Federal Reserve Chairman, Jerome Powell, spoke in defense of the central bank’s plan to gradually raise interest rates after criticism this week from President Trump. Traders are now convinced of two rate hikes by year end – according to CME data. Talks between the U.S. and China ended Thursday evening with no apparent breakthrough on trade, while an additional $16 billion of goods subject to tariffs went into effect for both nations. Domestic markets barely quivered on the backdrop of news this week as robust earnings and growth sent the S&P 500 passed its January record.
As the domestic large company stock index pushed ahead of its January record, Tuesday marked a nine-year bull run which is the longest in history of stock market gains. U.S. small company stocks followed suit and continued their march higher and are trouncing other asset classes in 2018. The longer end of the Treasury yield curve moved significantly lower this week, and comparatively to a month ago, offering some reprieve to fixed income investments. Dollar weakness and less political noise sparked a slight rebound in emerging markets after being battered thus far in 2018.
Click below image for larger view.