HIGHLIGHTS
- A new record high for stocks.
- Trump and Jinping to meet at the G20.
- Powell signals interest rate cuts to come soon.
- Iran shoots down a US drone as oil explodes higher.
- IPO mania continues.
- Gold seems to be breaking higher.
MARKET RECAP
Stocks in the US jumped higher by 2.08% and international equities were up by 1.86%. US stocks closed at a record high. Bonds were up by 0.50% on lower interest rates, and oil exploded up by 8.83% on increased tensions between Iran and the US.
Stocks were helped by two pieces of news. First, on Tuesday, markets had a big rally when it was announced that Trump and Chinese President Xi Jinping have agreed to meet at the Group of 20 in Japan next week.
Then on Wednesday, the Fed held rates steady but hinted that they would cut interest rates soon. Fed Chairman Jay Powell said, “The case for [a] somewhat more accommodative policy has strengthened.” Powell cited a downturn in global economic indicators and increasing trade tensions as heightened risks. The Fed commentary pushed interest rates even lower, and as interest rates fall, the attractiveness of equities increased, moving stocks higher. The 10-year treasury fell to its lowest level since 2016, touching below 2% before ending the week at a 2.07% yield. Markets now expect up to three 1/4% cuts between now and year-end.
IPO mania continued this week. Slack went public and was up 50% from its opening price estimate.
OIL EXPLODES HIGHER
Oil prices exploded higher as tensions between the US and Iran increased. Iran shot down a US drone on Thursday. And then Trump called off a US retaliatory attack at the last minute. The US is sending 1,000 more troops to the Mideast and Iran said that its nuclear enrichment efforts would soon be in excess of the nuclear accord limits.
GOLD BREAKOUT
A lower US dollar, monetary policy run wild, out of control deficits, possible war with Iran, is enough to finally have pushed gold out of its multiyear slumber, and the metal might finally be breaking higher.
SCOREBOARD
