Summary:
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S&P500 smashes through 2900 to new YTD peak
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Risk-on flows come after Chinese data
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DE30: Legal woes continue to pressure Bayer stock
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3 markets to watch; DE30, EURUSD and GBPUSD
The week on the whole had been fairly uneventful for US stock benchmarks with the S&P500 trading in a narrow range of a little over 20 points from 2877-2900 before this morning saw the market make a potentially decisive break higher. At the 5th attempt price managed to break above the key psychological 2900 handle and since then the market has extended to the upside and reached a new peak for the year.
The March M2 money supply rose by 8.6% Y/Y vs 8.2% expected while new yuan loans came in at 1.69B vs 1.20B expected. Compared to levels seen in recent years these figures aren’t actually that elevated, but they do represent a pick-up compared to the latest numbers and suggest the world’s second largest economy is scaling back on its deleveraging efforts in a bid to bolster growth. In itself this data could be described as only mildly supportive of risk assets but the clear positive market reaction reveals how both equities and crude oil retain a heightened sensitivity to good news at present, while looking through any negatives - a pleasing scenario for Bulls.
Bayer (BAYN.DE) continues to struggle with legal woes concerning Roundup weedkiller, a product of the company it has acquired. Up to now the only trials that made it to the headlines concerned ruling in the US. A court in France issued unfavourable reading for Bayer as well. One of Monsanto's products (other than Roundup!) was found to be the cause of the diseases that affected one of the French farmers. However, the company said it will appeal.
Our 3 markets to watch next week focuses on the DE30, EURUSD and GBPUSD. Read more here.
