Inflation data and strong financial earnings from a few major banks dominated coverage toward the end of the second week in July. Fed Chair, Janet Yellen, concluded a two-day congressional testimony which was interpreted as dovish while central bank talks have been the opposite in recent weeks. Both inflation and retail sales coming in below expectation has markets rethinking the pace of interest rate hikes. Globally, the U.K. posted the lowest level of unemployment since 1975 although real wages declined, and the country acknowledged for the first time in writing it will pay settlement to exit the EU. The Bank of Canada raised its benchmark interest rate for the first time in seven years.

On the backs of Yellen’s testimony to Congress, domestic markets rallied to new all time highs in both the S&P 500 Index and Dow Jones Industrial Average with the interpretation rate hikes may be more gradual if inflation does not pick up. Treasury yields declined during the week pushing returns on fixed income securities higher. International stocks continued the outperformance thus far in 2017 against domestic equities during the week with emerging markets leading gains over all asset classes. Constituents of the commodity index had mixed results however oil and gold, two of the largest components, both advanced pushing returns higher during the week.

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