Market Watch - April 6, 2018

By ScotiaWealth - The Zukiwsky Group (Sponsored)
April 6, 2018 - 3:07pm Updated: April 12, 2018 - 3:11pm

Market Watch April 6, 2018
Big Picture

By Andrew Trimble

Trade tensions in focus

The new month and new quarter got off to a volatile start amid rising – and falling – trade tensions and the potential regulation of U.S. technology companies.

Starting with trade, U.S. President Trump threatened new additional tariffs against China late Thursday after Beijing hit back with its own proposed duties on American goods at the start of the week. Still unclear is whether these are opening salvos to spark negotiations or the first shots in a tit-for-tat long-term trade war. Also on the trade front, there’s growing optimism a preliminary NAFTA deal may crystalize in the coming days with top negotiators for the U.S., Canada and Mexico meeting in Washington.

The U.S. technology sector also made headlines this week as the prospect of tightening regulation rose in some corners of the industry due to privacy breaches. Despite the fretting, many market participants remain bullish about equities pointing to a synchronized rebound among developed countries, a sound U.S. economy and solid corporate earnings around the globe. With regard to the upcoming U.S. earnings season, S&P 500 companies are expected to grow earnings 17% in the first quarter 2018 from a year earlier according to Factset.

In U.S. economic news, factory activity remained robust in March despite falling from February’s level. The ISM’s manufacturing index fell to 59.3 last month versus 60.8 the prior month with reads above 50 pointing to expansion. The ISM’s gauge of service activity – released two days after the manufacturing print – also pointed to expansion despite falling from February’s read. In the euro zone, the inflation rate rose to 1.4% in March while a separate release showed unemployment falling to 8.5%, a nine-year low.

Looking ahead, Canada and the U.S. release employment data today with most eyes on the U.S. numbers to see if they may impact the Fed’s course on rate rises.

Stocks rise
Traders returning from the Easter holiday were greeted with a bumpy week filled with ups and downs through Thursday close. For the four days covered in this report, the Dow rose 402 pts. to close at 24,505, the S&P 500 added 22 pts. to end at 2,662 and the Nasdaq moved ahead 13 pts. to settle at 7,076. The TSX ended down 11 pts. to finish at 15,356.


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March building permits exceed last year’s values

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