This Week in Stocks – French Elections Bring Big Moves in the Markets

CHART 30-Year Bonds

The stock market chopped around last week, with the S&P 500 closing only 7 points higher, closing at 2351. The NASDAQ and the Russell had better weeks, up 1.5% and 2.5% respectively.

With a weekly range of only 1.7% in the S&P 500, traders were perhaps cautious with the French elections approaching. The movement that did occur was due to global security risks and inconsistencies related to the Trump administration’s message on tax reform. For example, Treasury Secretary Steve Mnuchen early in the week said that tax reform could not move forward without a healthcare bill. Later Two days later, he said they were close to bringing forward tax reform proposal. So concerns over the “Trump Trade” remain.

With the French election results having produced an outcome that brought big relief to the markets, the stock market is getting an early week upward surge. Still, we expect the S&P 500 to struggle to make gains, overall, and this week to be range bound at slightly improved levels.

Bond markets fell sharply, raising yields, as the flight-to-safety bid was pulled world-wide (See our cycle chart on the 30-Year bonds)

Watch the askSlim Market Week for a review on what happened in the markets this week and my short-term view for the coming week.