U.S. stocks retreated slightly from their all time highs this week. Minutes from the Fed’s latest meeting revealed a divided committee while commentary from regional Presidents this week put the potential of a rate hike in focus. Futures markets still only give a roughly 50% chance of an increase by year-end.
Crude oil continued its rally this week, rising over 20% since it fell below $40 earlier this month. Production cuts from OPEC are a popular excuse but the weak dollar on dovish monetary commentary is also playing a role.
The strong Yen is posing a problem for the Japanese economy. Exports fell in July at the fastest pace since the Financial Crisis. GDP for Q2 also came in at an extremely weak rate of 0.2%. The poor figures sent the Yen higher and remain a major issue for Shinzo Abe’s hopes of revitalizing the economy.
Chinese housing prices rose 7.9% over last year according to recent data. Moody’s raised its forecasts for China’s growth this week as well, citing “significant” monetary and fiscal stimulus policies.
China also approved a connection between the stock exchanges in Shenzen, a tech-dominant exchange on the mainland, with Hong Kong. The move resembles a connection between Hong Kong and Shanghai and demonstrates the country’s continued efforts to liberalize its markets.
Investment heavyweights are raising their bearish bets against the S&P 500 according to securities filings. George Soros doubled his short of the market following similar moves by Jeffrey Gundlach, Carl Icahn and David Tepper.