The Week Ahead – Still Thankful

Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.

What a difference 365 days makes. Last year we gave thanks to the broad markets as both equities and fixed income prices soared. This year has been a much bleaker harvest. Let’s take a look at the numbers.

2017: returns through November 15, 2017
S&P 500:                +16.58%
MSCI ACWI ex-US:        +22.63%
Barclays Aggregate:     +3.26%

2017: data points through November 15, 2017
U.S. GDP 1Q17:           1.8%
U.S. GDP 2Q17:          3.0%
U.S. GDP 3Q17:          2.8%
Unemployment Rate:       4.1%
10-year U.S. Treasury:  2.33%
2-year U.S. Treasury:    1.68%

2018: returns through November 15, 2018
S&P 500:                +3.87%
MSCI ACWI ex-US:        -10.16%
Barclays Aggregate:     -2.23%

2018: data points through November 15, 2018
U.S. GDP 1Q18:           2.2%
U.S. GDP 2Q18:          4.2%
U.S. GDP 3Q18:          3.5%
Unemployment Rate:       3.7%
10-year U.S. Treasury:  3.11%
2-year U.S. Treasury:    2.86% 

As my colleague Lou Abel noted in his piece "Naked and Afraid", a slew of risks have left investors feeling vulnerable: interest rates, global trade wars, and China. Sifting through the data from even just a year ago shows that the U.S. economy is in much better shape than it was in 2017. The market is a pricing mechanism pricing in future expectations, and it definitely feels like 2017 pulled forward 2018 returns. The turkey may be smaller this year than last year, but there are still many things to be thankful for: continued economic growth, low inflation, and robust employment.

The week ahead will be quiet with updates on the housing market and leading indicators as the main highlights. Wishing you and yours a wonderful Thanksgiving!

Data deck for November 17 – November 23: