The spotlight this past week in financial markets seemed to be on precious metals. Gold[1] and silver prices[2] soared with the latter seeing the best week since 1998. This is as the haven-linked US Dollar[3] experienced its worst week against its major counterparts on average since early June. The Euro[4] and growth-linked Australian Dollar[5] soared, with the latter trimming some of its gains later on.
Market sentiment turned sour into the end of last week, with the S&P 500[6], Dow Jones[7] and Nasdaq[8] Composite giving up gains. Escalating US-China tensions over the closure of consulates[9], worse-then-expected US initial jobless claims[10] and disappointing earnings from Microsoft (following Netflix’s dismal report earlier) seemed to have contributed to the pessimistic tone in market mood.
The latter could be a sticking point for financial markets in a jam-packed week of event risk ahead[11]. Tech companies such as Amazon, Alphabet, Apple and Facebook are releasing earnings reports, defending their relatively elevated stock valuations. Other more industrial-oriented companies to watch out for include Boeing and Airbus.
Nations are poised to enter technical recessions ahead. Countries like the United States, Germany, Spain and Italy will report second-quarter GDP. Keep in mind that markets are forward looking, and some of these prints may not come as a surprise absent significant misses in expectations. All eyes turn to what is expected to be more stimulus from the US at the end of the week.
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Fundamental Forecasts:
Gold Price Outlook Bullish on FOMC Rate Decision & US Relief Bill
