Global Markets Respond to Strong US Economic Data and Persistent Inflation in Europe


Global Markets Respond to Strong US Economic Data and Persistent Inflation in Europe

Monday, July 3, 2023 By Vincent David-Robin

The economic data released in the US last week indicated a strong and robust economy. Durable goods orders, new home sales, GDP, and weekly unemployment claims all showed positive signs, suggesting that the economy is progressing at a brisk pace.

Across the Atlantic, inflation readings across European countries revealed that inflation remained stubbornly high and rather steady.

Equity Markets Rally on Positive Economic News

Equity markets had a very strong week globally. The performance of stock markets across the US, Europe, and Asia ranged from +2% to +3.5%. They are now solidly anchored in the overbought territory.

Fixed Income Markets React to Interest Rate Expectations

Fixed income markets, on the other hand, reacted as a counterweight throughout Thursday and Friday. Yields continued to slowly rise, repricing the expected path of interest rates. Speakers of both the Federal Reserve (Fed) and the European Central Bank (ECB) reiterated the need to further hike reference rates in response to the persistently high inflation.

Commodity Markets Struggle Amid Growth Uncertainties

Commodity markets – the ambivalent asset class – exhibited mixed performance. The lack of strong growth in Asia, particularly in China, coupled with uncertainties surrounding GDP projections for Europe and the US in 2024, has shown commodities to be underperforming (and therefore, unappealing) compared to equities.

General disclosure:This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Aria Capital Management or any of its related companies to participate in any of the transactions mentioned herein. This material may contain estimates and forward-looking statements, which may include forecasts and do not represent a guarantee of future performance. This information is not intended to be complete or exhaustive and no representations or warranties, either express or implied, are made regarding the accuracy or completeness of the information contained herein. The opinions expressed are subject to change without notice. Reliance upon information in this material is at the sole discretion of the reader. Investing involves risks. Past performance does not guarantee future results. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.


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