Domestically, it was a fairly quiet week with rates remaining largely unchanged (i.e.10-year Treasury yields closed at 2.23%, just where they left off on April 13th).
The market did see a bit of economic data, most of which met the market’s expectations and did not create any jitters. Speeches from folks at the Federal Reserve were relatively light as well, with both Vice-Chairman Fischer and Governor Powell speaking on the economy – but not revealing anything new.
On Friday, President Trump executed an executive order to review all significant 2016 tax regulations and parts of the Dodd-Frank rules on Wall Street. He also signed three documents directed towards easing tax and regulatory burdens and announced his intention to reveal his fiscal strategy next week.
Geopolitical risks remained with the upcoming French presidential elections as uncertainty was further exacerbated by a deadly attack in Paris. The Euro was only slightly weakened by the end of the week, down 0.1%.
Over the week, crude oil dipped below $50 and gold edged higher.
Now that the holiday week is behind us, Wall Street is gearing up for a pretty busy week:
- We expect equity market volatility to be on the rise, given the slew of corporate earnings to be released this week. Corporations representing about 40% of the S&P 500 index’s value, or more than $7.7 trillion, will be disclosing earnings. No doubt, the market will keenly look to the overall performance as an indicator of future economic prospects.
- President Trump is expected, probably on Wednesday, to unveil his tax reform package that promises a massive tax cut for individuals and businesses.
- While there is a myriad of economic data to be released, market practitioners will pay particular close to attention to March New Home Sales, April PMI, Orders and Trade for Goods and Q1 2017 GDP data to be released.
- Finally, the first round of the much-anticipated French presidential elections is now over. Sunday’s results reflected that centrist Emmanuel Macron and far-right candidate Marine Le Pen prevailed. Final elections are to be held on May 7. On the back of the news, the Euro hit a 5 ½ month high against the USD, as Macron, who is supportive of the EU remaining in tact, led a marginal victory over Le Pen.
