Weekly Update - June 08, 2018
- Global stock markets turned in another mixed week, with the U.S. markets posting gains and some international markets off. High volatility persisted — attributed to trade tensions ahead of the G7 economic summit, and positioning for a widely expected interest-rate hike after next week’s Federal Open Market Committee meeting. U.S. oil prices were flat for the week, held in check by abundant domestic supply. As investors awaited the FOMC’s rate decision next week, gold prices moved up and the 10-year U.S. Treasury yield rose to about 2.95%.
- The April Job Openings and Labor Turnover (JOLTS) report came in at 6.7 million openings, higher than expected and greater than the 6.3 million unemployed in the labor market. Hires and separations changed little at 5.6 million and 5.4 million, respectively. Within separations, the quits rate was unchanged at 2.3% and the layoffs and discharges rate increased to 1.2%.
- The IHS Markit U.S. Composite PMI came in at 56.6 in May, significantly above expectations of 55.7, following April’s reading of 54.9. The reading was the result of strong growth in both the services and manufacturing sectors.
- The eurozone economy expanded 0.4% in 1Q18, following a 0.7% increase for 4Q17. Though household consumption and fixed investment continued to rise, external demand fell and accounted for the declining rate.
- Sentix reported that eurozone investor confidence came in at 9.3 for June, far below expectations of 18.5. Assessments of the current situation and six-month expectations both fell, resulting in the weakest reading since October 2016. Sentix attributed the fall mainly to Italy and trade concerns.
- The Japanese economy contracted 0.2% for 1Q18, after expanding at a 0.1% rate in 4Q17. The contraction was due to a decline in private investment and stagnating household consumption. It was the first contraction in two years. Investors had been expecting zero growth.
- Nikkei Japan Composite PMI eased to 51.7 in May, down from a six-month high in April. After starting the second quarter well, the softer number pointed to slower but still resilient growth, easing concerns about an economic slowdown after the disappointing 1Q18 GDP results.