It was another volatile week for stocks and little wonder, as it was punctuated by mixed earnings news, tumbling oil prices, the run-up to France’s presidential election and new questions about the Trump administration’s agenda after the president seemed to catch even his own team off guard by announcing a tax overhaul on Friday.

As President Trump nears the end of his 100 days in office, which is this coming Saturday, it looks as if he’s going to introduce both a revised health care plan and, as noted, a tax code overhaul. Few details have been offered about either plan, but on Friday, just days after Americans sent their checks to the IRS, Trump said there would be “a big announcement on Wednesday” and his tax plan would include a cut that was “Bigger, I believe, than any tax cut ever.” The president made the announcement from the desk of his Treasury Secretary Steven Mnuchin who earlier that same day had said a tax overhaul was “way too complicated” and unlikely to happen anytime soon. By Saturday, Mnuchin said the tax reform plan could produce some “short-term issues” for the budget, but it would lead to a much-simplified filing process that would help middle-class Americans “get more money in their pockets.”

There’s one immediate hurdle to any such plan working its way through Congress, however: a government shutdown. Congress gets back to work today after a two-week recess and needs to figure out how to fund the federal government for the rest of the fiscal year, with the money running out on Friday. Though the president said, “I think we’re in good shape” when it comes to funding, he ordered federal agencies to be ready for a shutdown.

The election in France

The French went to the polls yesterday to vote for a new president with 4 of the 11 candidates in a virtual dead heat and one-third of voters reportedly undecided. Marie Le Pen of the National Front and Emmanuel Macron, a former finance minister and founder of the En Marche party, were the top vote getters, so they’ll advance to a run-off on May 7 (a candidate needed more than 50% of the vote to win outright). Le Pen has said she’d hold a referendum on France’s membership in the European Union (EU) if elected, whereas Macron supports staying in the EU.

However, even if Le Pen wins in May, a “Frexit” is far from a sure thing as it would have to win parliamentary approval and pass a Brexit-style national referendum

A “snap” election in Great Britain

Speaking of Great Britain, despite having vowed not to hold an election any time soon, Prime Minister Theresa May and announced a “snap” election on June 8 to help shore up parliamentary support as the Brexit negotiations get underway. Her Conservative Party is expected to add seats in the election, giving May a freer hand in the negotiations. May said she had “only recently and reluctantly come to this conclusion,” because “Division in Westminster [i.e., Parliament] will risk our ability to make a success of the Brexit, and it will cause damaging uncertainty and instability in the country.” Meanwhile, in a sign that the Brexit, and inflation, may be having an impact on Britain’s economy, retail sales fell 1.4% in the first quarter, the biggest drop in seven years.

China’s GDP rebounds

Stocks had a strong day on Monday after China announced better-than-expected first quarter growth, with gross domestic product (GDP) coming in at 6.9%, up from 6.8% over the last three months of 2016 and the fastest pace since the third quarter of 2015. Much of the improvement was attributed to increased government spending and the contribution of the technology sector.

The IMF ups its estimate for global growth

Citing a rebound in Emerging Markets, robust investor confidence in the United States, and a revival in global trade, the International Monetary Fund (IMF) upped its estimate for global growth in 2017 to 3.5% – growth was 3.1% in 2016. The IMF forecast that GDP in the U.S. would be 2.5% (after 1.6% last year), while developing nations would expand 4.5% (compared to 4.1% in 2016), and China’s GDP would be 6.7% (it was 6.6% in 2016).

LEIs rise, existing home sales surge

Analysts and investors have been waiting to see when the strong consumer confidence numbers will translate into positive economic news, especially after the weak retail sales report for March. Last week there were some signs of progress. First, the Conference Board’s Leading Economic Indicators Index (LEI) improved 0.4% in March, twice the estimate, and the Conference Board reported that “the gains among the indicators were very widespread.” The LEI is also up 4.9% on an annualized basis over the past six months. In addition, the National Association of Realtors reported that existing home sales rose 4.4% in March to 5.71 million units, the fastest pace in a decade, despite low inventory. In other economic news, the Federal Reserve reported that industrial production was up 0.5% March from February, mainly because utility output jumped 8.6% because of colder weather, the biggest such gain in the history of the index. Manufacturing output fell 0.4% and capacity utilization advanced 0.4% to 76.1%. The National Association of Home Builders/Wells Fargo Builder Confidence Index dipped to 68 in April from March’s reading of 71. Housing starts fell 6.8% in March from the month before to an annualized rate of 1.21 million, but were up 9.2% from March 2016. Building permits in March increased 3.6% from February to 1.26 million, up 17% from a year earlier. The International Energy Agency said that crude oil inventories were larger than normal for this time of year, sending U.S. crude back below $50 a barrel. And first-time jobless claims for the week ending April 15 rose 10,000 to 234,000; the four-week moving average fell 4,250 to 247,250.

A look ahead

Beyond the president’s plans for health care, taxes and funding the government, this will be a busy week for releases, including first-quarter earnings reports for 190 of the S&P 500. In addition, there will be updates on new and pending home sales, the S&P CoreLogic Case-Shiller Home Price Index, consumer confidence, wholesale and retail inventories, and orders for durable and capital goods. The government will also issue its advance estimate for first-quarter growth, expected to be 1.3%.

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