Focus on big tech

Markets were mixed last week, as earnings per share fell on average versus the week before, even as good earnings from tech and healthcare helped markets.

In the US, retail sales and manufacturing production both saw positive readings released to the market. Inflation data also came in stronger than expected, although this is unlikely to dissuade the Federal Reserve from cutting interest rates at its July meeting.

Chinese GDP data softened to 6.2% in Q2, which was the slowest pace in several decades. However, it remains to be seen if this was a result of the ongoing trade negotiations, or a deliberate effort from the authorities to slow growth.

Earnings this week focusses on some of the big tech names, with Amazon, Facebook, and Alphabet all reporting.

Equities

A negative week for US equities, down -1.2% for the week. The US market has now returned 19.1% in local currency terms for the year. Europe and the UK were down slightly over the week but both are showing strong YTD returns of 15.4% and 11.0% respectively (local currency).

Fixed Income & FX

The US 10-year yield was down over the week, closing at 2.04% from 2.12%, as the continuing positive economic news sent yields higher. The German equivalent closed at -0.33, close to record levels again. The Euro/US Dollar exchange rate finished at 1.122, whilst Euro/GBP was at 0.90.

Commodities

Oil finished the week lower at $56.8 per barrel. Gold finished the week up at $1,425 per troy ounce. Copper also rose higher at $6,055 per tonne.

The week ahead

Wednesday 24^th July: EU and US Composite PMIs go to print

Thursday 25^th July: ECB Rate decision

Friday 26^th July: Preliminary US GDP data for Q2 is released.