Taxes, Data, and Bombs | December 1, 2017

Last week saw a rise in volatility. It came during a week where markets surged substantially. Was the surge founded and volatility should calm down? Or will volatility increase from a market move in the other direction?

Market data for the week was strong. Home prices rose steadily over the last year, pending home sales were up, GDP for the 3rd quarter was revised up to 3.3% from 3.0%, and CB consumer confidence rose to a 17 YEAR HIGH at 129.5. The strength of this data helped markets advance across the week.

Tax reform played a major roll in market advances last week. Markets surged and retreated each day on news that the senate was moving forward with reform, or experiencing delays. This has been a common theme over the last several weeks and one that should continue through the remainder of the year as the bill moves through reconciliation.

Ironically the event that had, seemingly, the least amount of impact on market direction was the ICBM test by North Korea. The markets apparently are discounting any real threat they may present. The volatility in the markets will likely subdue for the next several weeks as reconciliation moves along. Should this become an eleventh-hour situation we could see volatility increase at year end as congress attempts to get the bill to President Trump’s desk.

 

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Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.

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