Market Pulse: March Economic Highlights

Market Pulse: March Economic Highlights

Group News posted in on 3 April 2018| comments
audience: The Boston Foundation | last updated: 3 April 2018
Print
||
Rate:

What’s happening: Highlights from the NP Investment Team

The head of the WTO has stated that a full-fledged trade war between China and the U.S. would have a “severe impact on the global economy.” What is driving the U.S. to make these changes to trade policies and how much authority does the President have to implement these changes?

President Trump believes a trade deficit is equivalent to theft and the U.S. deficit with China has ballooned to $337bln in recent years. The President considers winning a trade war to be easy and has broad authority to implement changes unilaterally. The recently proposed tariffs on $60bln worth of Chinese goods announced last week is not material enough to derail the global economy. However, should China retaliate and a full-scale trade war follows, there will be more losers than winners.

Leaders and Laggards:  What’s Up and Down in the U.S. Stock Market?
 

Economic Sectors

March 2018 
through 3/28/2018

Year-to-date 
2018 (through 3/28/18)

Utilities 

2.87%

-4.7%

Energy

-0.59%

-8.6%

Telecommunications 

-1.12%

-8.7%

Consumer Staples

-1.97%

-8.4%

S&P 500

-4.01%

-2.6%

Technology

-5.99%

1.0%

Materials

-6.21%

-7.7%


Risk-off (“defensive”) sectors, including Utilities, Telecommunications and Consumer Staples, have outperformed the overall market for the month of March. Many of the companies/stocks in these sectors are domestically focused (revenues and earnings) and, therefore, relatively insulated from potential trade/tariff issues. At the same time, these companies will likely benefit more from the domestic fiscal stimulus (tax cuts and budget deal) than multi-national companies. As the stock market stalls, bond investments and their proxies (Utilities, Telco and Staples) offer a relative safe haven compared to more cyclical parts of the market.

Conversely, economically sensitive and global companies have struggled as the fear of a trade war becomes reality. The global synchronized growth narrative that has driven recent sector leaders like Technology, Materials and Industrials to highs is at risk of reversing given recent tariff rhetoric. Headline risk, along with macro (trade) risk has also driven Technology stocks lower as regulatory concerns (Facebook, etc.) mount.

Click here for more information about NP’s investment capabilities.

Add comment

Login or register to post comments

Comments

Contact

The Boston Foundation
75 Arlington Street 10th Floor
Boston, MA 02116
United States
Phone: 1 617-338-1700
Fax: 1 617-338-1605

Follow

RSS

This group offers an RSS feed.
 
7520 Rates: April 3.2% March 3.0% February 2.8%

Already a member?

Learn, Share, Gain Insight, Connect, Advance

Join Today For Free!

Join the PGDC community and…

  • Learn through thousands of pages of content, newsletters and forums
  • Share by commenting on and rating content, answering questions in the forums, and writing
  • Gain insight into other disciplines in the field
  • Connect – Interact – Grow
  • Opt-in to Include your profile in our searchable national directory. By default, your identity is protected

…Market yourself to a growing industry