US: S&P 500 Index +2.4%, Dow +2.3%, Nasdaq +2.7%
Europe: STOXX Europe 600 +1.4%, German DAX +1.4%, France CAC 40 +0.5%, U.K. FTSE 100 +1.3%
Asia: Japan Nikkei +1.3%, China Shanghai Composite +2.3%, Korea KOSPI 0.7%
Rates/Commodities: 10-Year Treasury yield +2 basis points to 2.97%, WTI crude oil +3.1%, COMEX gold +0.5%
Widespread gains helped drive the S&P 500 Index back into positive territory on the year, though interest-rate sensitive sectors like utilities and telecommunications lagged the broad market as the benchmark 10-year Treasury yield (briefly) moved back above 3%. Energy stocks moved higher along with oil following President Trump’s announcement that the U.S. would withdraw from the Iran nuclear deal and begin reinstating previously waived sanctions. That news, along with Tuesday’s Energy Information Administration report showing a drop in U.S. oil inventories, helped to push WTI crude prices above $70 per barrel for the first time since 2014. Economic data continued last week’s not-too-hot and not-too-cold trend, which should keep the Federal Reserve on its current rate-hike path of two to three more increases this year.
Overseas indexes enjoyed similarly strong performance, though emerging markets equities lagged notably as the dollar strengthened and U.S. bond yields remained near recent highs. However, according to LPL Chief Investment Strategist John Lynch, “While volatility may remain elevated in the near term, strong economic growth, generally accommodative monetary policies, and the potential currency-related export boost support our preference for emerging markets over developed foreign stocks for international equity allocations.”
Retail sales, industrial production, and the Leading Economic Indicators Index are among the key U.S. economic data due out next week; while Baker Hughes’ weekly rig count should garner attention as traders continue to monitor the U.S. production response to higher prices. Elsewhere, inflation and first quarter gross domestic product data releases are slated for the Eurozone, Germany, and Japan. Eurozone trade balance figures and Germany’s ZEW Economic Sentiment report will also be on investors’ radars.
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