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Global equity markets powered ahead last week as the U.S. Federal Reserve (Fed) opted to keep rates unchanged for now, but intimated to investors that future rate cuts could be implemented as appropriate. Markets embraced the more accommodative stance, propelling the S&P 500 Index to its fifth all-time high of 2019.

In Europe, the European Central Bank (ECB) discussed the future of monetary policy at the ECB Forum on Central Banking and ECB President Mario Draghi struck a similarly dovish tone announcing that if the Eurozone’s economic situation deteriorates in the coming months, the bank would implement further stimulus measures. The announcement sparked a sharp rally in the region’s equity and bond prices.

News flow on the trade front was also helpful for markets. U.S. trade negotiators said they will meet with their Chinese counterparts before President Trump and Chinese President Xi Jinping meet in Japan at next week’s G20 summit. While a deal is not expected to be reached at the G20, the willingness to resume negotiations has raised expectations heading into next week’s high-level talks.

Weekly returns to 21 June 2019
(AUD 5-day return far right- hand column)

Source: Bloomberg

Notable company news

Pfizer (NYSE: PFE) - The Deal of the Day 

U.S. pharmaceutical giant Pfizer has agreed to buy Array BioPharma (NASDAQ: ARRY) for $10.64 billion in cash (a 62% premium to the previous closing price) as one of the world’s biggest pharmaceutical companies seeks to expand its cancer line up with targeted therapies. Pfizer has been trying to expand its oncology offerings through a combination of deals as well as by putting more focus on its own drug-discovery efforts. Pfizer’s cancer drugs are projected to generate $8.3 billion in sales this year, according to EvaluatePharma.

The deal for biotechnology company Array includes two drugs in an increasingly important segment of the market: treatments that target genetic changes driving the cancers of certain patients. Array’s two drugs, Braftovi and Mektovi, are currently approved to treat skin-cancer patients with certain genetic alterations. The drugs could also play a pivotal role in treating some colon and rectal cancer patients, if ongoing clinical studies gain FDA approval.

Pfizer 5-year chart

Source: Bloomberg

Ffizer is held in Macrovue’s High Quality thematic share portfolio.


  • 10-Year Treasury yield: -2 basis points to 2.06%
  • Gold: +3.5% to US$1399.63/oz (a six year high)
  • WTI crude oil: +8.9% to US$57.43
  • AUD/USD: +1.15% to .6962

The week ahead


In the week ahead, while investors are focused on the G20, key economic data will also be released, headlined by core personal consumption expenditures, the Fed’s preferred inflation gauge as well as data on consumer confidence, new home sales, and personal income and spending. Overseas, the Japanese leading index and UK gross domestic product report are the focal points.

Source: briefing.com

Charts of the week

1. S&P 500 hits all time high on 21 June 2019. What sectors are working? (in USD)

Source: Bloomberg

2. Which stocks have been the biggest drivers for S&P 500 returns...

Source: Baird

3. S&P 500 at a new high but investors FAR from bullish (and that’s a good thing)

Source: Bespoke

4. BIGGEST level of fear amongst the BAML Fund Manager survey since 2008


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