Back near highs, equity markets in the US experience the grind higher this week on the back of the upside of the bottoming rates. Into the end of the week, bond yields rose near monthly highs and the US curve steepened hard. The trade war is in the news again, this time optimism comes through the markets and we see this lead equities to the upside. Some officials from both nations are set to meet this coming week. US CPI data comes out better than expected with continued strengthening economic data which causes some confusion as to the coming proposed rate cuts out of the US Fed. Now there is a slight chance of a rates being held as is in the coming week. Into Friday there is officially a 20+% chance of keeping rates on hold.
News out of other central banks hit last week and continue this week. The ECB has announced continued stimulus measures with the possibility of a relaunch of quantitative easing. ECB’s Draghi called for renewed economic growth support from fiscal authorities. Brexit continues to make ground this week as hopes of the UK finding a way around the Irish backstop helps the pound move up nearly 400 pips. However this came to a halt when PM Boris Johnson was not able to obtain enough MP votes for the new election.
Here is a look of last week’s stock market on a daily basis (red vertical lines split days).
Stock Market and Sector Overview
Here is a break down of the weekly performance in various stock market sectors (top chart):
- Energy stocks +2.71%
- Technology -0.69%
- Financials +3.30%
- Retail +5.62%
- Utilities +0.38%
Overview of key markets last week (bottom chart):
- Crude oil -2.93%
- S&P500 +0.86%
- Silver was -3.41%
- Gold -1.21%
- US dollar -0.25%
Weekly Economic Calendar
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