Weekly Market Commentary January 29, 2018

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Global stock markets kept charging higher last week. The S&P 500 soared 2.2% and is now up 7.5% for the year. Global stocks climbed as the MSCI ACWI rose 2.1%. The Bloomberg BarCap Aggregate Bond Index slid a negligible amount last week and is down 0.9% for the year. The U.S. Department of Commerce announced GDP rose 2.6% in the fourth quarter.

Carson Group Research

Global stock markets have soared so far this year, while bonds have declined. With a few days left in January, the stock market is closing in on returns we would expect over a full year, not just the first month. Our conversations with investors, supported by statistical research, suggest investors have switched to focus on upside potential over volatility. With volatility at such low levels, who can blame them?

The rapid rise in stocks has confounded many predictions. While we believe markets will get more volatile, the sharp increases are reminders of the challenges of predicting short-term market performance. Please make sure you and your portfolio are prepared to weather downturns while staying invested in line with your goals and risk tolerance.

Source: Carson Group, Morningstar Direct

 Key points for the week

  • Global stocks remain in rally mode.
  • Avoid chasing performance or timing the market.
  • Trade policy poses a risk.

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.

US GDP slows in Q4

U.S. GDP growth unexpectedly slowed in the fourth quarter. The economy grew at a healthy 2.6%, but it failed to meet economists’ expectations of 3.0% growth. Rising imports was a drag on growth; however, data showed the economy is still strong.

LG to hike washing machine prices in response to US tariffs

We are concerned about the risk of protectionist policy measures on the market. The Trump administration’s decision to place tariffs on imported washing machines isn’t a major threat, but risks of a trade war are elevated from recent decades. The Trump administration’s focus on trade policy and willingness to engage in brinkmanship fuel our concerns.

Fun story of the week

Your next job interview could be playing a weird smartphone game

Some employers, such as Walmart and Siemens, are making interviewees play video games before their interviews start. They may seem nonsensical (one game makes players tap a button to inflate as many balloons as possible without popping them before a party), but these “games” or tests compose personality profiles of the interviewees and are said to improve diversity in the workplace. The games are created by U.K.-based Arctic Shores, so if you are really trying to nail that next interview, just download the company’s app and practice.

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