3/24/17 – Stocks’ Worst Week Since Election

  • Stocks suffer worst week since before election
  • Tuesday broke a 110 day streak without a 1% decline
  • Republicans unable to pass healthcare reform

Markets experienced their largest decline of 2017 this week. Most of the weakness occurred on Tuesday as financial stocks sold off sharply. For the week, the Dow declined 1.5% while the S&P 500 was down 1.4%.

On Tuesday, the Dow and S&P 500 broke an impressive streak. The indices had gone 110 straight trading days without a daily loss of greater than 1%. This was longest such streak since the early 90s. It’s really been a surprisingly calm few months in the market. By contrast, through March 24th last year, which is approximately 75 trading days, the market had 14 days where the indices declined by more than 1%. Read More

A major topic over the last few days has been the Republican’s healthcare bill and what that means for future legislation. The current bill doesn’t seem too popular with anyone and it was reported just before 4pm that Republicans were pulling the bill and no vote would take place. Many have argued this vote was important because it would demonstrate the Administration’s ability to pass legislation. The thought being, if Trump can’t get the healthcare bill passed, will he be able to get tax reform passed? I have a hard time understanding that thought process given the nature of both issues. Healthcare is terribly complex and there were numerous factions with differing views on the future of healthcare, especially within the Republican party. On tax reform, especially corporate tax reform, it appears to me there is much more support for doing something, even bipartisan support. Of course, every politician will have different goals, but it seems many are directionally aligned, so it seems far less likely there will be a number of Republicans voting ‘No’ on a potential tax reform bill. Read More

Oil declined this week, decreasing 1.3% to close at $48.14/barrel. The yield on the 10-yr Treasury decreased, closing at 2.41%, from 2.55% a week ago. The average rate on a 30-yr mortgage retreated, moving to 4.23% from 4.30% last week.

Close Weekly YTD
Dow Jones 20,596.72 (1.5%) 4.2%
S&P 500 2,343.98 (1.4%) 4.7%
Oil 48.14 (1.3%) (10.7%)
10-yr Treasury (∆ in bps) 2.41 (9) (3)

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