Here is what happened in the Capital Markets this week.
The Weekly Bottom Line (please click link to open)
The Weekly Bottom Line, courtesy of TD Economics, includes a review of market performances, recent key economic indicators, a calendar of upcoming key economic releases, and other relevant data. The highlights from this week’s report include:
· U.S. equity markets were unbowed by escalating trade actions between the U.S. and China this week. The S&P500 reached new highs bolstered by healthy earnings reports and growth in share buybacks.
· Equity market optimism is backed up by an economy set to grow by an impressive 2.9% this year, boosted by fiscal stimulus. The Fed is expected to respond to consistently above-trend growth with another 25 basis point rate hike next week, taking the upper limit of the fed funds rate to 2.25%.
· Our latest forecast does not include the impacts of the latest tit for tat tariffs between the U.S. and China. If the current tranche plays out as planned, it could weigh notably on growth at the same time as the fiscal sugar rush fades.