It was the more expensive areas of the US market that continued to outperform, the likes of Tesla (Tesla) and Apple (Apple) benefiting from increased retail investor appetite following their recent respective stock splits. Overall, the S&P500 added a further +3.3% in local currency terms last week with the sectors that will benefit the most from the opening of the economy including the airlines also seeing some decent support (T.Rowe Price).
Performance elsewhere in the equity arena was much more mixed. Domestically, the large cap centric FTSE100 declined by -0.6% whilst the FTSE250 climbed by +1.2% having benefited from a strong week for Sterling. The home currency gained by +1.9% against the US Dollar and +0.9% over the Euro to close the week at $1.333 and €1.121 respectively. On the Continent, the French CAC40 added +2.2% whilst in Japan, the Nikkei 225 posted a modest gain of +0.2% with early week gains lost after Prime Minister Shinzo Abe announced his resignation on health grounds (T.Rowe Price).
In the sovereign bond markets, yields crept higher on both sides of the Atlantic after the Federal Reserve announced that it would permit above target inflation to offset periods of below 2.0% annualised price growth (Federal Reserve). At home, 10-year gilt yields climbed by 11 basis points (bps) to 0.313% whilst in the US, the equivalent treasury yield added 9bps to 0.717%. The Eurozone benchmark rose by 10bps to close out the week at -0.443%.
Finally, with regards to commodities, gold endured a volatile week, initially trending lower before rallying strongly on Friday; the precious metal ultimately concluded the week +1.4% higher at $1,966 an ounce. Oil also finished the week in positive territory with Brent crude gaining by +1.6%, taking it to $45.12 a barrel.
The Week Ahead
Looking forward to this week’s macro data, final PMI production indices are amongst the standout data publications from the UK. The figures are expected to be little changed from last week’s flash readings with further growth likely to be recorded for both the manufacturing and services sectors although it’s worth remembering that it is coming from a particularly low base.
In the US, Friday’s Labour Market Report is likely to receive plenty of attention with the headline unemployment rate expected to have declined once again. PMI equivalents from the Institute for Supply Management will also provide an insight into how the world’s largest economy has performed over the past month.
Final PMI numbers are also amongst the standout data releases in the Eurozone this week alongside headline inflation, unemployment and retail sales. Official PMI’s are also due from China whilst it’s a particularly busy week in Japan where industrial production, retail sales and unemployment figures have already been announced. (Forex Factory)
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