TRADING WEEK ENDING May 12, 2017

The Week's U.S. Economic Calendar

Select Positive Data Reports

  • University of Michigan Sentiment
    • (97.7 versus survey of 97.0 and prior of 97.0)
  • Wholesale Inventories MoM
    • (+0.2% versus survey of -0.1% and prior of -0.1%)
  • Continuing Claims
    • (1918k versus survey of 1980k and prior of 1979k)
 

Select Negative Data Reports

  • Retail Sales ex Auto & Gas
    • (+0.3% versus survey of +0.4% and prior of +0.4%)

 

Market Comments

  • Large cap U.S. stocks (S&P 500) fell for the first time in four weeks by -0.3% on weak earnings results from major retailers. Small cap equities (Russell 2000) fared worse, declining -1.0% and now lag large caps YTD by over -5.0%.
  • Only two of eleven sectors were positive for the week as Information Technology and Energy had gains of +1.2% and +0.75, respectively. On the other hand, losses were concentrated among Materials (-1.6%), Real Estate (-1.3%) and Financials (-1.2%).
  • Developed international equities (MSCI EAFE) outpaced the U.S. gaining +0.3%, as gains from Japan overshadowed slight losses from Europe. Emerging market equities (MSCI EM) continued their strong pace this year gaining +2.5%.
  • Yield oriented equities generated mixed results as the aforementioned REITs were down, while MLPs rose +0.6% on the heels of a strong rebound in oil prices. The 10-Year Treasury rallied +0.1% as rates fell to 2.34% and high yield bonds gained +0.3%.

In The News

  • Emmanuel Macron was elected president of France on a platform to reform France’s heavily regulated economy and remain pro-European Union. The victory is seen as a rebuff to the rise of Populism that has swept through Europe and the United States. The political newcomer is the youngest president in French history at just 39 years of age.
  • President Donald Trump unexpectedly fired the active FBI Director James Comey citing his investigation into Hillary Clinton’s use of a private email server while Secretary of State under President Obama. The recommendation for firing came from Attorney General Jeff Sessions and newly confirmed Deputy Attorney General Rod Rosenstein and comes with curious timing given an ongoing investigation of Trump and possible ties to Russia.
  • The CBOE Volatility Index (VIX), which measures investor anxiety or fear, dropped to its lowest level since 1993 as investor comfort in strong domestic corporate earnings and the job market is overshadowing concerns about a market selloff.

Performance Data as of May 12, 2017

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General Performance Information
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Index Disclosure
The returns and volatility of the indices displayed may be materially different than the client’s account, and a client’s holdings may differ significantly from the securities that comprise the indices. The indices are disclosed to allow for comparisons to well-known and widely recognized indices, and may or may not be appropriate for performance comparisons. An investor cannot invest directly in the index.