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After last week’s Fed-induced euphoria, traders were a bit more on edge over the last few sessions. Much of what tempered outlook on the week came from some old foes – rising geopolitical tensions in the Middle East and trade issues with China. Both of these points managed to pull the market in either direction this week. Traders were looking forward to the G-20 meeting as well as positive comments made on U.S./China trade negotiations. However, continued escalation in the Middle East with Iran made for a bumpy ride.
As did comments by the Federal Reserve. Last week, the Fed gave the market what it wanted in terms of a pause in rates and it signaled that cuts could be coming. However, this week, the Fed seemed to backtrack those comments and indicated that it wasn’t sure if it would cut rates at its next meeting.
Data seemed to support a Fed cut, however. This week, several key economic metrics – from consumer confidence to housing data as well as manufacturing metrics – all say big declines and missed estimates. Light earnings and a lack of big corporate actions also couldn’t help send stocks higher for most of the week.
All in all, stocks spent much of the week treading water,
Be sure to check out our previous Wrap here, when Powell gave the market a gift.