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March 4 – March 8 Week in Review

The markets took a tumble last week as investor concerns about global growth underpinned a risk off mindset. The S&P 500 lost 2.16%, the Dow Jones Industrial Average lost 2.21%, the Nasdaq Composite lost 2.46%, and the Russell 2000 lost 4.26%.

With few catalysts to justify further gains, and a confluence of discouraging data, news, and technical drivers, the market not surprisingly succumbed to some profit taking after its strong start this year.

Nine of the 11 S&P 500 sectors finished lower, led by the energy, health care, and industrial sectors. Conversely, the bond proxy real estate and utilities sectors were the lone groups to finish higher last week.

The leading talking points for the market centered on the belief that global growth is slowing and that the stock market got ahead of itself pricing in better economic prospects. Major developments reinforcing this belief included a surprisingly weak U.S. nonfarm payroll figure (which grew by just 20,000 jobs), the European Central Bank (ECB) issuing a surprisingly dovish minded policy outlook and 2019 GDP growth forecast cuts from the OECD, the ECB, and China, and lastly slight to moderate growth reports from 10 of the 12 Fed districts in the Fed's Beige Book for March.

Likewise, there were growing concerns last week about the prospects for a U.S.-China trade deal. U.S. Ambassador to China, Terry Branstad told The Wall Street Journal that a date has not yet been set for a summit because neither side feels an agreement is imminent. Separately, President Trump said if a China trade deal is "not a great deal," he will not make one, and that the U.S. will do well with or without a China trade deal.

The U.S. Treasury market benefitted from a flight to safety trade last week, which drove yields notably lower after making notable moves higher in the prior week. The 2 year yield dropped 11 basis points to 2.44%, and the 10 year yield dropped 13 basis points to 2.63%.

In other markets last week the U.S. Dollar Index rose 0.9% to 97.36 on the back of the ECB announcement. WTI crude lost 0.6% to $56.14 a barrel after downbeat comments about U.S.-China trade and weak February U.S. employment data stoked fears of slowing economic growth and slumping commodity demand. Despite last week’s decline easing oversupply fears have pushed up prices 23% this year, though they still remain 27% below the highs reached in October.

March 11 – March 15 Economic Calendar

  • Monday
  • Retail Sales
    8:30 AM ET
  • Business Inventories
    10:00 AM ET
  • Tuesday
  • NFIB Small Business Optimism Index
    6:00 AM ET
  • CPI
    8:30 AM ET
  • Redbook
    8:55 AM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Durable Goods Orders
    8:30 AM ET
  • PPI-FD
    8:30 AM ET
  • Atlanta Fed Business Inflation Expectations
    10:00 AM ET
  • Construction Spending
    10:00 AM ET
  • E-Commerce Retails Sales
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Thursday
  • Jobless Claims
    8:30 AM ET
  • Import and Export Prices
    8:30 AM ET
  • New Home Sales
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
    • Friday
    • Empire State Mfg Survey
      8:30 AM ET

       

       

    • Industrial Production
      9:15 AM ET
    • Consumer Sentiment
      10:00 AM ET
    • JOLTS
      10:00 AM ET
    • Baker-Hughes Rig Count
      1:00 PM ET

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This commentary is a matter of opinion and is for informational purposes only. It is not intended as investment advice and does not address or account for individual investor circumstances. Investment decisions should always be made based on the client's specific financial needs, goals and objectives, time horizon and risk tolerance. The statements contained herein are based solely upon the opinions of Telemus Capital, LLC. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.

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