equities still managed to end the day well off of the lows thanks in part to a statement released by the White House, which said that President Trump will unveil a tax reform plan this week. While the announcement claimed that businesses and individuals are going to receive a “massive tax cut” under the reform package, a White House official on Sunday cautioned that the President is only going to be “outlining principles for tax reform.” Add to all of this Congress’s rapidly approaching budget deadline and it is clear that there will be lots of potentially market-moving headlines for traders to react to this week. For retirement investors, though, the focus should be less on the near-term fluctuations in stock valuations and more on the long-term goal of amassing significant wealth. Such efforts can be enhanced with the consistent use of tax-advantaged savings vehicles, 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 refinance applications increased, building permits rose, existing home sales improved, industrial production rebounded, and capacity utilization jumped. As for the negatives, mortgage applications fell, homebuilder confidence moderated, housing starts declined, factory output cooled, gauges of regional manufacturing activity continued to pull back from cycle highs, and the number of Americans making first-time claims for unemployment benefits lifted, albeit off of near-record lows. This week the pace of economic data picks up with several important reports on housing, manufacturing, inflation, employment costs, and consumers scheduled to be released, along with the first official estimate of U.S. gross domestic product (GDP) growth for the first quarter of 2017 due out this Friday.


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

What To Watch:








Sources: Econoday, Bloomberg, Yahoo! Finance, Twitter, AP, CNBC, FRBSL

Post author: Charles Couch