Category: Markets
Q2 2018: Economic Commentary
Global financial markets posted mixed results during the first quarter of 2018 amid a spike in volatility on concerns surrounding higher interest rates and rising inflation expectations. Meanwhile, the Trump Administrations tariff announcement on steel and aluminum led to heightened geopolitical tensions with several U.S. trading partners, sparking concerns of a trade war. We present a few highlights from 1Q18 below: U.S. equity markets sold off sharply in late January and early February, resulting in the first correction (10% drawdown) since early 2016. Stocks moved mostly higher for the remainder of the quarter in volatile and choppy trade, with large intra-day moves the norm. Despite the volatile environment, the SP 500, the Dow Jones Industrial Average and the technology-heavy Nasdaq Composite managed to hover near their all-time highs. On the economic front, preliminary estimates indicate fourth quarter GDP slowed slightly more than initially thought due to slower inventory growth.
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