Volatility fell last week as an appetite for risk returned to the markets.
Some of the things that brought risk appetites back were a lack of activity on North Korea’s founding day, Job openings, CPI data, and Consumer sentiment.
North Korea
On Friday the 8th, there was much expectation that the following day North Korea would take some provocative action. As Monday came, appetites were ready to buy on the fact that North Korea remained quiet.
Jobs
Job openings expanded greater than expected to 6.17M according to JOLT’s. That’s right, 6.17M, job openings are near all-time highs.
CPI
Consumer Prices (CPI) improved this last month to 1.7%, moving ever closer to the Federal Reserve Board’s (FRB) 2% inflation target. In addition, wage growth in the US has moved out of the 2% range, reaching 3.2%. With wage growth, comes the potential for GDP and inflation growth.
North Korea… Again…
Investor appetites were not stamped out when North Korea finally made a show of force on Thursday night. After firing a missile that landed to the east of Japan, markets in Asia pulled back 0.5% but quickly rebounded. US markets the next day closed at all-time highs. The S&P 500 closed at 2500 points for the first time.
Conclusion
These animal appetites have either become complacent to North Korean activity, or the risk of North Korean action has begun to be priced into current market valuations. Either way, the Bulls were not deterred!
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