Highlights of the week ended March 24, 2017 and a look ahead to this week’s expected announcements and potential market-moving activity.

Last Week:

  • U.S. equities finished negative for the week: The Dow Jones Industrial Average (DJIA) closed 318 points lower, or fell 1.5%, to 20,597. The Standard & Poor’s 500 (S&P 500) index fell 34 points, or fell 1.4%, to 2,344. The Nasdaq closed last week 1.2% lower at 5,829.
  • American Healthcare Act:
    • Last Friday, House Republican leaders withdrew their proposed healthcare legislation to repeal the Affordable Care Act of 2010 (“Obamacare”) few minutes before the scheduled vote. The bill was pulled after a failed attempt to secure enough votes to ensure the bill went through, even after weeks of personal lobbying by Speaker Paul Ryan and President Trump. The financial markets recorded modest declines during the week, with the market retracting 1.2% on Tuesday – primarily driven by the headlines relating to the failure to repeal the healthcare law. This decline made headlines because the S&P500 has gone 109 trading sessions without a pullback of more than 1%, which ranks as the ninth longest streak going back to 1928. However, more importantly, this failed vote exposed some of the deep divisions in Washington, calling into question the prospects of the promised tax reform and other pro-growth policies built into financial markets following the election of President Trump. At this point, the focus in Washington will shift to tax reform, with a particular focus on the border adjustment tax and the plan to scrap the business deduction for interest expense.
  • Economic Data:
    • A quick recap of the economic data released last week – total existing home sales, which aggregates completed transactions that include single-family homes, townhomes, condominiums and co-ops declined 3.7% to a seasonally adjusted annual rate of 5.5 million for the month of February, although still a 5.4% increase on a year over year basis. Meanwhile, UK retail sales came in strong for February, up 1.3% from the previous month, above expectations of 0.3%. The Eurozone Flash Purchasing Managers Index (PMIs) reported were strong with manufacturing at 56.2, services at 56.5 and composite at 56.7, all above expectations.

Look Ahead:

  • Senate Judicial Committee Hearing on Neil Gorsuch continues on Monday
  • The S&P/Case-Shiller Index of home prices for January is reported on Tuesday
  • Boston Fed President Eric Rosengren speaks about the economic outlook on Wednesday
  • Final Read of fourth quarter GDP growth to be released on Thursday
  • Chicago Purchasing Manager Index for March is released on Friday