Economic data included rises in consumer and producer prices, which were expected, but still not necessarily celebrated. Though, existing home sales and consumer confidence showed some improvement.

Equities saw positive results around the world, with renewed hopes for a U.S.-Iran deal and progress towards a Strait of Hormuz reopening. Bonds also rose with inflation-related yields coming back down a bit. Commodities weakened on the back of oil prices normalizing downward, due to the same Middle East expectations.

U.S. stocks were mixed by mid-week as U.S.-Iran rhetoric having ramped up again, as well as inflation reports reminding investors about the price impact of continued tensions, but improved with hopes of a completed peace deal, threatened military strikes from the U.S. that were walked back, and continued tech optimism. (A deal being reached over the weekend has pushed stock futures up and oil prices down so far this morning.)

Nearly every sector ended in the positive last week, aside from a drop of a few percent in communications and slight decline in energy. Leaders included the eclectic mix of materials (copper mining), consumer staples, and financials. Real estate also gained over a percent for the week. Small cap stocks outperformed large caps by several percent, in keeping with greater risk-taking by investors. The largest-ever IPO for SpaceX was the primary single-stock news of the week, with the $135 IPO price moving to an opening price of $150, with Friday trading showing a 20% spike. As under 5% of the total company was floated in the IPO, it implied a near-$2 tril. market value.

Foreign stocks performed largely in line with the U.S. last week, with hopes for a Strait of Hormuz opening boosting sentiment along with potential oil flows. The ECB raised interest rates by 0.25% last week, the first major central bank to hike, calling the move “obvious and sensible” considering inflation running over 3% and expecting to run above target for much of the next year. However, questions from other observers focus on the potential demand destruction from high oil prices on economic growth, which could ultimately justify the opposite response (and what the ECB has ultimately done in several of the last few cycles). It’s possible the Bank of Japan will hike as well, although trying to stabilize a weaker yen is a larger consideration there. Emerging markets were mixed, with returns country-specific, and showing no clear pattern.

Bonds fared positively around the world, as interest rates broadly fell—this was in line with hopes for eased future inflation that offset the more negative U.S. CPI and PPI reports that showed strong negative impacts from the oil price spike in recent months. Investment-grade and high yield outperformed governments slightly, while emerging market debt benefitted from positive risk-taking sentiment for the week.

Commodities pulled back as a whole, due to energy prices falling back, followed by weakness in precious metals. West Texas crude oil and Brent crude prices each declined by -7% last week to $84/barrel and $87/barrel, respectively, along with the broader theme of hopes of a Middle East peace deal.

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Sources:  LSA Portfolio Analytics, American Association for Individual Investors (AAII), Associated Press, Barclays Capital, Bloomberg, Deutsche Bank, FactSet, Financial Times, Goldman Sachs, JPMorgan Asset Management, Kiplinger’s, Marketfield Asset Management, Minyanville, Morgan Stanley, MSCI, Morningstar, Northern Trust, Oppenheimer Funds, Payden & Rygel, PIMCO, Rafferty Capital Markets, LLC, Schroder’s, Standard & Poor’s, The Conference Board, Thomson Reuters, U.S. Bureau of Economic Analysis, U.S. Federal Reserve, Wells Capital Management, Yahoo!, Zacks Investment Research.  Index performance is shown as total return, which includes dividends, with the exception of MSCI-EM, which is quoted as price return/excluding dividends.  Performance for the MSCI-EAFE and MSCI-EM indexes is quoted in U.S. Dollar investor terms.

The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness.  All information and opinions expressed are subject to change without notice.  Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product.