Market Action

  • Markets were relatively calm across al asset classes this week in the U.S. Earnings season continues to support a positive tone to equity markets as roughly three quarters of firms have reported bottom lines above estimates.
  • Asian markets rose in the backdrop of the Asian-Pacific Economic Cooperation summit. China formally announcing a start of November 17th for linking its equity markets with Hong Kong and growing expectations that Prime Minister Abe will delay a second tax hike were two large catalysts for the respective markets’ rise.
  • The summit among major Pacific economies, including the U.S., saw major deals agreed to. Presidents Obama and Xi Jinping agreed to deals on carbon emissions, communications on naval activity and also decided to lower tariffs on technology products. China also agreed to a trade deal with South Korea while India and the U.S. worked out an agreement on the former’s food subsidy programs which should allow for completion of a deal at the World Trade Organization.
  • The Bank of England’s policy committee lowered their forecasts for both inflation and economic growth. The reported projections make it likely that the UK will hold off on raising interest rates. The pound continued its recent decline.
  • The International Energy Association released a report on Friday detailing an outlook that the current price environment in crude oil is here to stay. Citing lower demand in China and robust supply in the U.S. the group stated that they do not see an appreciation of oil prices in the near future.
  • Greece recorded its first period of economic growth since the onset of the financial crisis on Friday.
  •  The Financial Stability Board announced new capital rules that will apply to 30 global banks identified by the group. The rules, when combined with previous regulations, could force banks to fund up to 25% of their assets with equity or convertible instruments.

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