Despite last month’s dreary returns, stronger nominal growth and a patient Fed are most likely a positive combo for equities.
First quarter 2018 GDP is anticipated to come in at 2.50%, the same pace as for 2017.
However, economists are estimating a bit higher 2.8% GDP growth by year-end.
This compares with much slower growth of just 1.8% by end-2016.
That said, as we've talked over, it could be well argued the US is in the late innings of this expansion. Despite our currently positive outlook - as February returns attest - we’ve entered a more volatile phase.
Weekly Update through March 2, 2018 The S&P 500 lost -1.98%, even as the Dow Jones lost -2.97%, the Russell 2000 lost -1.00% and the Nasdaq lost -1.05%.
As for US bonds, they gained 2bps.
Globally, the MSCI World Index lost -2.23% and the Barclays Global Aggregate Bond Index gained 17bps.
The Euro Stoxx 50 lost -3.39% in local-currency (Euro) and lost -3.34% in USD. Meanwhile, the Topix lost -2.94% in local-currency (Yen) and -2.04% in USD.
Month-end Update through end-February 2018 In February, the S&P 500 lost -3.69%, the Dow Jones lost -3.96%, the Russell 2000 lost -3.86 and the Nasdaq lost (just) -1.73%.
Meanwhile US bonds lost -95bps.
Globally, the MSCI World Index lost -4.09% and the Barclays Global Aggregate Bond Index lost -89bps.
In February, the Euro Stoxx 50 lost -4.57% in local-currency (Euro) and -6.16% in USD. The Topix lost -3.70% in local-currency (Yen) and -1.33% in USD.
