There was very little significant new news last week, but what news there was, was enough to reinforce investors' assumptions that the United States has dodged an economic slowdown. With this renewed confidence, prices for risk assets surged higher and prices on safe-haven assets were pummeled. Markets plunged lower last November and December as investors were pricing in a sharp economic slowdown; consumer spending had drastically slowed and Chinese economic metrics indicated economic contraction in the world's second-largest economy. However, the markets bottomed out at the end of December after global central banks quickly dialed back on their programs to normalize or tighten monetary policy.
Among the economic metrics released last week, nonfarm payrolls for March increased to 196,000 from the stagnant 33,000 reported in February. Investors were pleasantly surprised as the March report was higher than consensus expectations and near the top of the consensus range. At 3.8%, the unemployment rate remained near its 49-year low and wage growth grew 3.2% on a year-over-year basis, reflecting a tight labor market. Additionally, the Trump administration said it expects to reach a new trade accord with China within the next four weeks. As investors became more comfortable that the economy will continue to chug along and looked forward to trade normalization, risk asset prices continued to rise. The stabilization across recent economic metrics has led to a significant improvement in the Federal Reserve Bank of Atlanta's GDP Nowcast projection for first-quarter 2019 GDP growth. The Nowcast projection has risen to 2.1% after hitting a low of only 0.2% at the beginning of March.