U.S. markets offered some needed stability for investors this week. All sectors posted gains during the week while volatility cooled down as earnings season for Q1 was kicked off on Wednesday.
Energy stocks led the way this week as rising crude prices provided the sector a meaningful catalyst. News on Monday that Saudi Arabia raised prices for Asian customers started the rise.
Asian indices continued their surge as the Nikkei hit a 15-year high. Other indices made notable moves up this week led by Hong Kong, on record share purchases coming from the mainland.
The dollar renewed its gains against other major currencies. The greenback’s strength along with weak global demand is keeping a lid on commodity prices. In other currency news Barclays recommended selling the British pound. The UK’s currency has seen volatile movements recently as elections near and the central bank maintains an easing stance.
The IMF made news with two headline producing reports this week. The first, warning about secular stagnation, led to multiple statements urging greater monetary easing efforts. The second report reiterated warnings about risks in the global shadow-banking sector, pressing for regulators to be vigilant.
Yield compression continues across Europe. An auction of 6-month Spanish bills was printed with negative yields while Switzerland issued benchmark bonds with a yield below zero. As yields continue into negative territory the ECB is forced to move further out in time in order to comply with the rules of its QE program.
The U.S. saw major M&A activity this week. The acquisition of British Gas by Shell kicked things off while General Electric announced plans to rid itsel of its extensive real estate portfolio and large portions of GE Capital.