Market Action

• Some poor earnings reports from a handful of notable companies and weaker than expected economic data kept equity markets in check for much of the week. With the poor data in hand Treasury yields fell giving a boost to the dividend rich Utilities and Telecoms sectors.
• GDP growth came in at 2.3% for Q2 in the U.S., below the 2.5% many economists had been expecting. While many are optimistic for an upgraded revision in the future, poor wage data and diminished consumer sentiment put a damper on Wall St.
• On Monday Chinese markets recorded an 8% decline. While the volatility continues, more easing is being promised by authorities to stave off further declines. More and more companies are citing fundamental Chinese weakness in corporate earnings calls as a headwind to future growth.
• Spain recorded its fastest GDP growth in over 8 years according to data released this week. While the news is encouraging to the current administration, given elections later this year, unemployment is still well over 20%.
• The Emerging Markets Currency index hit a 13-year low early this week. Prospects of tighter monetary policy in the U.S. and U.K., low commodity prices, along with sluggish global demand from China and elsewhere is pushing capital out of EM currencies. The Thai baht, Turkish lira, Malaysian ringgit, Brazilian real and South African rand are among the most affected currencies.
• Saudi Arabia announced projected cuts to oil production this week. On the same day Speaker of the House John Boehner announced a forceful desire to lift the U.S. ban on crude exports. Crude prices remain under severe downward pressure below $50 per barrel.
• While earnings for corporate America on the whole remain stronger than expected, revenue figures continue to deteriorate beyond predictions. Companies continue to cite the strong dollar as a hurdle to growth.

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