Recap of US Markets

Equities give back last week’s gains

Though light, economic news was indicative of continuing recovery. Yet equity investors were in a pessimistic mood most of the week, suspecting that corporate earnings may not recover fast enough for their liking. Corporate earnings reported this week were not altogether bad. But these days when earnings fall below expectations, by even one penny, individual companies and often whole industries get hammered. Political tensions were another negative factor that depressed stocks in the week.

Political tensions help Treasuries

Treasury yields fell this week as political tensions benefited the Treasury market. Administration officials indicated that more terrorist attacks are likely…but few details of any kind are known, least of which when or where. Stock prices dropped and Treasury prices rose as investors sought risk-free U.S. government bonds as safe-haven. Economic indicators were sparse and relatively meaningless to financial market players this week.