Chart of the S&P 500 (SPX) – The Week Ahead: Economic Growth and Apple (AAPL) Event – Source: TheTechnicals.com and TradingView

As we noted over the weekend, the 10-year and 3-month Treasury yields inverted on Friday for the first time in more than a decade. This is a rare event when longer-term bond yields drop below shorter-term bond yields. Historically, this has been seen as a reliable sign of an upcoming recession. But if a recession is indeed coming, the onset is typically rather slow. In the past, it’s ranged anywhere from several months to a couple of years after an inversion in the yield curve.

Economic Growth and Recession Concerns Weigh on Stocks

Persistent concerns about a global slowdown in economic growth and a potential recession weighed heavily on stocks late last week. The S&P 500 (SPX) plunged on Friday, falling a full 1.90%. This was the worst single day for the benchmark index since January 3rd of this year. The drop occurred just as the market was surging and recovering back up towards last year’s record highs.

Mueller vs Trump: Insufficient Evidence

On Sunday, the U.S. Attorney General William Barr revealed that Special Counsel Robert Mueller did not find enough evidence to charge President Trump with Russian collusion or obstruction of justice. Though U.S. equity futures initially surged on this news, stocks quickly pared those gains and reversed course.

The Week Ahead: Economic Growth and Apple Event

Looking forward to the week ahead, the key market theme should continue to be increasing concerns over U.S. and global economic growth. U.S.-China trade negotiations are still very much up in the air. Any developments in these talks in the week ahead, whether positive or negative, are likely to impact markets.

A key economic indicator will also be released on Thursday – the final U.S. Gross Domestic Product (GDP) reading for the fourth quarter of 2018. Though it’s lagging much like other economic indicators, GDP is at the heart of current economic worries. Economists are expecting Q4 annualized GDP growth to come in at 2.4%. Any significant deviation from that, to the upside or downside, will likely move the markets.

Apple’s (AAPL) Special Event

As we noted last week, Apple (AAPL) will be holding a much-hyped “it’s show time” special event on Monday. Apple CEO Tim Cook will present two new subscription services: a video service to compete with Netflix and Amazon, and an all-in-one news service for Apple devices. Last week, Apple’s stock surged sharply on anticipation of this event and corresponding boosts in analyst ratings for the stock. Since AAPL accounts for a major portion of the key stock indexes, any substantial move in the stock can make a significant impact on the market as a whole.

Earnings and Other Market Events

Just a handful of company earnings are scheduled for the week ahead. The new season of major earnings releases will begin in earnest in the second week of April. And besides the U.S. final GDP reading on Thursday, there are also several other key events scheduled, mostly from the U.K., Canada, and the euro area.