Stocks around the globe rallied this week on the back of solid earnings and stronger than expected data on the economic front. In the U.S., the S&P 500 was higher by about 0.50%, while the Russell 2000 (small cap index) was higher by more than 2% as regional banks led the way. On the international front, the MSCI EAFE was higher by about 0.40%. Meanwhile, interest rates were higher on the week, with the yield on the 10-year Treasury note hovering around 4.90%.
On the data front, retail sales for September came in much better than expected, rising 0.7% in September against forecasts for a 0.3% increase. On a year-over-year basis, retail sales rose 3.8%, compared to inflation which has risen by 3.7%. This indicates consumer spending has more than kept up with inflation. Overseas, inflation in the eurozone was reported in line with expectations, while China’s third-quarter GDP came in stronger than expected. In commodities, crude oil prices moved higher this week, with a barrel of WTI crude trading around $90.
It will be a busy week on the earnings front, with heavyweights such as Tesla and Netflix reporting after the close on Wednesday. In the early stages, earnings have been better than expected and will be closely followed in the coming days, with a particular focus on margins.
Source: GSAM, CNBC, JPMorgan
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