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Capital Market Thoughts On The Chaotic & Volatile Week For Stocks

|Includes: SPDR Dow Jones Industrial Average ETF (DIA), QQQ, SPY

Equity Market Update & Insights for the Week of March 23, 2018.

-March 23, 2018 Weekly Market Update. The equity markets took a dive on the heel of proposed Trump Administration actions that could spur trade wars (new round of $60 billion tariffs on China-based exports), Facebook data breach that rippled through other social media stocks due to new regulatory concerns, a revolving door of top WH official turnover and uncertainty over the Fed Reserve in managing a growth economy with rising rates. More specifically related to the Fed, there is uneasiness in the capital markets over whether the Fed will become hawkish and hit the economic breaks too many times with Fed hikes and how these rate actions may become an albatross on the current 2.7% GDP growth trajectory. With the equity markets yet to find ground after the early February correction, these negative developments rippled through the major U.S. stock indices with the S&P 500 -5.93% (NYSEARCA:SPY), Dow -3.68% (NYSEARCA:DIA) and Nasdaq (NASDAQ:QQQ) -6.54% for the week. We can't emphasize enough the benefits of a diverse multi-asset portfolio during these periods of market stress. For example, our client portfolio downside correlation to these events remain in the 0.40-0.60 range - and for those more recent clients in which we have had high cash balances due to elevated valuations - we have now been able to find favorable pricing entry points into high conviction, quality securities.