The second week in a row of low volatility which is usually advantage bulls. Monday saw a nice spike up for indexes and then the other four days of the week the range was very narrow. Monday’s rally was due to the lessening chance of TRADE WARS!!(tm):
Treasury Secretary Steven Mnuchin said over the weekend that the Trump administration would delay implementation of tariffs on Chinese goods and “put the trade war on hold” while working out details of a deal between the countries. At the end of trade negotiations that weekend, China agreed to buy larger amounts of U.S. goods to help narrow the trade deficit between the two economies, but didn’t agree to the specific U.S. target of $200 billion.
News was generally quiet but we did get the Fed minutes late Wednesday which were considered market positive.
Federal Reserve officials in their meeting in early May confirmed they planned to raise interest rates in June and were not concerned they were behind the curve on inflation.
“Most participants judged that if incoming information broadly confirmed their economic outlook, it would likely soon be appropriate for the FOMC to take another step in removing policy accommodation,” the minutes said
Although inflation hit the Fed’s 2% target in the latest reading for March, for the first time in a year, officials were not convinced it would remain there for long.
“It was noted that it was premature to conclude that inflation would remain at levels around 2%, especially after several years in which inflation had persistently run below the Fed’s 2% objective,” the minutes said. Only a “few” officials thought inflation might move “slightly” above the 2% target.
For the week the S&P 500 closed up 0.3% while the NASDAQ added 1.1%.
Outside of some housing reports, economic news was sparse.
Treasury yields dropped back down the 2.9% range this past week after popping to 3.1% the week before.Continue reading