U.S. stocks had one of their best weeks in the past five years. Better than expected earnings by some key companies, economic data and a technical bounce served as catalysts.
Energy served as the best performing sector this week. Oil prices have risen over the past several trading days but top analysts, including Ed Morse of Citi, warn that future lows are to come.
European markets continued to rise in spite of wavering reports on Greece throughout the week. Sentiment was volatile the past few days with markets interpreting Finance Minister Varoufakis’ efforts to reach a deal with EU leaders as promising some days and then turned pessimistic towards the end of the week.
Mr. Varoufakis has proposed a series of bond swaps tied to Greek GDP growth as a way to continue financing his country. Meanwhile the ECB has refused to accept Greek bonds as collateral any longer. Whether Greece can garner enough cash to meet payments over the next few weeks is uncertain.
Currency volatility surfaced again this week. Ukraine’s central bank announced it could no longer support the hryvna while Denmark pushed its interest rates further into negative territory. Turkey also considered an emergency interest rate meeting as well while the Australian dollar hit multi-year lows.
U.S. employment data came in stronger than expected on Friday for the month of January. Wage data also showed greater than expected gains that provided some bullish sentiment Friday morning.
China lowered its reserve ratio once again this week. The move frees up funds that banks can pump into the economy.
Some European manufacturing data unveiled some strength on the Continent, particularly in Germany. The European Commission also raised their growth forecasts for the year.