Domestic stocks posted losses on Friday, April 21st, largely due to investor concerns about the French election.[1] 

Despite these daily losses, U.S. indexes broke their two-week losing streak, with the S&P 500 adding 0.85%, the Dow gaining 0.46%, and the NASDAQ increasing 1.82%. International stocks in the MSCI EAFE grew by 0.18%.[2] 

What Did We Learn Last Week?

The French Election Is Concerning Investors

Uncertainty surrounding France's presidential election contributed to investor caution last week.[3] After Sunday's ballot, National Front candidate Marine Le Pen will advance to the second round of voting on May 7th, which decides the new president.[4] Le Pen has promised to remove France from the European Union if she wins, a choice that could affect markets and currencies.[5] 

Quarterly Earnings Reports Are Mostly Strong

By Friday morning, 95 companies in the S&P 500 had reported their quarterly earnings; 77% of them beat earnings-per-share estimates.[6] 

Existing Home Sales Jumped 4.4% in March

Sales of existing homes hit levels not seen since 2007, and median home prices are up 6.8% over a year ago.[7] Supply levels remain tight, and demand is high, as 48% of homes sold last month were on the market for less than a month.[8] 

Housing Starts Declined 6.8% in March

While the headline number for housing starts may seem pretty disappointing, it largely reflects the results of a return to typical March weather after unseasonably mild weather boosted starts in January and February.[9] Overall, housing starts are up 9.2% over this time last year.[10] 

The Consumer Price Index Missed Expectations

Declines in gas and other energy prices contributed to the U.S. Consumer Price Index (CPI) falling 0.3% in March, its first monthly decline in more than a year.[11] 

 

Tax-Plan Information May Be on the Horizon

On April 20, Treasury Secretary Steve Mnuchin indicated that tax reform remains important. The next day, President Trump said a tax plan should be coming this week.[12] 

Oil Prices Dropped

Crude oil prices fell below $50 a barrel after losing 2.15% on Friday.[13] Investors are showing concern about whether output decreases by OPEC can balance out against increasing U.S. production and prevent oversupply.[14] 

What's Ahead

Moving into the last week of April, we will learn both first quarter GDP readings and gain further insight into consumer confidence and housing performance. On Friday, April 28th, initial readings for first quarter GDP will help deepen our understanding of where the economy stands right now. Consensus estimates are at a soft 1.1% growth, even lower than last quarter's 2.1% increase.[15] After seeing this week's low CPI numbers, combined with retail and inventory data, Barclays decreased its GDP estimate to only 0.8%.[16] 

Last week provided a variety of data and perspectives that are continuing to reveal themselves. As momentum from the French presidential outcomes and our own economic growth unfolds, we will watch these developments closely. Meanwhile, we encourage you to continue a long-term focus on your goals, and we are here to discuss any questions you may have along the way.

ECONOMIC CALENDAR

  • Tuesday: S&P CoreLogic Case-Shiller HPI, New Home Sales, Consumer Confidence
  • Wednesday: EIA Petroleum Status Report
  • Thursday: Durable Goods Orders, International Trade in Goods, Pending Home Sales Index
  • Friday: GDP, Employment Cost Index, Consumer Sentiment

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International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies. 

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia and Southeast Asia. 

The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.

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In accordance with its Statute, the mission of the Organization of the Petroleum Exporting Countries (OPEC) is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.

Consumer Price Index (CPI) measures prices of a fixed basket of goods bought by a typical consumer, widely used as a cost-of-living benchmark, and uses January 1982 as the base year.

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[1] http://www.cnbc.com/2017/04/21/us-markets.html 

[2] http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX®ion=usa&culture=en-US

http://performance.morningstar.com/Performance/index-c/performance-return.action?t=!DJI®ion=usa&culture=en-US

http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
https://www.msci.com/end-of-day-data-search

[3] https://www.bloomberg.com/news/articles/2017-04-20/asian-stocks-set-to-gain-as-yen-weakens-on-kuroda-markets-wrap 

[4] http://www.marketwatch.com/story/the-market-is-going-bonkers-over-frances-election-result-heres-how-in-5-wild-charts-2017-04-24

[5]  http://www.cnbc.com/2017/04/21/us-markets.html 

[6] http://www.cnbc.com/2017/04/21/us-markets.html 

http://business.nasdaq.com/marketinsite/2017/MID-April/MID-Special-Update-First-Quarter-2017-Review-Look-Ahead.html 

[7] http://www.ftportfolios.com/Commentary/EconomicResearch/2017/4/21/existing-home-sales-increased-4.4percent-in-march

[8] http://www.ftportfolios.com/Commentary/EconomicResearch/2017/4/21/existing-home-sales-increased-4.4percent-in-march 

[9] http://www.ftportfolios.com/Commentary/EconomicResearch/2017/4/18/housing-starts-declined-6.8percent-in-march 

[10] http://www.ftportfolios.com/Commentary/EconomicResearch/2017/4/18/housing-starts-declined-6.8percent-in-march 

[11] http://www.cnbc.com/2017/04/14/us-consumer-price-index-march-2017.html

[12] https://www.bloomberg.com/news/articles/2017-04-20/asian-stocks-set-to-gain-as-yen-weakens-on-kuroda-markets-wrap 

[13] http://www.cnbc.com/2017/04/21/us-markets.html

[14] https://www.bloomberg.com/news/articles/2017-04-20/asian-stocks-set-to-gain-as-yen-weakens-on-kuroda-markets-wrap

[15] http://wsj-us.econoday.com/byshoweventfull.asp?fid=477650&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top 

[16] http://www.cnbc.com/2017/04/14/us-consumer-price-index-march-2017.html