With several geo-political concerns of late, it is difficult for markets to cut through the noise. They found a way last week, hopefully that continues!
Tensions mounted and not between enemies. US tariffs extended to Europe, Canada, and Mexico on June 1st— creating undue tension. These came just in time for the G7 Summit.
At the same time the G7 Summit was taking place, the SCO (Shanghai Cooperation Organization) Summit was happening. This was a summit which included China, Russia, and 6 other nations. In contrast to the events of the G7 Summit, the SCO reflected a tone of accord.
The Summit between the USA and North Korea is set for June 12th–marking a historic advancement in US and North Korean relations. This poses an opportunity of pause for the markets leading to this event as the leadership of either nation shows a willingness to change course at a moments notice.
Markets found a way to focus on the economy, even with all these potential headwinds. Economic indicators for manufacturing and services both strengthened more than expected, showing a strong ramp up for the 2nd quarter. Unemployment data released this week showed that there are more job openings than unemployed workers for the first time since the tracking of the data. These strengthened data points for the US mean the Federal Reserve Board (FRB) will likely have the ammunition needed to raise rates 2 to 3 more times this year, and almost certainly on June 13th.
Equity markets advanced on the strong current data and the likelihood of a strong 2nd quarter GDP and resulting earnings. While current economic strength is the highlight currently, all the underlying strife surrounding tariffs and protectionism could end up being a strong headwind going into year end.
Your interest in our articles helps us reach more people. To show your appreciation for this post, please “like” the article on one of the links below:
Facebook | Twitter | LinkedIn | Google+
FOR MORE INFORMATION:
If you would like to receive this weekly article and other timely information follow us, here.
Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long term holding strategy is the best strategy in any market environment.
Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.