Weekly Commentary for the week of April 2, 2018

The Markets

 Leading up to the holiday weekend, Wall Street ended a bad month and quarter with a broad rally as investors hunted for bargains on the recent sell-off. Although the NASDAQ closed the quarter up 2.3 percent, the Dow Jones and the S&P 500 broke their nine-quarter winning streak. For the week, the Dow gained 0.61 percent to close at 24,103.11. The S&P fell 0.08 percent to finish at 2,640.87, and the NASDAQ rose 1.03 percent to end the week at 7,063.44.

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

Stronger Dollar — While the Fed has been raising interest rates to keep our economy from overheating, the dollar has increased in value. From the Fed’s initial rate increase on Dec. 16, 2015, to last week’s sixth rate hike, the dollar has risen 13 percent against the euro (source: BTN Research).

A Lot in a Few — Just 2.2 percent of banks and savings institutions in the United States hold 83 percent of the deposits maintained in FDIC-insured institutions nationwide as of Dec. 31, 2017. There were 5,670 banks and savings institutions holding $17.4 trillion of deposits at the end of last year (source: FDIC, BTN Research).

Discretionary vs. Mandatory — Over the next decade (fiscal years 2019-2028), estimated discretionary spending by the U.S. government is $14.1 trillion, an amount that is dwarfed by the government’s $35.9 trillion of projected mandatory spending (source: Office of Management and Budget, BTN Research).

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright April 2018. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#2074897.1