Weekly Market Commentary

Last week was the most volatile of 2019 as markets endured the steepest 1-day drop of the year. It’s difficult to predict where the indices head from here, but there are “5 C’s” to watch: China, currencies, curves, consumers and confidence. The US-China trade conflict is still a headwind and will remain so for the foreseeable future with recent escalations including China being formally labeled a currency manipulator by the US treasury after the country’s central bank allowed the yuan to fall yet again. Curves (in reference to yield curves) saw the first inversion (when short term yields exceed longer term yields) in US treasuries since 2007 as volatility in the equity sectors pumped up bond prices and pushed down yields around the globe. Yet despite all this, the US consumer remains a resilient bright spot, encouraged by falling oil prices and a strong labor market. Ultimately, confidence remains strained but intact as investors hope for a positive signal and more clarity. While year-to-date gains remain strong, it does seem that there is some potential for challenging times ahead. 

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