The Tax Cut Narrative is Losing Its Luster

By Lenore Elle Hawkins via

This week we are focused on rising interest rates and a strengthening dollar as the narrative of synchronized global growth fails; rising prices from tariffs, troubles in the oil markets and wage pressures; equity weakness despite earnings as investors become more bearish, fearing this is as good as it can get.


First, let’s recap the market’s moves for the week. Monday’s close marked the end of the first third of the year with the S&P 500 down -0.5% in the first four months of 2018, the Dow Jones Industrial Average down -1.8% and the Nasdaq 100 up +3.5% with the Russell 2000 small cap laden index up +0.80%. The strongest sector for the first four months was Consumer Discretionary, up +5.4% with the weakest Consumer Staples, down -10.8% – yet another hallmark of a late stage market.

Only two other sectors closed the 4-month period in the black, Energy, up +2.9% and Technology, up +2.7%.  As we stepped into May, most every major US equity index was below its 50-day moving average, from the Dow (DIA) to S&P 500 mid-cap (IJH) to Russell 1000 (IWB) to Micro-Cap (IWC) to S&P 100 (OEF) and the Total Stock Market (VTI).

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