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Week in Review: 10-14 April 2023

Summary and Comment

Another calm week on the markets, with news of slowing CPI in the US (0.1% MoM) and US retail sales falling more than expected. The producer prices for final demand in the US (PPI) fell 0.5% MoM in March of 2023, the biggest decline since April of 2020. The economy is slowing, no doubt.

For the week, stock markets are essentially flat, with small caps rising a bit more than big caps. Prices seem to be consolidating around current values, and markets are orderly/stable, unless some big event triggers a sell-off. Gold is holding around the 2000$/oz, and silver gained a bit (the metals are getting overbought and a slight correction can be expected). Oil is holding around 80-85$/barrel, while natural gas rose ~5%.

The relative strength of the US dollar declined by ~0.5%, and we can highlight the rise of the eur/usd by ~0.9%. US bond yields rose ~3% this week, and the yield curve is peaking at 5.09% in July 2023. The yield curve is showing first signs of un-inversion, typically associated with recession and economic downturns within a few months to a year.

Any investments in equities/businesses should have an increased focus on the strength of the balance sheet of the company (low debt) and resilience in earnings (as well as pricing power in an inflationary environment). Alternative investments are bonds, which have more attractive yields these days. Precious metals in your possession are also a safe haven, and have been appreciating (spot price) relative to the US dollar (which is losing purchasing power).

Source:

https://tradingeconomics.com/

 

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