Thursday, May 19, 2022

Global Market Square

By on July 8, 2021

The U.S. and European stock markets dropped sharply Thursday as investors assessed the global economy’s direction. The Federal Reserve’s minutes have caused some to be concerned with U.S. economic growth stalling due to the following statement: “The FOMC [Federal Open Market Committee] continues to see the uncertainty surrounding the economic outlook as elevated, although increasingly widespread vaccinations along with ongoing policy support, were viewed as helping to diminish some of these uncertainties.”

According to the minutes, “participants generally saw supply disruptions and labor shortages as constraining the expansion of economic activity this year. Participants’ projections of real GDP growth in 2022 and 2023 were generally little changed.”

All investors are now analyzing how to best rotate their portfolios considering the three P’s:

  1. Peak In Growth,
  2. Peak in Inflation,
  3. Peak in Federal Stimulus.

Have you thought about the Three P’s? You Must.

Several key economic metrics reported Thursday:

  • U.S. Initial Claims for Unemployment Insurance rose to 373,000, up from 371,000 last week, increasing by 0.54% from the previous week.
  • 30 Year Mortgage Rate fell to 2.98%, compared to 3.02% last week and below the long-term average of 7.85%.
  • Consumer credit increased in May at a seasonally adjusted annual rate of 10 percent.
  • Revolving credit increased in May at an annual rate of 11.4 percent.
  • Nonrevolving credit increased in May at an annual rate of 9.5 percent.

Eurozone Summary for July 8:

  • Stoxx 600 closed at 451.40, down 8.13 points, or 1.77%.
  • FTSE 100 closed at 7,030.66, down 120.36 points, or 1.68%
  • Dax index closed at 15,420.64, down 272.07 points, or 1.73%.

Wall Street summary for July 8:

  • The Dow Jones Industrial Average closed at 34,421.93, down 259.86 points, or 0.75%.
  • The Standard & Poor’s 500 closed at 4,320.82, down 37.31 points, or 0.16%.
  • The Nasdaq Composite Index closed at 14,559.78, down 105.28 points, or 0.72%.
  • The Birling Capital Puerto Rico Stock Index closed at 2,415.23, down 10.41 points, or 0.43%.
  • The U.S. Treasury 10-year note closed at 1.30%.
  • The U.S. Treasury 2-year note closed at 0.19%.

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