Weekly Market Update March 11-March 15

March 19, 2019

Written By: Steven Klos & Samuel Buddy Wiseman-Barker

TSX rose 0.9% on the week, the S&P 500 saw a gain of 2.9%, and the Dow Jones industrial average saw a gain of 1.57%. The markets saw a fairly choppy week with no new updates on the trade dispute with the US and China. Boeing sent the Dow spiraling with the second 737 max 8 crashing for the second time in five months. Shares dragged the major indices down with investors fearing the accidents will effect Boeing’s bottom line.

Wall Street’s bull market celebrated its 10-year anniversary this week after the S&P 500 and Dow Jones Industrial Average both bottomed out on March 9, 2009 during the global financial crisis. Over the past 10-years, US stocks have been on the rise, generating gains of 288.7% and 305.5% for the DJIA and S&P 500 respectively. The best-performing sectors over the period have been consumer discretionary and technology (generating an annual return of 23% on average) for the S&P 500, while real estate and industrial’s (generating an annual return of 19% on average) led the TSX. Energy and telecom/communications sectors grew the slowest (averaging a 9% return per year) for the S&P 500 while energy and materials (+3%) lagged in the TSX. Historically, the average bull market has lasted 1700 days, meanwhile, our current one is approaching 3700. This makes our current bull market the second longest in history, following the 4500-day bull market from 1987-2000. With only one bull market lasting longer than our current footing, it is hard to predict what lies ahead for our markets. Although fundamentally, bull markets are fueled by a combination of economic growth, rising corporate profits, and favorable interest rates; all of which are evident in the current environment.

Boeing stock took massive hits all week after their 737 max 8 series plane had its second crash in a five month period. The majority of major countries around the world have now grounded the aircraft model. The 737 Max 8 was Boeing’s new flagship model. Although the stock dropped to weekly lows of $368 it is still up YTD. Shares were held up by a clear support level, indicating investors thought the shares we cheap.

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