April 7, 2017 Weekly Market Recap

The stock market saw limited movement during the past week, leaving the S&P 500 just below its closing level from last Friday. The benchmark index bounced around a 34-point range before locking in a modest weekly loss (-0.3%) while the Dow Jones Industrial Average outperformed.

Geopolitical developments were in focus from the jump. On Monday, President Donald Trump was quoted as saying he is ready to act alone on North Korea if China does not change the current situation on the Korean peninsula. The comments were made just days before Chinese President Xi Jinping’s visit to President Trump’s resort in Florida and ahead of a joint military exercise held by South Korea, the United States, and Japan.

The geopolitical conversation did not end there. On Friday morning, the U.S. Navy conducted an overnight strike against the Shayrat airbase in Syria, which was deemed responsible for a chemical attack that was reportedly conducted on Tuesday. The action was supported by several U.S. partners while Russia suspended its information sharing agreement with the U.S. that was put into effect when Russia launched an air campaign in Syria in 2015.

In addition to the geopolitical developments, a disappointing Employment Situation report was released. Only 98,000 non-farm payrolls were added in March, which was less than expected.

As for rate hike expectations, the fed funds futures market does not expect a rate hike to be announced in May (4.3%), but expectations for a June hike have firmed a little, with the corresponding probability rising to 70.6% from last week’s 62.5%.

Enjoy Your Weekend!

Source: Briefing Investor