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The Weekly Track spring

- The Weekly Track – Spring? by Bob Savage
http://trackresearch.com/articles/the-weekly-track-spring/

The hope of Spring is more than weather, it includes a myriad of mood swings and gentle changes in habits and trends – something that Winter just bluntly didn’t deliver. The harsh return of volatility remains the de facto takeaway for markets last week and it begs the question of why it will get better next week – will it be the economic data or the politics or the timing of the next Trump tariff? The balancing act for mood remains mired in the mix of tax reform leading to better US growth against trade tariffs and other political fears driving down investment. US 1Q GDP was marked lower across the board last week as inventories rise, spending slips and the mood sours. Friday’s equity rally back looked more like short-covering than a convincing bounce back in mood and so the Spring hopes fall flat. The key event next week will be the FOMC as it delivers a rate hike. The speed of the next hike and the words and forecasts around that pace of change for the US risk-f
ree rate all matter significantly as the world feels the squeezing out effects of the US government deficits and the US Fed push for normalization. That leaves the EU summit, the Trump China tariffs and the FOMC as the distortion to a gentle Spring turn. The quarter-end maybe a bigger event still – but that is still 2 weeks away.