The spotlight this past week in financial markets seemed to be on precious metals. Gold and silver prices soared with the latter seeing the best week since 1998. This is as the haven-linked US Dollar experienced its worst week against its major counterparts on average since early June. The Euro and growth-linked Australian Dollar 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, Dow Jones and Nasdaq Composite giving up gains. Escalating US-China tensions over the closure of consulates, worse-then-expected US initial jobless claims 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. 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.