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Week in Review: 13-17 May 2024

Financial Markets (Weekly)

Week-on-week, the main stock market indices continued rising, with the S&P500 gaining 1.5%, the NASDAQ 100 up 2.1%, and the RUSSEL 2000 up 1.9%. 

Gold is up by 2.3% (close to all-time highs), and silver gained 11.9%.

The barrel of WTI is up 1.7% to 79$ per barrel.

Bitcoin rised 9.2% and is now around 67100$.

The relative strength of the US dollar fell 0.8%. 

Financial conditions (NFCI) loosened relative to the previous week.

M2 money supply has stabilized around 20.8T$.

US bond yields didn't change much, now sitting at 4.83% for the 2-year and 4.42% for the 10-year.


Comment Section

This week, the top US stock market indices hit new highs, on average volume. Volatility is low. However, I'm not convinced that this is the beginning of a raging bull market unless other liquidity measures start spiking. However, fear in the markets is also low (bad timing to sell puts).

The PPI release indicates that inflation on the producer side is still strong, but CPI is kind of stable fut above the FED target. The FED says higher for longer. The ECB should start cutting this summer, though.

The consumer is starting to reduce consumption, which during the course of the year might get reflected on stagnant or declining earnings for many companies, which is negative from a fundamental perspective. Let's see which comes to fruition: soft landing or a hard landing?


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