News

An up then down week in the equity markets ended with most indices finishing flat to ‐0.50% on the week. Geopolitics was front and center again this week but unlike last week, didn’t materialize in any meaningful volatility. It seems that central banks have desensitized markets to a certain extent as the downing of a passenger airliner, escalating violence in the Gaza Strip, a looming sovereign debt default in Argentina, and financial woes at a Portuguese bank have yet to upset the financial markets in any meaningful way.

Corporate earnings season continued along at an encouraging pace with S&P 500 top line revenue and bottom line earnings rising 0.89% and 5.87% thus far respectively. 516 companies reported last week and 63% beat top‐line estimates while 64% beat EPS estimates. FOMC meetings, Q2 GDP, PCE, and the conclusion of earnings season will be closely watched this week.

Bond yields marched lower last week with the 10yr dropping below the 2.50% level again. The yield curve flattened further as 2yr yields crept up slightly to 0.53%. Influencing bond yields was a relatively light economic calendar with highlights being Tuesday’s inflation reading coming in as expected at 2.1%, and Thursday’s new home sales indicating a concerning slowdown in the residential home market.

Commodity markets last week saw many industrial metals book solid gains between 1.5%‐3.0% while precious metals (gold, silver, palladium, platinum) dropped 0.50%‐1.60%.