Market Action

• Markets recovered from last week’s sell off but still saw volatility continue with the Dow alternating triple digits moves throughout the week. The most apparent catalyst was the Federal Reserve’s published statement, which removed the word “patient” with regards to the horizon of its interest rate normalization. Markets immediately rose on the statement’s publication.
• As part of the Federal Reserve’s statement was the FOMC’s projections on GDP growth and inflation out through 2017. The Committee made notable downward revisions to future GDP growth and the rate of change in inflation, leading markets to interpret lower interest rates further out into the future.
• Major European indices rose this week despite a revival of hostile rhetoric between Greece, core European countries and the IMF. Greece’s creditors refuse to release the last tranche of funds agreed to in February due to displeasure with the pace reforms are occurring in Greece. Private estimates have raised concern that Greece could run out of cash before a payment to the IMF is due at month’s end.
• The Nikkei, up over 12% in 2015, saw a strong rise this week thanks to improving export data. Data confirming improved competitiveness for Japan has been slow to materialize despite the Yen’s depreciation.
• OPEC stated that they expect US crude oil output to slow given the falling price environment. A growing number of US producers have frozen projects in shale areas while smaller firms struggle with debt burdens.
• The UK announced they would join the Chinese-led Asian Infrastructure Investment Bank as a core member, angering US officials. Other key American allies followed Britain’s lead shortly after the announcement and Japan announced that it would consider joining under the right conditions.
• The strength of the dollar is becoming a cited headwind for a growing number of companies in earnings reports. Analysts cast the dollar as the main reason earnings through the first half of the year have come down.

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