The market finally showed us that it’s not bulletproof after all. News from Washington finally put some fear in investors and on Wednesday the markets saw their steepest one-day decline in roughly eight months. The biggest thing to keep in mind is that while events in Washington make for good fodder, they don’t, for the most part, directly affect your portfolio. The biggest impact will come in how the current investigations could impede the Trump agenda going forward, namely tax reform. Traders welcomed the thought that multinationals could have billions in cash at their disposal if they could bring it back without a huge tax burden. If that starts looking more unlikely, stocks could retreat. The good news for investors is that the markets snapped back on Thursday reinforcing the notion that buyers are still in control.
This will be a relatively light data week. Homebuilder confidence continues to look solid and this week’s home sales data should confirm the trend. Manufacturing PMI comes on Tuesday. The sector has shown modest expansion lately and this month’s number should look about the same. Lowe’s (LOW), HP (HPE), Best Buy (BBY) and Costco (COST) are the biggest companies reporting earnings. Given that, investors will likely be more focused on the release of the Fed meeting minutes on Wednesday and the OPEC meeting in Vienna on Thursday.
It’s a little early but keep an eye on June’s Fed meeting. It’s still more likely than not that we’ll see a rate hike but the odds have come down in the past week. Wednesday’s Fed meeting minutes could give us some clues but, as always, keep an eye on the data.
Here are my four ETFs to keep an eye on in the coming week.
iShares MSCI Brazil Capped ETF (EWZ)
Brazil hasn’t had a stellar track record lately of integrity within the ranks of its government. Former President Dilma Rousseff was impeached and removed from office last year following accusations of breaking national budget laws. Her vice president and successor, Michel Temer, now has his own feet in the fire after being accused of bribery.
