Friday, March 9, 2018

Happy Friday! Markets continued swinging throughout the week and could probably use some rest this weekend. After a relatively quiet period last year, 2018 has ushered in a new regime of volatility. However, this is quite standard; it was 2017’s quiescence which was abnormal. Market indicators continue suggesting the path of least resistance is up, but Atlas is not complacent. We monitor a variety of gauges each day and will make adjustments if needed.

Economic indicators have softened lately. Many of our recent notes to you have included the term deceleration, but this is not cause for alarm. Often, output slows without actually contracting during a normal economic expansion. It appears this is happening now. Efforts to boost the economy are underway even as the central bank becomes less accommodative.

Policy influences may have mixed results. As the recently implemented tax cuts begin permeating through the economy, they could provide the fuel needed to accelerate the economy once again. On the other hand, our central bank seems prepared to tighten monetary policy at least three times this year which might counteract the government stimulus. It might be like driving with the parking brake engaged.

Later this morning, the Bureau of Labor Statistics is scheduled to release their report on February’s labor situation. Earlier released indicators suggest another strong number is likely. Data from the Conference Board’s Consumer Confidence Report found a growing number of Americans claiming jobs are “plentiful” while the number of those characterizing jobs as “hard to get” declined. Additionally, Wednesday’s ADP employment report continued its string of strong figures, boding well for the government release in about 90 minutes. Look for our note on today’s unemployment release next week.