Tensions are on the rise as North Korea again threatens retaliation against the United States stating it has the capacity to test a hydrogen bomb. Devastation from such weapons can range up to 50,000x more deadly than current missile tests conducted by the seemingly hostile state. Following Fed speeches and recent inflation data, market participants are pricing in a greater than 70% chance the Federal Reserve raises interest rates by the end of 2017. Other foreign news comes on the political front with New Zealand’s general election polls closing Saturday and Germany’s federal election kicking off Sunday expecting to result in Merkel’s fourth term as Chancellor.
Major U.S. large company indices traded in a tight range this week as markets remained resilient in the face of new geo political unrest, additional natural disasters and the third quarter 2017 nearing a close. Many fixed income investments fell and financial stocks gained with the Treasury yield curve rising in several trading sessions. The financial sector of the S&P 500 index has posted its strongest two week gain since the period following the U.S. election in November. International developed stocks were boosted by strong economic data although emerging markets experienced a meaningful weekly decline.
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