Economic and earnings data continues on upward trajectory, writes Ian Slattery. He reports on a busy week for the markets.
Economic data across the developed world continues to be solid, led by last Friday’s better than expected US non-farm payroll report. The US labour market added 209,000 jobs in July, comfortably outstripping expectations – the June figure also saw a modest upward revision. The unemployment rate also dipped to 4.3%; marking a 16 year low.
The eurozone also saw GDP and inflation data continuing their respective upward trajectories. However, this contributed to the euro hitting a three year high versus the US dollar, and the currency’s strength is a key focus for the market.
It was also another busy week for earnings in the US. With roughly 80% of the S&P 500 having now reported, the positive trend continued with over three quarters of those reported beating bottom line expectations.
The global index returned 0.4% for the week and is now up just over 3% in 2017. Commodities slipped slightly from last week, as Gold (-0.9%) and
Silver (-2.9%) moved lower. Oil also fell following a strong rise the week before, and closed at just above $49.50 per barrel.
US 10 year Treasuries prices rose, with the yield (which moves inversely to price) falling to 2.26%, from 2.29% a week previously. The equivalent German yield closed the week at 0.47%, down from 0.54%. The Euro continued its 2017 trend versus the US dollar, closing the week at a rate of $1.18.
THE WEEK AHEAD
Tuesday 8th August
Earning seasons continues to wind down, but there are still a number of major companies reporting in the US this week, including both Snap and Walt Disney.
Thursday 10th August
The UK reports its latest trade balance, where the consensus forecasts expects the deficit to narrow to -£2.4bn, versus the last reading of -£3.1bn.
Friday 11th August
The June industrial production figures for the eurozone go to print, where a 3.6% year-on-year rise is expected.
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