Charles-Henry Monchau

Chief Investment Officer

WEEKLY SUMMARY: Stocks, Bonds & Gold soar as inflation cools down

US stocks recorded strong weekly gains as investors welcomed data showing a continued cooldown in inflation. The S&P 500 Index ended the week 6.5% below the all-time intraday high it established in early 2022. The Nasdaq Composite recorded an even stronger gain but remained 12.9% below its record peak. Both US headline and core inflation rose 0.2% in June, a tick below expectations. The annual increase in headline inflation slowed to 3.0%, its slowest pace since March 2021, while core (ex food & energy) inflation slowed to 4.8%, the slowest since October 2021. Producer price index (PPI) inflation data, released Thursday, was arguably even more encouraging (+0.1% yoy for Headline and +2.4% for the core). On Friday, markets appeared to get a boost from the University of Michigan’s gauge of current consumer sentiment, which rose well above expectations to 72.6, its highest level in nearly two years, and marked its largest monthly advance since 2006. Weekly jobless claims, reported Thursday, fell back more than expected, to 237,000, reversing almost all of the previous week’s jump. US Treasury bond yields fell below 4% on the back of cooler inflation data. The pan-European STOXX Europe 600 Index ended the week 2.95% higher—the biggest weekly gain in about three-and-a-half months. Precious metals and cryptocurrencies gained over the week while the dollar index tumbled for 5 of the last 6 days, with its second biggest weekly decline (-2%) since March 2020.


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