Global headlines, central banks, and solid employment data shaped the markets in a short holiday week. Geopolitical risks increased as North Korea announced on Tuesday that it successfully launched an intercontinental ballistic missile and the US and South Korea responded that each was ready for war if provoked. This set the backdrop for the G20 summit and the first meeting between Trump and Putin. Both the Federal Reserve and European Central Bank released minutes indicating that the era of extraordinary support to the markets is on track to end. Meanwhile, the US jobs data showed strength with payrolls increasing more than anticipated and new entrants joining the labor pool.
Large and small cap US stocks ended the week close to where they started with the jobs data offsetting global concerns. International stocks ended the week down as the markets continue to absorb that the era of easy money in Europe will eventually come to an end. Along that same theme, yields across the board rose causing bond prices to fall. The Bloomberg Barclays Aggregate Bond Index dropped by nearly a half a percent by the end of the week. Commodities extended their rout and continue to be the worst performing asset class on a five year basis.