- Treasuries failed to stage major rally, even after encouraging CPI/PPI data and elevated initial claims. Breakeven inflation rates not falling, because they have already priced perfect disinflation (pages 2-10)
- Another strong week for leveraged loans. Credit spreads continue to narrow. Good for risk assets, despite elevated real yields (pages 7, 13-15)
- The 2-year Gilt yield jumped above the peak of the mini-budget crisis. UK wage pressures intensifying. Labour market has remained very strong on the back of tech spending (pages 19-22)
- 2-year German bund yield rises to the highest since March 9th 2023 as well (page 23)
- Sterling is climbing sharply. Trade weighted euro had a strong week too. Yen has weakened past 140. CAD, AUD continue to rally (pages 29-32)
- Commodities show signs of life. GSCI agriculture index rose 5.3% last week. Industrial metals rallied 2.4%, with copper up 2.4% as well. This tallies with the stock market moves (pages 33-37)
- Consumer discretionary (+9.3%), industrial (+8.8%) and materials (+8.7%) have seen the biggest increases month-to-date in the S&P 500. Dow transports up 7.9% so far this month (page 45)
- Turn higher in consumer discretionary stocks allaying fears of spending slowdown. Industrials & materials outperforming, no signs of investment slowdown here. Homebuilders up 11.0% so far this month, despite jump in mortgage rates. Indeed, the rally in the S&P 500 has broadened this month, according to the equal-weighted index (pages 42-52)
- Information technology still outperforming YTD, up 40.9%, and looks set to take out the previous high of December 27th 2021 (page 48)
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