18 June 2018
Bassanese Bites: The Greenback is back – Week beginning: 18 June 2018
It was a generally soggy week for global equities thanks to Trump’s renewed trade war with China and a hawkish Fed Reserve meeting. While the S&P 500 was flat last week, however, the tech heavy NASDAQ-100 rose 1.4% and continued to push to new record highs. US tech has been a favourite of mine for some time, as evident most recently here.
As expected, the US-North Korea summit came and went with little lasting market impact – as negotiations are likely to drag on for some time. Instead, the real highlight was the Fed’s “dot points” which now suggest America’s central bank is thinking of two further rate rises this year instead of only one. This knocked stocks but pushed up the $US, weakening commodity prices (including gold) and emerging markets in its wake. The $A also dropped, ending at its lowest weekly close since June 2017. Trump’s decision to impose US $50 billion worth of tariffs on Chinese imports – and China’s quick retaliation – initially hurt US stocks on Friday, though they largely recovered as traders concluded this was just another negotiating tactic.
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