The below is an excerpt from tonight's edition of The Closer, sent to Bespoke Premium and Institutional clients each night along with graphs, analysis, and timing models for both single name equities and the market as a whole.
The markets came off the 4th of July this weekend on a poor footing with the worst losses in over a month on Monday and Tuesday. Wednesday was a turnaround on behalf of the Fed minutes, which threw fuel on the fire of a bond rally that had been underway since Treasuries started trading in the wee hours of Monday morning. That rally totally reversed a move higher in yields the week before thanks to strong employment data. Global economic data moved south and worries over Portuguese lender Banco Espirito Santos created a huge (by recent low volatility standards) move in global equities and yet more positive price action in lower risk bonds. But the US equity bid persisted in the face of foreign worries with markets climbing off their morning lows Thursday and climbing modestly Friday.
Alcoa (AA) and Wells Fargo (WF) got the second quarter earnings party started with better-than-expected results. The week was a boring one in terms of economic data for the United States. Overall, markets were down the most on the week since April, and the Vix kicked up from its lowest close since 2007. Credit spreads also widened, and the USD edged higher thanks to concerns over global growth and European instability. Data releases will once again grab hold of headlines in the US next week with a variety of output indices, price data and housing data set for release throughout the week. Bespoke will be back on Monday morning with The Morning Lineup. Have a great weekend!