Over the first six weeks of the third quarter equity markets in the U.S. continued to rise, albeit at a slower pace than we saw in the final two weeks of July. Fueling the rally was improving investor sentiment as signs of weakening inflation were apparent in softening commodities prices, as indicated by weaker PPI (Producer Price Index) and CPI (Consumer Price Index) data. The U.S. 10-year government bond, a key indicator of interest rates, saw its yield hovering slightly above 3.0%, below its mid-June high of 3.5%. This trend implied that interest rates may have peaked along with inflation, a bullish catalyst for equities.
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By Charles Marleau CIM® and William Mitchell CIM®
By Charles Marleau CIM® and William Mitchell CIM®