Weekly Market Review:

The global market report ending February 17, 2017 showed improvement on global equities. The US economy reached record highs during the trading week, which reflected strong economic growth. The International Monetary Fund is still doing everything to help Greece with its debt issue. The Asian market is mixed, with China having trouble regarding its debt while Japan is declining, yet still improving compared to past performances.

US Economy is Showing off Strong:

US stocks closed on record highs for the week in which Dow Jones leads the most while Russell 2000 fell short. As expected, the economic data released showed very favorable figures where core consumer price index and core retail sales hiked by 0.3% and 0.6%, respectively. S&P 500 registered increased total earnings, which is an optimistic trend if this would continue for every Q4 report.

Federal Reserve Chairwoman Janet Yellen sees a possible interest rate hike by June, after her Tuesday and Wednesday congressional testimony. Analysts beg to differ as to how much the hike would be after June.

On other news, Steven Mnuchin was appointed as the new treasury secretary by US President Donald Trump. Strong business sentiment could be fueled in the coming week, as Mnuchin targets a tax reform program. Policies would be unveiled in the coming weeks.

Stock Index Closing Change from Last Week % Change
Dow Jones 20, 624.05 354.68 +1.75%
NASDAQ   5, 838.58 104.15 +1.82%
S&P 500   2, 351.16   35.06 +1.88%
Russell 2000   1, 399.86   11.02 +0.79%

 

Others Closing Change from Last Week % Change
Oil        53.37   0.01 +0.02%
Gold 1, 236.00 -5.60 -0.45%
EUR/USD           1.0615 -0.0058 -0.54%
Russell 2000      112.82 -0.42 -0.37%

 

Europe is Facing Uncertainty:

The European Commission forecasted a slowdown on economic growth for countries under the euro currency, from 1.7% last year to 1.6% for the current year. The statement expressed was due to the issues they face, which include the Brexit’s effect upon its effectivity; the US upcoming trading and economic policies; and the election results for France and Germany.

The International Monetary Fund and the European Union have a few issues, bringing about a pessimistic result for Greece’s debt bailout. The country’s creditors would likely be unhappy if IMF would not be able to grant the €7 billion. If the said amount would not be granted, the country’s debt would be unsustainable, especially now that IMF would be focusing on other political agenda such as the upcoming elections.

Stock Index Closing Change from Last Week % Change
UK FTSE 100 7, 299.96 22.04 +0.30%
Stoxx Europe 600     370.22   0.12 +0.03%
Europe Dow 1, 604.42  -4.59 -0.29%

 

Asian Market – Mixed Trading Week with Heavy Underlying Issues:

The GDP report for Japan showed improvement, reflecting a three-year stretch. For the year 2016, the GDP growth increased by 1%, which was attributed to the increased demand for export, except for domestic consumption, which is still marking improvement. Economic meetings continued last week between Prime Minister Abe and US President Trump over policies, tariffs, and surplus.

China is facing issues regarding its financial stability where the country’s increasing reliance on debt is showing drastically. The reported debt figure registered at 3.74 trillion yuan or USD 545 billion. The Chinese government seems to understand the situation; thus, they would focus on maintaining the country’s stability over the coming week to avoid further debt crises.

 

Stock Index Closing Change from Last Week % Change
Nikkei 225 19, 234.62 144.00 +0.74%
Shanghai Composite   3, 202.08  -27.54 -0.85%

 

As an investor, decisions must not be based mainly on the policies–such as tax reform—that are deemed beneficial to businesses. Such policies entail potential loss or negative impact on earnings if they do not pan out well. Market volatility should always be considered due to the different economic issues around the world. Long-term goals should be the focus. Diversification of portfolios is the best way to remain focused and balanced.