Market Action

• Volatility stayed on at low levels throughout the week, as little macroeconomic data was reported and earnings held the spotlight. Notable names in the Telecoms, Consumer Discretionary and Technology sectors announced strong earnings to help propel those areas as leaders for the week.
• While earnings for the S&P 500 are weak relative to Q1 of 2014 results thus far have exceeded the muted expectations set by analysts. Financials in particular offered a surprise to the market, with several firms posting record high profits.
• After tightening margin rules last Thursday China’s monetary authorities cut reserve requirements by 100 bps over the weekend. Poor underlying data, capital outflows, and fears of more defaults in local bond market have put pressure on banks for more liquidity.
• Relations between Greece and other members of the Eurozone continued to deteriorate this week. At a meeting of finance ministers on Friday relations reached a boiling point according to the Financial Times with Greece complaining of an EU desire for intrusive inspections and other nations accusing Greece of backtracking on past agreements. PM Tsipras ordered all public funds to be diverted to the central bank this week as Greece struggles with liquidity.
• The U.S. rig count continues to decline, reaching its lowest levels since 2010 according the most recent data. Despite lower headline numbers improved efficiency at existing wells is keeping production levels up.
• Deutsche Bank agreed to a record $2.5 billion fine in the U.S. and U.K. for charges related to its role in manipulating Libor rates. The benchmark rate underpins hundreds of trillions of debt around the globe.
• Japan and the U.S. have ramped up negotiations on the terms of the Trans Pacific Partnership trade deal, giving hope that an agreement is close to being completed.

View Full Market Update