Strong revised retail sales pushed rates higher this week and the 10-Year Treasury broke the 3.10% level. International relations were notable this week as North Korea expressed reservations about a summit meeting with the U.S. after National Security Advisor John Bolton stated that the U.S. would use a “Libya model” in its approach to denuclearizing North Korea. Earlier in the week, the U.S. opened its new embassy in Jerusalem and violent protests that led to 59 Palestinian deaths erupted in the Gaza Strip. President Trump continues to negotiate trade with China following an offer to assist in efforts to save failing Chinese telecommunications company ZTE.
Small cap stocks dominated last week as U.S. large cap, international, and emerging markets were all down on higher U.S. rates and a stronger dollar. U.S. large cap stock losses were on the heels of a strong run, but emerging market stocks continued their downslide and the index is now at a loss for the year. Bonds prices slid under the upward movement of higher rates and emerging market bonds were slammed – now down nearly 10% on a trailing month basis. Oil prices ended another week higher on market tightness and Iran concerns.
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