Market Synopsis: Equities up, Treasury Yields down, Commodities up, Dollar down, Crypto up
Past Week Events:
- Jerome Powell, The Chairman of the Federal Reserve, flew to Sweden this Tuesday. Powell gave a speech which expected to be critical for markets. However, it was rather anticlimactic as Powell did not comment on monetary policy in the United States. As it turned out to be irrelevant to markets there was little reaction.
- The event of the week was certainly CPI, or the consumer price index which serves as a measure of inflation. There were very high expectations going into Thursday as J.P. Morgan predicted a solid miss on inflation. CPI delivered at “expectations” sending markets rallying. This miss on inflation gives investors hope that inflation may continue to cool which may provide a path for rate cuts.
- Next week is rather dry in terms of market catalyst. However, on Wednesday, we will get the Producer price index, final demand, which will also provide another measure of inflation. However, unlike the CPI which provides inflation from the perspective of the consumer PPI provides perspective from the producer or manufacturers of goods and products.
Market Snapshot:
- Markets continued higher this week with heightened hopes of cooling inflation and a fed pivot. Everything was in the green this week, stocks, bonds, commodities, and crypto. Jerome Powell’s much anticipated speech turned out to be insignificant. CPI also pleased the market coming in slightly under expectations. Overall, sentiment in markets is very optimistic. The market seems to be pricing a soft landing, not a recession. However, its important to still be weary and watchful. This optimistic sentiment could disappear as quickly as it arrived.
U.S Equities:
- Indexes(Week)
SPX 3,999.09(2.67%), DJIA 34,302.61(2.00%),
NASDAQ 11,079.16(4.82%), RUT 1,887.03(5.26%)
Sectors
- Almost all sectors were in the green expect for Consumer staples and Health care which were down 1.28% and .16% respectively. On the other end of the spectrum Real Estate and Consumer Discretionary were up over 4% this week.
Treasuries:
- Treasury yields got hammered this week. CPI’s “good” news sent yields tumbling as it demonstrated inflation is cooling which in turn translates to a potential Fed pivot. If the Federal Reserve decides to cut rates yields will drop significantly.
Commodities:
Oil
- As with everything else Oil has done extremely well over the past week. It is now sitting at about 80$ a barrel. This comes as China is going to set a record in oil consumption at 16 million barrels per day.
Gold
- Gold surged higher on the week nearing 2,000 an ounce. Its now at its highest April 2022.
BTC -19,832, 17.14% ETH - 1,460.93, 15.37%
- Bitcoin has had a stunning recovery being up everyday for the past 10 days. Surprisiningly with no clear catalyst Bitcoin has recovered a significant amount of the losses incurred after the FTX debacle.
Europe:
Stoxx 600- 452.54, 1.83% DAX -15,086, 3.26% FTSE 100 -7,844, 1.88%
Chart of the DAX (5-day)
- In part of a push for a more environmentally sustainable world, Europe is making corporations back up their claims that they are “green”, or simply put that they claim that their products are environmentally friendly. In 2020, research showed that 53% of corporations claimed this but provided misleading information.
Asia:
XJO (Australia)-7,328, 3.07% Shanghai 180 Index-8,619, 2.01% Nikkei 225- 26,119, 0.56%
XJO 5-day Chart
Great Post!