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Weekly market wrap March 16, 2018: Markets subdued ahead of March 21 Fed rate announcement
7/23/2018 9:46:54 AM
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By Fund Library News Wire  | Friday, March 16, 2018


 

By Mike Keerma

The main North American stock indices remained subdued last week as investors digested cabinet shuffles in the Trump administration, rising global trade tensions, and expectations of a rate hike by the U.S. Federal Reserve next week. The S&P 500 Composite Index slipped 1.2% on the week, while the Nasdaq Composite Index edged down 1.0%. Canada’s benchmark S&P/TSX Composite Index, however, staged a 1.0% weekly advance as crude oil strengthened on Friday, boosting energy shares and helping support the S&P/TSX index. Gold remained flat, slipping a 0.7% on the week.

Markets remained nervous about U.S. President Donald Trump’s seeming revolving door cabinet shuffles, as Secretary of State Rex Tillerson was summarily shuffled out of his post via a Twitter-delivered pink slip, with CIA director Mike Pompeo nominated to replace him. Meanwhile, well-known economist and commentator Lawrence Kudlow accepted the position of director of the National Economic Council, making him one of President Trump’s key economic advisors.

A push by the Trump administration for tariffs on a wide variety of goods including steel and aluminum, directed mostly at China, raised some concern of global trade friction, but did not appear to be a main driver of market sentiment. Instead, traders focused more on the potential for increased hawkishness at the Fed, as the central bank is expected to become more aggressive in dealing with the combined impact of the Trump tax cuts and increased government spending in stimulating economic growth. Marking this turn, the University of Michigan’s consumer sentiment index in March rose to 102 in March from 99.7 in February, its highest level since 2004.

There were no surprising economic data releases during the week to set markets into a tizzy, so sentiment remained slightly negative, mainly on those political concerns and a consensus that the Fed under new Chairman Jerome Powell will embark on a series of at last three 25 basis-point rate hikes this year, beginning with its March 21 announcement.

Check Fund Library’s Market Activity page regularly for active updates on key market indexes and commodities.

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