Stocks Remain Bid into a Big Week Ahead – Dow up 0.3%
Global stock markets remained perky on Friday ahead of some key data this week as European stocks again recorded record highs and US stock markets remained elevated. The Dow finished the week with its eighth successive positive session, closing the day up 0.32%, the S&P added 0.17% and the Nasdaq eased off 0.03%. US treasury yields pushed higher as UoM Inflation Expectations increased, with both the 2-year and 10-year gaining 6 basis points, up to 4.868% and 4.504% respectively. Oil eased on the day, Brent dropping 0.31% to $82.53 per barrel and WTI off 0.33% to $78.00 per barrel. Gold had another standout session, adding a further 1%, topping out just under the $2,380 mark before settling back around $2,360 on the NY close.
US Inflation Data in Focus this Week for Markets
There are two key sets of data that the market is focusing on this week and conclusive results could give investors a clear indication of the path ahead for the Fed and therefore a large portion of the financial markets for the next couple of months. The PPI data is out on Tuesday and the heavier hitting CPI is out on Wednesday and most traders are expecting markets to be relatively quiet ahead of these releases. Confidence took a big hit last month after a higher-than-expected print in the CPI, with stocks pulling back for the next couple of weeks and investors are concerned that the same pattern could emerge this time around without a strong earnings season to push them back higher. We have seen this pattern play out a couple of times now this year, with investor hopes of pending rate cuts being dashed by sticky inflation numbers and the impact could be even harder this time around.
Another Quiet Monday to Kick Off the Week
It is likely to be a very muted start to the day in Asia today as investors react to mixed data from the US on Friday and China over the weekend. There is very little on the event calendar today to inspire traders and probably the most potential comes in the first session of the day with the release of the Quarterly Inflation Expectations in New Zealand, where both traders and the RBNZ will be paying close attention. There are mainly just tier 3 numbers due across the rest of the day, although investors will keep a close eye on what the FOMC’s Jefferson and Mester have to say early the New York session as well as the SNB’s Thomas Jordan later in the day when he speaks in Zurich.
