Weekly Economic Summary - 4/16/2018Submitted by Miller Financial Group, LLC on April 16th, 2018
US stocks staged a bit of a comeback last week with advances coming across all three major benchmarks. The Dow Jones Industrial Average climbed 1.8%, the S&P500 gained 2.0% and the Nasdaq rallied 2.8% on the week bringing the tech-heavy index into the green for the year. It was the sixth consecutive week that the S&P500 logged at least a 1% weekly advance/decline, proving the moves this year have been volatile.
Easing trade tensions between the US and China provided the backdrop for a brighter market last week. Chinese President Xi Jinping announced last week that he was committed to providing broader and easier access to the Chinese markets for businesses and investors. President Trump also cooled off on some of his stances on trade issues last week, providing a relief that an all-out trade war between China and the US may be avoided.
Despite trade tensions cooling, geopolitical risk ramped up in the Middle East last Tuesday after President Trump threatened missile attacks on Syria in response to the alleged chemical attacks from the Syrian government that killed roughly 70 people the prior weekend. On Saturday, the US along with its European allies – Britain and France, launched airstrikes against Syrian research and storage facilities destroying much of Syria’s chemical weapons capabilities according to US officials.
Geopolitical risk, especially in the Middle East region, remains very high, however markets on Monday seem to have taken the targeted attacks on Syria in stride. Investor attention seems to be turning now to the beginning of earnings season, which unofficially kicked off last week. Some big names are set to report this week including Netflix, General Electric and Bank of America which reported early Monday morning. Expectations are high going into earnings season, with forecasts for 17.3% earnings growth for the S&P500.
Have a great week!