Charles-Henry Monchau

Chief Investment Officer



WEEKLY SUMMARY:  The Dow Jones is up 10 days in a row

U.S. equity indexes advanced on hopes that the tight labor market and moderating inflation would help the economy avoid a hard landing. The Dow Jones is up 10 days in a row, which is the longest winning streak since February 2017. The Nasdaq, however, suffered a modest pullback on the week on the back of Tesla and Netflix earnings. Value stocks outperformed their growth counterparts. On the macro side, June retail sales increased 0.2% MoM (vs. 0.6% expected) while weekly initial jobless claims fell for a second consecutive week (but more than economists had expected). US Treasury secretary Janet Yellen downplayed the risk of recession. Meanwhile, the Conference Board’s Leading Economic Index decreased for a 15th consecutive month in June—the longest string of sequential declines since 2007–2008. Two-year U.S. Treasury note yields increased during the week. However, the 10-year yield was little changed, leading to a further inversion of the yield curve as investors appeared to price in a near certainty of another Federal Reserve rate hike at the central bank’s July 25–26 policy meeting. Commodities continued to rebound despite a strong week for the dollar. The pan-European STOXX Europe 600 Index ended the week 0.95% higher despite the news that Eurozone economy skirts recession (based on revised figures). Two of the leading hawks in the ECB appeared to moderate their stance on future interest rate increases. Japan’s stock markets registered mixed performance for the week ahead of a crucial BoJ meeting.


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