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IN-THE-MARKETS

In the Markets – Week-Ending March 10th

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending March 10th
Crystal Brook Advisors
We Make Financial Planning Crystal Clear

United States: The U.S. economy added a robust 235,000 jobs in February, the Labor Department said Friday. (1)  The unemployment rate ticked down to 4.7% from 4.8% in the previous month. It’s a vast improvement from 2009, when unemployment peaked at 10% after the financial crisis. (1)  Last year, the economy averaged about 190,000 new jobs per month. The economy is showing other signs of strength: Consumer and business confidence is high, and stocks are at record levels. (1)  In February, manufacturing added 28,000 jobs. Trump has promised to increase manufacturing jobs by getting better trade deals for the United States. Construction companies hired another 58,000 workers last month. Experts say that increase is mainly due to warm winter weather in the Northeast and Midwest. (1)

Europe: European shares are lagging behind the global equity rally despite recovering regional growth and corporate profits, highlighting international anxiety over the continent’s fractious politics. (2)  Last year, the eurozone economy kept pace with the U.S. for the first time since 2008, while the region’s companies outperformed in the last earnings season. European shares are far cheaper on many valuation measures than those in the U.S. (2)  Yet the Euro Stoxx 50, the eurozone’s blue chip index, is up 2.7% in dollar terms this year, compared with a roughly 6.3% increase for the Dow Jones Industrial Average and 6% for MSCI’s gauge of world stocks. (2)

Asia: China’s rapid economic growth has had an unprecedented impact on the country and the world. After lifting more than 700 million people out of poverty, the government is on track to meet or exceed its target of eliminating poverty by 2020. China became the world’s second largest economy, becoming the world’s biggest source of tourists (120 million) and foreign students (one million) and buyer of natural resources (40% of iron ore, copper, energy resources). The growing middle class became the largest buyer of Western and Japanese luxury products. More important, relevant 2016 statistics indicate the economy will likely meet the government’s annual target growth rate of about 6.5% this year and beyond. The Purchasing Managers’ Index rose last year above 50, 13 million jobs were created and 12 million more people were lifted out of poverty. (3)

Latin America:  ‘So far from God…but so close to Trump,’ is the cry of the Mexicans these days to their patron saint, Virgin of Guadalupe, affronted by US President Donald Trump‘s racist comments and accusation of Mexican immigrants being “criminals,” “rapists” and “drug dealers”. They also feel insulted by Trump’s demand that Mexico pay for the wall his administration plans to build on the US-Mexico border. Not since the US-Mexico war in the 19th century and the annexation of Mexican territories have the Mexicans been as outraged with the US. Trump has called NAFTA the “worst trade deal in human history” and has suggested imposing tariffs on imports from Mexico, which depends on the US for 81% of exports and close to 50% of its imports; in 2016, Mexico’s exports to the US were $294 billion and imports and $231 billion. Traumatized by Trump, Mexico has started perusing a diversification in its trade partnerships, focusing on large markets like India. (4)

Monday 3/6
  • Shares of Snap Inc. SNAP, -2.91% fell 7% in volatile morning trade Monday, following another bearish initiation on Wall Street from an analyst who thinks the stock is overvalued. Needham analyst Laura Martin initiated coverage on the stock with an under performing rating, which is the equivalent to sell, and a fair value price target range of $19 to $23 a share, indicating declines from recent trading prices. (5)
Tuesday 3/7
  • The S&P 500 dropped 0.3% to 2,368.38 today, while the Dow Jones Industrial Average dipped 29.58 points, or 0.1%, to 20,924.76. The Nasdaq Composite fell 0.3% to 5,833.93. The S&P 500 is still just 1.4% off its all-time high. (6)
Wednesday 3/8
  • The  Dow Jones Industrial Average (DJIA) and S&P 500 Index ( SPX )  sank for the third straight day, with energy stocks helping lead the way lower on a dismal day for oil. Specifically, crude futures took their largest percentage loss in 13 months, after a ninth straight build in domestic oil inventories. Meanwhile, traders digested extremely strong private  payrolls  data ahead of Friday’s key jobs report, suggesting a Fed rate hike is increasingly likely. (7)
Thursday 3/9
  • The best performers of the session on the Dow Jones Industrial Average were Johnson & Johnson (NYSE:JNJ), which rose 1.54% or 1.92 points to trade at 126.02 at the close. Meanwhile, Intel Corporation (NASDAQ:INTC) added 0.66% or 0.23 points to end at 35.85 and The Travelers Companies Inc (NYSE:TRV) was up 0.60% or 0.73 points to 121.97 in late trade. (8)
Friday 3/10
  • The S&P 500 index SPX, +0.34%  gained 0.4 points to 2,365, as the financials, real-estate and energy sectors weighed upon advanced in the industrial, utilities and telecom sectors. (5)

Market Close

  • The Dow Jones Industrial Average DJIA, +0.22% declined 6 points to 20,852, with 18 of the 30 blue-chip companies trading higher. General Electric Co. GE, +2.10%  and UnitedHealth Group Inc. UNH, +1.14% led gainers, while Boeing Co. BA, -1.03%  and Goldman Sachs Group Inc. GS, -0.69%  led decliners.  (5)

Contributor: Thomas Padula

Sources:  (1), CNN Money (2), Wall Street Journal (3), Asia Times (4), The Wire (5), Market Watch (6), Barron’s (7), NASDAQ (8), Investing.com