After a strong first quarter for stocks, the next few weeks will determine if the momentum can continue. Stocks for the quarter recovered a good portion of the fourth quarter declines, and market sentiment ended strong with a successful Lyft IPO last week.
This weekend’s release of strong China factory data sets the stage for a busy week of U.S. economic data ahead. The U.S. economy experienced slowing growth in the first quarter, but the degree and persistence of the slowdown is still to be determined. This week’s readings on retail sales, manufacturing and employment will be closely scrutinized in light of the downturn in global trade and changing monetary policy.
Over the next few months, I anticipate stocks will test the all-time highs set last year. Given recent falling yields, I expect U.S. Treasury rates to increase 25-40 basis points prior to Memorial Day.
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