The S&P 500 is hitting fresh highs off of a slew of positive geopolitical developments, and hope for continuing central bank accommodation.
U.S. airpower helped the Kurdish peshmerga to reclaim the Mosul Dam from ISIS. They also prevented the detonation of explosives that would have blown the damn, causing significant human and financial damage.
In Russia, Vlad Putin met with Ukraine's leadership, appearing to back off his recently aggressive stance. Stocks responded positively. As did the Russian Vector Index, which we've been discussing for some time. With basement-level Russian valuations, the patient and the bold could derive solid returns moving forward.
The housing sector appears on the mend. Reports were positive and the trend remains intact.
Expectations for benign and low interest rates from the world's central banks continue to buoy stocks. And Yellen's Jackson Hole commentary did little to persuade us otherwise. Even as the Fed considers raising the Fed Funds rate, Draghi affirmed that Euro rates will remain low for the foreseeable future. Providing cover for a Trans-Atlantic transition trade.
Finally, the recent 4% equity-market correction seems to have set a bottom, followed by a strong rebound. Such has been the pattern these last few years. Accordingly, the trend has not changed. The trajectory remains higher.
Weekly Results
Major markets finished higher last week. The DJIA rose 2.03%, the S&P 500 added 1.71%, and the Nasdaq gained 1.65%. Small cap stocks climbed 1.64%. And the 10-year Treasury bond yield rose six basis points to 2.40%. Gold lost $6.41 per ounce, or 0.49%.