- Equities in the US rallied on Friday to end the week in positive territory. Earnings reports so far have presented some modest good news into markets but geopolitical turmoil in Gaza and tragedy in Ukraine sent markets down midweek.
- Governments in Asia continue to try and paint a rosy outlook for growth despite murky data published this week. China hit its growth target of 7.5% exactly this week while Japan revised forward projections down but insists that healthy inflation is building. The news sent the Yen down.
- Fed Chairwoman Janet Yellen testified before an eager Congressional committee this week. Ms. Yellen repeated her often sung tune that the economy continues to progress but labor market signals are weak. The central bank leader stated that monetary policy will remain accommodating until wage pressures build. In addition Ms. Yellen lent little credence to the notion that asset bubbles have formed overall but did note that small cap and biotech firms seem overvalued.
- European markets rebounded after a poor week. Industrial data still shows weakness, as do figures on loan growth. At the forefront of commentary pertaining to the Euro area is whether or not QE is warranted. The IMF is the leading advocate currently for additional stimulus. After markets closed on Friday Espirito Santo, the Portugese lender, filed for creditor protection in Luxembourg.
- While risk assets saw gains this week traditional barometers of safety also strengthened. The 10 year Treasury rate fell below the 2.50% rate on the week and Utility stocks were among the most robust this week.
- The nations that comprise the BRICS acronym met this week and agreed to launch a new development bank to rival western institutions. The bank will be located in China and a pledge for an initial capital level of $50 billion with a $100 billion reserve fund for balance of payment liquidity.
View Full Market Update (PDF)