2018-03-19 Market Commentary from MundaneAway, Inc. on Vimeo.
The back and forth continued this week as the markets largely ended lower. In somewhat of a turn of events, Real Estate and Utilities were the only sectors than closed higher after being two of the weakest sectors year to date.
Each day closed progressively lower last week until the Quadruple Witching on Friday. Quadruple Witching refers to an expiration date that includes stock index futures, stock index options, stock options and single stock futures. This event occurs on the third Friday of the third month of each quarter. Volume spiked as a result of this event as it approached the highs of the year seen in early February.
In the end, the S&P 500 gave back about a third of last week’s gains.
Headlines flowed from Washington D.C. again last week. On Tuesday, President Trump replaced Rex Tillerson with Mike Pompeo as Secretary of State via a Tweet at 7:44 AM Eastern Time. It was reported that Mr. Tillerson was not given any definite notice of his firing ahead of time beyond the chief of staff telling him that “you may get a tweet.”
The firing continued later in the week when FBI Deputy Director Andrew McCabe was fired ahead of his 50th birthday and full eligibility of retirement benefits. In a bit of a surprise to many, Representative Adam Schiff, who recently released his counter memo regarding the ongoing Mueller investigation, appeared on ABC New’s “This Week” and didn’t completely discredit the firing saying, "There's no way for us to know at this point, but even though it may have been justified, it can also be tainted."
As for economic news, Friday’s JOLT report showed a record high of 6.3 million seasonally adjusted job openings in January of this year. According to February’s Employment Situation report, there are only 6.7 million unemployed in the country. This means that there is barely more than one unemployed person for every job opening in the country.
Friday held the release of the University of Michigan Consumer Sentiment Index. March’s reading of 102, up from 99.7 in February, marks the highest reading in 14 years.
Despite recent positive economic news, Toys R Us, A mainstay of retail shopping for kids, announced in a court filing on Thursday that they would be liquidating 735 stores. This move would mean the end of 33,000 jobs and the close of a beloved 70-year old business.
Friday, also marked the 10-year anniversary of the collapse of Bear Stearns. On March 16th, 2008, Bear Steans signed a merger agreement orchestrated by the Federal Reserve Bank of New York to sell the company to JPMorgan for $2 a share.
To many, this event stands as the unofficial beginning of the financial crisis that took years to recover from.