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Another good week for global equities. With U.S. President Donald Trump and Chinese President Xi Jinping reaching a trade truce at the G20 meeting that included no new tariffs, an agreement to restart negotiations, and even a reprieve for Huawei Technologies, the market started the week on a strong note.

Stocks finished up on the week after withdrawing slightly from record highs after Wednesday's pre-holiday melt-up. On Friday, we had a strong employment report where the U.S. economy added 224,000 jobs in June - a mark that topped the consensus expectation of economists for 160,000 job adds.

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

Source: Bloomberg

Is a global recession imminent? 

The Global Advance / Decline (A/D) line made new highs again. Additionally, the Global Dow Index is nearing major a breakout. Hard to buy the 'we're headed for a global recession' crowd when these two things are happening.




  • 10-Year Treasury yield: 2.035% (after hitting all time low of 1.95% on Wednesday)
  • Gold: -1.3% to $57.74/bbl
  • WTI crude oil: -1.3% to $57.74/bbl
  • AUD/USD: +0.20% to 69.79 

The week ahead


The economic calendar is a normal one with an emphasis on the Fed and inflation data. Fed Chairman Powell delivers his semi-annual Humphrey-Hawkins testimony on Wednesday and Thursday. Markets expect nothing new. PPI and CPI inflation measures have been tame, but any hint of higher prices will attract attention. The NFIB Small Business Optimism index has risen in importance as a measure of enthusiasm for the Trump administration and prospects for business investment and employment.

Source: briefing.com

Charts of the week

1. Longest U.S. economic expansion ever!


2. However, the U.S. had a deep recession and a slow rebound. The recovery growth rate has been sub-par compared to others.


3. Historically, the summer months are tough for stocks. But July tends to see a summer bounce (likely due to earnings season).

In fact, over the past 10 years, it has been the strongest month of the year for the S&P 500. (Of course, this year comes after the best June since 1955).

Source: Bespoke

4. Pay TV watching habits by age group.

They’ve migrated to YouTube and Netflix...


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