Weekly Update
Dow +2.04% S&P +1.49% Nasdaq +1.47% Russell +2.37% Brazil +4.59% Nikkei +9.21% Hang Seng +5.33% CSI +2.63% Shanghai +2.63% EuroStoxx +4.25% FTSE +1.19% CAC +4.34% Dax +4.54% Ibex +4.22% MIB +4.25% SMI +1.47%
For much of the week equity prices moved up aggressively as investors pointed to a variety of reasons to add risk to their portfolios. A faster than expected, relatively smooth transition of Theresa May to UK prime minister allayed some lingering Brexit fears. Speculation on the growing likelihood of aggressive BOJ and BOE stimulus later this summer coincided with a deluge of US Federal Reserve speak that indicated the Fed is still likely to keep rates at very low levels for quite some time. Finally, solid early Q2 earnings reports/commentary provided hope that US earnings growth has troughed and business on both sides of the Atlantic can withstand any negative impacts related to the UK's decision to leave the EU. The Dow and S&P each registered multiple new all-time highs as investors that have kept cash on the sidelines felt compelled to jump in, forcing valuations higher. For the week the Dow rose 2%, S&P gained 1.5% and the NASDAQ added 1.5%. Risk-on flows also pulled money away from sovereign bond markets, sending rates higher. US Treasury supply was met with notably tepid demand early in the week spooking some bond investors. Improving US data, including some hotter than expected inflation readings, helped the US 10-year yield back up ~25 basis points to finish the week at 1.59%. The German 10-year Bund future traded without a negative yield for the first time since the UK vote.
Macro :
- BOE Should Implement ‘Immediate’ Rate Cut, Vlieghe Says in FT
- Italy Hires JPMorgan for EU50b ‘Bad Bank’ Plan: S. Telegraph
- Turkey Selloff May Be Buying Opportunity: Elbrus’s Khmelnitski
- Fethullah Gulen Denies Role in Turkey Coup Attempt: FT
Keep an eye on :
- AIR FP : AirAsia, Destini to Form JV to Buy Airbus MRO Subsidiary: Edge
- ALV GY : Allianz Seeks to Regain Market Share, CFO Wemmer Tells Boersen Z
- AAPL US : Apple Proposed Simplifying Royalty Payment System: N.Y. Times
- ATCOA SS : Atlas Copco CEO Says There Is M&A ‘Appetite‘ in the Company
- BAYN GY : Bayer/Monsanto Breakup Fee Suggests Lack of Confidence: CLSA
- BMPS IM : Banca Monte Dei Paschi Di Siena May Be Cut by Moody’s
- BMPS IM : Paschi Said to Weigh NPLs Sale, Recap Without State Help: Sole
- DB1 GY : Deutsche Boerse Workers Push to Renegotiate HQ in LSE Deal: DPA
- HSY US : Hershey, Mondelez Ratings Suspended at JPMorgan
- LSE LN : Deutsche Boerse Workers Push to Renegotiate HQ in LSE Deal: DPA
- LHA GY : Lufthansa’s Eurowings Resumes All Turkey Flights as of Now: Co.
- MON US : Monsanto to Seek Talks With U.K. Govt to Expand Presence: Times
- RBS LN : Santander Weighing Deal to Acquire RBS Consumer Bank Unit: Sky
- RCS IM : Cairo May Seek to Replace RCS MediaGroup Board Members: Stampa
- RR/ LN : Iran Energy Minister Has Talked With Siemens, Rolls-Royce: FT
- SAB LN : Children’s Investment Fund Has SABMiller Stake Near 1%: Times
- SAN SM : Santander Weighing Deal to Acquire RBS Consumer Bank Unit: Sky
- SBMO NA : SBM Signs Leniency Agreement W/Brazil Authorities: Prosecutors
- SIE GY : Iran Energy Minister Has Talked With Siemens, Rolls-Royce: FT
- STAN LN :
- HO FP : France’s Thales Scouting for More JV Partners in India: PTI
- VOW3 GY : VW Promises Compensation to U.S. Dealers on Diesel Engines: DJ