Markets In-Review: Markets Continue To Gain On Positive Macro Data

? Strong macro aids stock markets recover from negative start of 2016

? S&P records another 1.6% weekly gain, coming closer to key technical level

? European equity concludes in the green, as positive momentum picks up towards weekend

? GBP/USD comes close to 30 year low amid Brexit concerns

While some substantial turbulence has been recorded in equity markets this week, backwind from positive macro data helped keep it in the green. U.S. macro included a subdued Initial Jobless Claims print at 272K. Stronger Friday figures included the fourth quarter’s GDP figure being revised upwards, to a 1% quarterly gain, from a 0.7% preliminary estimate. January’s Personal Income print saw a 0.5% month over month gain, as did personal spending. And the University of Michigan’s Consumer Sentiment Index ascended to a level of 91.7 points, from a 90.7 previous estimate.

The S&P 500 (SPY) added a total of 1.6% during the week. Concluding a 6% rally since February 11th has helped the leading index edge to just 4% lower than its 200 day moving average, the closest it has been to the key technical indicator since the early days of January. The positive momentum was evident in other U.S. indices with the Dow (DIA) adding 1.5% during the week and the Nasdaq (QQQ) recovering by an impressive 1.9%, concluding more than a 9% rally from February’s lows. While some indication for fear were evident during the week, seeing the CBOE VIX index spike to as high as 22.87 on Wednesday, these faded towards the weekend concluding at the fairly low level of 19.81.

Across the Atlantic, European markets suffered some substantial volatility but concluded in the green. A 2.45% weekly gain was recorded at the FTSE 100, thanks to a 3.9% rally between Thursday and Friday. The DAX, similarly, increased 1.33% during the week. 3.77% of this during the last two days of the week.

Markets hope for change, but past concerns persist

With accommodative monetary policy having less and less of a positive effect on the global economy, and increasingly more side effects, market participants hoped for a resolution from the G20 high level seminal on structural reform held in Shanghai. And indeed some encouraging signs were provided. These included commentary from Germany Finance Minister Wolfgang Schäuble who rejected the concept of coordinated fiscal stimulus, arguing, alternatively, that structural reforms are the answer.