Weekly Market Commentary April 24, 2017

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In the thick of earnings season, markets swayed with a flurry of mixed reports from banks and industrials. For the week, the S&P 500 climbed 0.9%. The MSCI All Country World Index (ACWI), which includes U.S. and international stock markets, rose 0.6%, and the Bloomberg U.S. Aggregate Bond Index was unchanged. After a recent rally, oil fell sharply, dropping 7% last week.

Economic and policy news was generally positive. The International Monetary Fund (IMF) raised its forecast for global growth to 3.5%, which would be the fastest growth rate in the last five years. Also, comments from Treasury Secretary Mnuchin that tax reform will be passed by the end of the year ignited hopes of improved future growth.

On the other side of the Atlantic, politics continued to be the main driver for the markets. French voters advanced centrist Macron and populist Le Pen to the second round. Earlier last week, British Prime Minister May called for a general election on June 8 in hopes of garnering a larger majority to better execute her plans for Brexit.


What are we reading?

Below are some areas of the market we paid particularly close attention to this week. For further information, we encourage our readers to follow the links:

IMF Boosts Global Growth Forecast to 3.5% Despite Geopolitical Angst

The IMF edged its world growth forecast up a tenth of percentage point to 3.5%. Growth in cross-border trade is projected to grow to 3.8% and inflation is expected to be 2.0%. The trade and inflation data are roughly twice last year’s levels and indicate the global economy continues to heal.

U.K. Snap Election – Can We Hope For A Softer Brexit Now?

Members of Parliament overwhelmingly backed Prime Minister May’s plan for a general election on June 8. PM May is hoping to gain majority to ward off opposition parties that have been trying to thwart her efforts to leave the E.U.

U.S. tax reform coming soon, Treasury Sec. Mnuchin says

Treasury secretary Mnuchin reiterated that they are developing a sweeping plan to overhaul both corporate and individual taxes. Tax reform is seen as a potential source of increased economic growth through higher spending and increased rates of investment.

French Presidential Runoff Heralds New Political Era

Emmanuel Macron and Marine Le Pen moved on to the second round of the French presidential election. Macron, a centrist candidate who supports the European Union (EU), is expected to defeat the anti-EU Le Pen.


Fun Story of the Week

Back in the 1970’s and 80’s, going to an arcade was a luxury for any kid who was lucky enough to try his/her luck at legendary games like Galaga, Pac Man and Dig Dug. While many of the games that were popular have now become irrelevant, the often-overlooked pastime of pinball is still alive and thriving.

After falling out of favor during the latter half of the 20th century, pinball machines have become a collector’s item in a niche group. To comment on the immense fan dedication to pinball, Nate Shivers of the Coast 2 Coast Pinball podcast stated that, “The game makes grown men do crazy things.” In 2011, pinball legend John Popadiuk decided to build a limited run of his “mythological” machines, costing each of the twenty funders $16,000. Some consumers seem more than willing to write a blank check to relive key elements of their childhood.


 

 

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