US stocks were on the defensive last week as markets shifted focus to the prospects of the US administration implementing their economic plans. The S&P 500 declined 1.2% on 21st March, a modest drop by historical standards but the first time the index lost 1% or more in a single trading day since October 11th 2016.
Concerns culminated in the postponement of the Congress vote on the American Health Care Act, in the face of opposition from the 'Freedom Caucus' in the Republican Party. The vote had been seen as an early indicator on the new administration's ability to pass through tax and regulation reform legislation.
US treasuries yields fell during the week, as investors gravitated towards safer assets, and aforementioned policy implementation concerns came to the fore. Oil was also lower as the market grappled with the theory that OPEC cuts may prove ineffective in the face of increased non-OPEC supply.
The global index was lower for the week dropping 1.4%, which pared the year to date gain to just under 4%. Gold moved higher by just over 1%. Both copper and oil fell, returning -2.3% and -1.7% respectively.
The US 10-year bond price went higher, as the yield moved from 2.50% to 2.41% over the course of the week. The equivalent German yield followed, finishing at 0.40% from 0.43% a week earlier.
The euro/dollar rate closed the week at 1.08, as the euro strengthened which lowered returns for Irish investors outside the eurozone.
The week ahead
Wednesday 29th March:
The UK government is expected to move to trigger Article 50 of the Lisbon Treaty, which will formerly begin the negotiations to exit the EU. Whilst the move has been well flagged, markets could still see a reaction.
Thursday 30th March:
The final US GDP data for Q416 goes to print, where the consensus expects economic growth to come in at 2% (quarter-on-quarter).
Friday 31st March:
Eurozone inflation data for March is expected to be 1.8% (year-on-year), from 2% a month earlier.