Weekly Economic Summary - 3/19/2018Submitted by Miller Financial Group, LLC on March 19th, 2018
U.S. stocks are down today in reaction to news regarding how Facebook Inc. manages user data. Currently, the tech heavy Nasdaq is getting hit the hardest with losses exceeding 2% while both the Dow and S&P500 are down nearly 1.50%. Markets also seem on edge early in the session as traders gear up for the Federal Reserve’s interest rate decision set to be announced on Wednesday. Last week, all three major U.S. indices finished with weekly losses over 1%.
Shares of Facebook are down over 7% this morning on news that the social-media giant allowed a firm to mine data of 50 million Facebook users without their permission as part of an alleged effort to possibly influence voters leading up to the 2016 election. Although there are concerns about how the data was used, the bigger issue for Facebook is the data breach.
The Federal Reserve is expected to raise interest rates at their policy setting meeting on Wednesday. Although the markets are expecting an increase in the fed funds rate by 25 basis points, investors will be paying close attention to the Fed’s guidance on their remaining rate increases in 2018. Any indication that the Fed may raise rates 4 times instead of 3 this year could add selling pressure to equities mid-week. Higher interest rates can make riskier assets like stocks less attractive.
In news around the world, European stocks are trending lower over concerns that the European Union could subject technology companies to a 3% tax on gross revenues. Japan’s Nikkei benchmark is leading the downtrend throughout Asia today as Prime Minister Shinzo Abe faces backlash over a land-sale scandal. Gold and Silver are both up today as investors seek safe haven options.
Have a great week!