This week, global markets saw a mix of gains and declines across various regions. U.S. stocks advanced modestly, driven by manufacturing gains and retail sales data. European markets rebounded on easing political uncertainty and potential monetary policy adjustments. Japan experienced negative returns amid uncertainty over future monetary policy. In China, mixed economic data led to a decline in stocks, while Hungary and Turkey saw notable central bank actions and political developments.
United States
- Stocks recorded modest gains over the shortened trading week, with the S&P 500 Index reaching new all-time highs.
- Value stocks outperformed growth shares, and most major benchmarks outperformed the Nasdaq Composite.
- Retail sales increased only 0.1% in May, while sales at bars, restaurants, and grocery stores fell 0.4%.
- Industrial production expanded 0.9% in May, the fastest pace in nearly a year.
- S&P Global's composite index of business activity rose to 54.6 in June, the best level in over two years.
- Bond markets saw mixed movements, with Treasury yields ending the week modestly higher.
Market Indexes
| Index | Friday's Close | Week's Change | % Change YTD |
|---|---|---|---|
| DJIA | 39,150.33 | 561.17 | 3.88% |
| S&P 500 | 5,464.62 | 33.02 | 14.57% |
| Nasdaq Composite | 17,689.36 | 0.48 | 17.84% |
| S&P MidCap 400 | 2,931.86 | 36.55 | 5.40% |
| Russell 2000 | 2,022.03 | 15.87 | -0.25% |
Europe
- The STOXX Europe 600 Index ended 0.79% higher, with major stock indexes rising.
- Germany’s DAX gained 0.90%, France’s CAC 40 Index rose 1.67%, and Italy’s FTSE MIB climbed 1.97%.
- The UK’s FTSE 100 Index added 1.12%.
- The Bank of England kept its key interest rate at 5.25%, while inflation slowed to the target of 2%.
- The Swiss National Bank cut rates to 1.25%, while Norway’s central bank held rates steady at 4.5%.
- Eurozone business activity slowed, with the HCOB Composite PMI falling to 50.8 in June.
Japan
- Japan’s stock markets generated negative returns, with the Nikkei 225 Index falling 0.6% and the TOPIX Index down 0.8%.
- The yield on the 10-year Japanese government bond rose to 0.97%.
- The nationwide core consumer price index rose 2.5% year on year in May.
- The yen weakened to around JPY 158.8 against the USD.
- Business activity stalled in June, with the composite PMI falling to 50.0.
- Japan’s exports surged 13.5% year over year in May.
China
- Chinese stocks retreated, with the Shanghai Composite Index falling 1.14% and the CSI 300 down 1.3%.
- Industrial production rose 5.6% in May, while fixed asset investment grew 4%.
- Retail sales increased 3.7% in May, and the urban unemployment rate remained steady at 5%.
- The People’s Bank of China injected RMB 182 billion into the banking system.
- New home prices fell 0.7% in May, marking the steepest month-on-month contraction in nearly a decade.
Other Key Markets
Hungary
- The National Bank of Hungary reduced its main policy rate from 7.25% to 7.00%.
- Policymakers noted an improved short-term inflation outlook and growing household consumption.
- Despite positive factors, a cautious approach to monetary policy was emphasized.
Turkey
- President Recep Tayyip Erdogan’s Justice and Development Party experienced a decrease in voter support in the March local elections.
- Erdogan called for an end to domestic political tensions and sought a constructive political atmosphere.
- Meetings with opposition leaders focused on social, economic, and geopolitical issues.
- Moves toward a more democratic society could be beneficial for Turkey.
