It was a mixed day for markets last Friday. Technology stocks garnered the bulk of investor attention, briefly pushing the Nasdaq Composite to an intra-day record high before the index settled for a more modest 0.56% gain on the day. Unfortunately for the wider market, there was no real breadth to the move, concentrated as it was to a select few outliers. The S&P 500 closed the day more or less flat and the Dow Jones ended the session 0.6% lower. Gold ended the week just shy of reaching a new record high, content with $2,747 an ounce.
A couple of events that transpired over the weekend are beginning to play out in the markets early this week. The first is a retaliatory missile strike by Israel on Iranian soil, which appears to be mostly symbolic given that the attack targeted Iran’s own missile facilities. All things considered, both the strike and the response from the Iranian government were relatively restrained, if anything assuaging fears instead of stoking them. Oil prices opened the week with a huge gap to the downside, down over $3 a barrel this morning.
The second event was yesterday’s general election in Japan. The snap election was designed to reestablish a measure of faith in the ruling party, but instead the Japanese electorate appears to have punished the incumbent party to the point of costing them a parliamentary majority. Neither party has the numbers to form a government, meaning ministers now have 30 days to wrangle a coalition together. The uncertainty hit the Yen hard this morning, which is currently battling to stay below 154. The Nikkei 225 on the other hand is already up 1.7% at the time of writing.
An interesting start to the week to be sure, which is more that can be said for the economic calendar. This week’s publications are once again heavily backloaded, the most important items being the Fed’s favourite PCE price index on Thursday followed by Non-Farm Payrolls on Friday.
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