The major U.S. averages stayed relatively flat throughout the week. The emphatic “No” vote in Greece weighed down markets early on in the week before a new proposal by the Greek government Thursday night helped spark some recovery.
Renewed fears over Chinese weakness also pressured global markets lower to open the week. The rapid downturn in Chinese markets sparked new government actions to keep prices stable and also pushed almost half of Shanghai’s listed companies to suspend trading in their shares.
Oil prices slid 8% on Monday on a renewed sense of weak demand thanks to lower global growth estimates and concern over China. The Australian dollar, frequently cited as a proxy for commodity demand, reached a 6 year low.
Earnings season has begun in the U.S. with Alcoa and Pepsi reporting their financial results for the second quarter. Earnings are expected to fall year over year, like Q1, but many analysts believe the bar has been set too low.
Saudi Arabia announced the intent to invest up to $10 billion in Russia in areas such as agriculture, medicine and logistics. The deal shows Russia’s continued pursuit of capital from outside Western markets.
While interest rates fell early on in the week, thanks to tensions from Greece and China, Janet Yellen’s speech this week helped push them back to the 2.40% level. The Fed Chair reiterated that the central bank finds it appropriate to raise rates this year.
The selloff in China pushed the Nikkei to its lowest point in the past several weeks. The Japanese market lost 3% on the week and volatility reached its highest point since April.