Stock markets fell mid-week as focus shifted from rate cut expectations towards the earnings season. US equities dropped over stalling trade talks and the increase of uncertainty, and as President Trump taunted China over its slowing GDP data and suggested he could still impose more tariffs at any moment. The President continued to attack the Fed, as he has in the past. Pressing for rate cuts for his amazing economy. As more foreign central banks cut their own rates this week. Interestingly, the lingering trade tensions appear to be a major motivating factor for Fed officials who appear increasingly motivated to cut rates, to the extent that this dovish thinking completely overshadowed the economic data, which for the second straight week came in substantially stronger than consensus estimates. By Thursday, futures markets were pricing in better than a 50% chance the Fed would cut by 50 bps at the end July, but the Fed tried to walk back these more aggressive expectations on Friday. Early in the week, the Greenback retraced higher prodded by robust US manufacturing and retail sales figures. Gold prices popped back to the highs of the year helped by declining interest rate forecasts and a continued escalation of Iran tensions, while crude oil futures tumbled more than 6% this week despite reports of Iran waylaying at least two oil tankers in the Strait of Hormuz. For the week, the S&P lost 1.2%, the DJIA dipped 0.6%, and the Nasdaq fell 1.2%.
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 down 2.52%
- Technology down 0.95%
- Financials down 0.92%
- Retail down 2.14%
- Utilities down 0.33%
Overview of key markets last week (bottom chart):
- Crude oil down 6.50%
- S&P500 down 1.39%
- Silver was up 6.71%
- Gold up 1.02%
- US dollar up 0.28%
Weekly Economic News
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