Markets are “trying to adjust for the prospects of politics in Washington. That’s the major turbulence right now,” Brad McMillan, chief investment officer at Commonwealth Financial Network, told the Wall Street Journal.
Investors are also waiting on corporate reports in the upcoming earnings season, looking for strong results to justify the pricey valuations in the U.S. markets after the recent post-election rally. The S&P 500 is trading at about 18 times earnings estimates for the next 12 months, compared to its long-term average of 15.
U.S. markets were also weighed down after auto manufacturers revealed worse-than-expected U.S. sales for March, denting the bullish sentiment on economic growth.
“Sales are under forecast and there were a lot of incentives during the month,” Michelle Krebs, an analyst with Autotrader.com, told Bloomberg. “Before long, we will see more production cuts.”
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