Market Action

  • World shares steadied on Friday after selling in the tech sector triggered their biggest fall in over a month, while the yen slid to a two-week low as the Bank of Japan signaled its stimulus was staying in place.
  • Oil prices dipped this week to six-month lows, hit by an unexpected large build in United States gasoline inventories announced on Wednesday and an international outlook that suggests a big increase in supply in the coming year despite an OPEC-led effort to cut production and prop up prices.
  • On Wednesday, the United States Federal Reserve raised its key interest rate to the 1% to 1.25% range and offered details on how it plans to start selling the $4 trillion worth of bonds it bought under its quantitative-easing policy. Chair Janet Yellen said the decision to go ahead with both actions reflects the central bank’s confidence in the prospects for the US economy.
  • United States consumer prices unexpectedly fell in May and retail sales recorded their biggest drop in 16 months. The Labor Department said on Wednesday its Consumer Price Index dipped 0.1 percent last month after rising 0.2 percent in April. In a separate report, the Commerce Department said retail sales fell 0.3 percent last month amid declining purchases of motor vehicles and discretionary spending after a 0.4 percent increase in April. May’s drop was the largest since January 2016.
  • Five members of the Bank of England’s monetary policy committee voted to maintain the interest rate at 0.25%, while three called for a rise to 0.5%. The bank is under pressure to handle a deepening malaise in the UK economy as earnings and consumer spending fall, inflation rises and post-election political turmoil prevails.


This Week from Blacksummit

Bullish Bias and Asset Classes Breakout: Diminishing Safety Margins
John Charalambakis


Recommended Reads

The Arab World’s Coming Challenges
Tarek Osman

Is Slow Productivity Growth Here to Stay?
Marc Levinson

Spring Rally in Stocks, Bonds, Gold and Bitcoin Unnerves Investors
Min Zeng and Ben Eisen


Image of the week

The passive/active fund flow differential is at the lowest level in a couple of years. Investors may have ceased chasing index ETFs (and mutual funds).