Week of Apr 7 2017 Weekly Recap & The Week Ahead
“I measure what’s going on, and I adapt to it. I try to get my ego out of the way. The market is smarter than I am so I bend.” – Martin Zweig
1. Q1 2017 Performance Summary — courtesy of BIG, as shown in the sector performance chart below, Technology did most of the heavy lifting this quarter with a rally of 12.4%, or more than double the S&P 500’s gains. Behind Technology, Consumer Discretionary rallied 8.2%, while Health Care gained 8%. On the downside, the only two sectors that were down on the quarter were Energy (-7.2%) and Telecom Services (-4.8%). Besides these two sectors, others that underperformed during Q1 were Financials, Real Estate, Industrials, and Materials.
2. US Trade Deficit Drops Sharply to $43.6 Billion in February — the Commerce Department reported the deficit fell to $43.6 billion in February, 9.6 per cent below January’s deficit of $48.2 billion. Imports dropped 1.8 per cent to $236.4 billion as the flow of Chinese goods tumbled by $8.6 billion, led by a big drop in cellphone imports.
3. Payless ShoeSource Files for Bankruptcy — Payless ShoeSource has filed for bankruptcy, marking the 10th filing by a national retail chain this year. As part of its restructuring, the company will close nearly 400 stores as it attempts to boost its balance sheet and restructure its debt load. Chains that compete with Payless include DSW (NYSE:DSW) and Caleres (NYSE:CAL).
4. Trump Rattles Putin With Strikes on Syria, Escalating Civil War — U.S. President Donald Trump bombed the Russia-backed forces of Syrian leader Bashar al-Assad for the first time, escalating a six-year civil war and heightening tensions between the world’s two nuclear superpowers. Trump ordered the launching of dozens of cruise missiles from U.S. warships after accusing Assad’s regime of killing scores of civilians with poison gas. What started as a Syrian crackdown on protests in Damascus has morphed into a conflict involving the U.S., Russia, Iran and Turkey, as well as multiple extremist groups and militias backed by regional powers such as Saudi Arabia.
5. AAII weekly Market sentiment — according to the weekly sentiment survey from AAII, only 28.3% of individual investors considered themselves bullish in the last week. That’s down from an already low reading of 30.2% last week, and it’s the lowest weekly reading seen since before the election. This week’s decline also extends the record streak of consecutive weekly readings where bullish sentiment was below 50% to 118.
Bearish sentiment rose to just under 40% this week (39.6%), marking the fourth week in the last five where bears have outnumbered bulls.
The week ahead — Economic data from Econoday.com:
