Market Commentary for the Week: 13 (26- 29 March 2018)

This holiday-shortened week saw global equities claw back some of the losses incurred earlier, when fears escalated of a trade war between the United States and China. News of weekend talks between the U.S. and China, before Monday’s market opening, as well as progress on a trade deal between the U.S. and South Korea, initially prompted a solid rebound from the previous week’s drop. But stocks dove again Tuesday after reports that the Trump administration was looking at blocking China from investing in certain types of U.S. technology companies. A renewed advance Thursday cemented a positive finish for the week.

Stocks rose by more than 2%, the S&P 500 moved by more than 1.5% on three of the four trading days. Investor sentiment continues to swing between optimism and pessimism as new information regarding global trade, monetary policy, and the technology sector is released. Worries about the safety of self-driving cars (Nvidia, Tesla), controversy over the use of customer data (Facebook, Twitter), worries about antitrust or other regulatory action (Amazon), contributed to volatility in technology-related shares throughout the week.

U.S. stocks closed sharply higher Thursday, with major indexes climbing 1% in a broad rally that had nearly every sector participate in the gains and post strong weekly advances. For the week, the Dow rose 2.7%, while the S&P added 2.1% and the Nasdaq was up 1%.

 

 

On Thursday the Dow Jones Industrial Average rose 1.2%, to 24,143.

The S&P 500 rose 1.4%. The day’s gains were broad-based, with 10 of the 11 primary S&P 500 sectors closing higher on the day. The biggest gainer was tech, up 2.2%. Beyond tech, markets were also supported by a 2.2% rise in energy stocks. Topping the sector performance charts were the “bond proxy” groups – telecom, real estate, staples, utilities. Materials, industrials, and financials also saw gains of at least 1% on the day.

 

 

The Nasdaq Composite Index rose 1.6%, to 7,063.

 

 

Oil prices were slightly higher, on the New York Mercantile Exchange, May WTI crude added 0.9%, to settle at $64.94 a barrel. The contract was down 1.4% for the week. Geopolitical concerns and indications from the OPEC that members are considering action that could trigger higher prices, limited moves for oil.

 

 

Gold futures settled lower on Thursday, posting a decline for the week. June gold the most-active contract, fell 0.2%, to settle at $1,327.30 an ounce. The contract edged down by 2.1% for the week.

 

 

Major cryptocurrencies took another leg lower overnight on Thursday as the selling persisted. The overnight fall took the total value of all cryptocurrencies toward $250 billion, and at one point that total value shed $20 billion in six hours.

The price of a single bitcoin traded to an overnight low of $6,617.69, down 21% on the week. On Wednesday bitcoin futures had a quiet day. The Cboe Global Markets April contract finished unchanged at $7,890 and the CME’s March contract closed at $7,875, down 0.3%.

 

 

Other digital currencies have recovered some of the overnight losses on Thursday. Ether remains under $400, trading at $381.19, down 28% on the week.