The US capital markets had a strong week with the major indices advancing at a strong clip. The Dow Jones Industrial Average had the best week at +2.8%, while the S&P 500 and Nasdaq were +1.6% and +1.5%, respectively. The Nasdaq is now up over 10% for the year, while the broader S&P 500 index is nearing +4% for the year.
Despite the strong equity markets, with gold up +0.4% for the week and silver up +2.3% for the week. Many farm commodities jumped on trade war fears, with lean hogs +3.0% for the week. The VIX (fear index) retreated heavily, and was -9.5% for the week.
In terms of sector performance, telecom bounced back +3.4% for the week, but is still down -9.6% for the year. Consumer discretionary stocks did well at +3.2% on the week, and are now up +11% for the year. Utilities struggled again and were down -3.2% and -8.4% on the week and year, respectively. In general, the market has rewarded risk this year, as the steady large cap and dividend paying stocks have significantly lagged the smaller cap and growth oriented stocks. Old sector favorites like utilities, telecom and financials that many mature portfolios are in are taking a back seat to information technology and consumer discretionary sector holdings.
In economic and political news, trade war talks dominated the headlines for much of the week, and there are big meetings with the G7 summit and North Korean fast approaching. Lingering questions about Italy’s future in the EU also were in the headlines, but did not seem to affect the US markets too much, but keep an eye on uncertainty in the Eurozone to eventually have an effect on worldwide markets, similar to the debt crisis in Greece.
Cryptocurrencies struggled, as Bitcoin was down -2.0% for the week, finishing at $7,310, and Steem was down -8.0% for the week, finishing at $2.20. The much anticipated EOS launch has been botched badly, but the coin price is hanging on at the moment at in the $13s... I am sticking with Steem, personally.
Overall, the US capital markets had a good week and my outlook remains positive.
Thank you for reading,
Brian