Investors appeared to welcome signs of a slowing economy and fading inflationary pressures. Indeed, disappointing US Macro data (PMIs, initial jobless claims, Housing data, Philly Fed leading indicators) drove US rate hikes expectations lower, pushing bond yields and the dollar downward and main stocks indices higher. The US Treasury 10-year bond yield was down to 2.73% on Friday morning, its lowest level in nearly two months. Within equities, small-cap shares and the Nasdaq outperformed. Consumer discretionary was the best performing sector over the week helped by rebounds in Amazon.com and Tesla. It was also a busy week in terms of Q2 earnings reports; many companies are showing greater resilience in profitability and outlooks than expected. In Europe, the ECB raised interest rates by 50 basis points. This larger-than-expected adjustment was combined with the announcement of a new bond-buying tool called the Transmission Protection Instrument (TPI), which was introduced as a measure against the surge in “Periphery” spreads. European shares rose despite a series of discouraging economic data releases, Italian Prime Minister Mario Draghi resignation and the ECB decision to raise interest rates. Core eurozone bond yields fell due to concerns about the economy. In Asia, China’s stock markets posted mixed returns after Premier Li Keqiang tempered expectations of excessive stimulus and indicated flexibility on China’s annual growth target. In Japan, the BoJ left its monetary policy unchanged. Japan’s stock market gained.
Stocks & bonds gain as US rate hikes odds dive
Disclaimer
This marketing document has been issued by Bank Syz Ltd. It is not intended for distribution to, publication, provision or use by individuals or legal entities that are citizens of or reside in a state, country or jurisdiction in which applicable laws and regulations prohibit its distribution, publication, provision or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is intended for informational purposes only and should not be construed as an offer, solicitation or recommendation for the subscription, purchase, sale or safekeeping of any security or financial instrument or for the engagement in any other transaction, as the provision of any investment advice or service, or as a contractual document. Nothing in this document constitutes an investment, legal, tax or accounting advice or a representation that any investment or strategy is suitable or appropriate for an investor's particular and individual circumstances, nor does it constitute a personalized investment advice for any investor. This document reflects the information, opinions and comments of Bank Syz Ltd. as of the date of its publication, which are subject to change without notice. The opinions and comments of the authors in this document reflect their current views and may not coincide with those of other Syz Group entities or third parties, which may have reached different conclusions. The market valuations, terms and calculations contained herein are estimates only. The information provided comes from sources deemed reliable, but Bank Syz Ltd. does not guarantee its completeness, accuracy, reliability and actuality. Past performance gives no indication of nor guarantees current or future results. Bank Syz Ltd. accepts no liability for any loss arising from the use of this document. (6)
