2018-02-26 Market Commentary from MundaneAway, Inc. on Vimeo.
Markets spent most of the holiday shortened trading week in the red with glimpses of gains on Tuesday and Wednesday before a late day rally took the S&P 500 into positive territory for the week.
By Friday’s close, the Major Markets all ended higher, if ever so slightly, with the NASDAQ leading the pack with a 1.35% gain.
When we break apart the style boxes, we see that Value has continued to struggle compared to the Growth segments. Year to Date, the Small Cap and Mid Cap Value Indices continue the weakness that characterized much of 2017.
Wednesday saw the release of the Fed minutes at 2:00 PM ET. This sent the S&P 500 higher with a gain of 1.16% before the markets reversed course to end just off the lows of the day. However, the minutes were somewhat dated as they were from the January 30th meeting, just before the S&P dropped over 11%, and also before the unexpectedly strong 0.5 percent monthly gain in the consumer price index.
Volatility was clearly visible in the underlying S&P sectors as well. Telecom and Consumer Staples fell substantially while the rest of the sectors ended close to unchanged or significantly higher for the week.
As for interest rates, the 10-year Treasury closed at 2.94% on Wednesday before falling back to 2.88% at the close on Friday. This resulted in just a slight increase for the week. Meanwhile, short-term rates up-ticked as the 2-year yield reached 2.25%, a level not seen in nearly 10 years.
And in political news, House Democrats released their version of the FISA memo over the weekend written by Rep Adam Schiff (D-CA). One of the core components in the memo is that the FBI was made aware that former British Spy Christopher Steele had been paid to collect “information that could be used to discredit Candidate #1’s Campaign.”
In the end, the release only further muddies the water between the Republican and the Democrat squabble around the ongoing Mueller investigation.