Market Action

• Another week and another set of new highs for major U.S. indices. The growth in stocks this week has pushed equities to their richest valuation (on a forward looking basis) since 2004.
• French bonds have been trading at double last year’s volume over the past month. The country’s Presidential race has sparked uncertainty at every turn and pushed investors towards the country’s safe assets.
• The Consumer Price Index rose by 2.5% over last year according to data released by the Labor Department this week. The gain is the largest in almost five years. The higher prices were driven mostly by higher gas prices compared to a year ago.
• Prices in China also rose per the most recent data release. Consumer prices rose by almost 2.5% while Producer price increases rose by almost 7%, an almost six-year high.
• Janet Yellen stated that every meeting this year was “live” for a rate increase. In a testimony to Congress the Fed Chair continued to affirm the bank’s belief that the economy is on a healthy trajectory.
• Gold rose again this week and has increased by more than 7% so far this year. With inflationary expectations rising, investors have dumped bonds and turned to gold instead.
• Japan’s economy grew at an annual pace of 1% in Q4 thanks to an increase in exports and business investment.

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