Continued concerns over the risk of a trade war pushed markets lower, and a slowing economy pushed stocks lower. The S&P 500 fell 1.4% last week. The global MSCI ACWI dropped 0.7%, and the Bloomberg BarCap Aggregate Bond Index dipped 0.1%.
The declines reflect investors’ concerns the back and forth between the U.S. and China could reduce global trade and economic growth, pushing corporate profits lower. Global economic reports, including the U.S. jobs number discussed below, are generally missing expectations. Our view is concerns over trade and economic decline are both overdone. As previous updates have mentioned, we expect a very public negotiation on trade and steady, but not spectacular, economic growth. This week’s events affirmed our basic outlook.
Key points for the week
- Stocks fell as protectionist concerns increased.
- Economic data remains solid but has dipped below heightened expectations.
- The U.S. economy produced 103,000 jobs, falling short of expectations.
The U.S. jobs report for March was released on Friday, displaying somewhat disappointing figures. Though the numbers were below what many analysts predicted, they still showed signs of a healthy economy. Analysts forecasted job growth around 185,000 jobs, but only 103,000 jobs were created and unemployment stayed at 4.1% for the sixth consecutive month. The metric most concerning for investors has been wage growth due to the threat of increased inflation. The report showed year-over-year wage growth at 2.7%, a modest number given the consistent levels of unemployment and average job growth of 200,000 per month.
Fun story of the week
A touching moment happened during the annual Par-3 contest, which takes place a day before the Master’s Tournament begins. Pro golfers often bring family onto the course to hit a shot or two on the final hole, and Jack Nicklaus’s grandson hit a hole-in-one. A celebration ensued that brought Nicklaus to tears — a proud moment for the grandfather and golf legend.
This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
S&P 500 INDEX
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
MSCI ACWI INDEX
The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 23 emerging markets (EM) countries*. With 2,480 constituents, the index covers approximately 85% of the global investable equity opportunity set.
Bloomberg U.S. Aggregate Bond Index
The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.