March Was In Like A Lion, Out Like A Lion

The lion ate the lamb for dinner, but on this last day of the month, the stock market is finally quiet.

March came in like a lion, and the lion never left it possibly ate the lamb. But on this last day of the month, the stock market is finally quiet and tilting higher in pre-opening trading. Dow futures were up 90 points, and the all-important NASDAQ was up 0.5%. Bond prices were modestly higher.

Also this morning, the Bureau of Economic Analysis released the Fed’s preferred measure of inflation, Core PCE (personal consumption expenditures). It was up 0.2%, which is in line with expectations. Personal income rose by 0.4%, and spending rose by 0.2%, both as expected. The Department of Labor released the numbers for weekly jobless claims, which fell 12,000 to 215,000 another new all-time low.


But the numbers had no market impact. Unless there is a miracle rally today, the Dow and S&P will record losing quarters, breaking an eight-quarter streak. The NASDAQ might eke out a small gain. Given fresh memories, this might seem like it was a horrible quarter, but the losses are relatively minor, on the order of 2-3%.

With March and the first quarter out of the way, the markets might be ready to focus on something new in April. How about watching earnings for stocks and the economy for bonds? If traders do, they might realize earnings are still good, and the economy is doing well. April will be a critical month for more developments on trade. If the headlines remain positive on trade, April could be a much calmer month. If the headlines turn sour, March will have served as a practice run for what is to come.

This is my last daily comment for The Trust for Credit Unions. Thank you for reading my sometimes random, rambling thoughts. I hope I have helped you to see through the smoke and confusion that often surrounds the markets and better understand what really matters to the economy and interest rates. Finally, I hope I’ve been able to occasionally provide a smile or a chuckle something we all need more than the latest GDP number.

Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.

March 29, 2018

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