Market week: Stocks rally as bond yields fall
Renewed hopes that Fed will dial back tightening
The main North American stock indexes posted weekly gains, even as Jerome Powell, the Chair of the U.S. Federal Reserve Board told the Senate Banking Committee that a recession is “certainly a possibility,” adding that, “It’s not our intended outcome.” Reading the Fed’s tea leaves, traders took this to mean that the Fed might relax its tighter monetary policy at early signs that inflation is cooling and the economy is slowing down. Sentiment was further buoyed by a decline in bond yields, as the U.S 10-year bond ended the week at 3.125%, down from 3.3% earlier in the week.
Despite a steep decline in consumer sentiment (the University of Michigan’s Index of consumer Sentiment fell to 50 in June, the lowest on record), the S&P 500 Composite Index advanced 6.4% on the week, led by strong gains in the consumer discretionary, information technology and healthcare sectors. The Nasdaq Composite Index gained 7.5% week-over-week, as traders started bottom-fishing among the heavily sold-off growth stocks in the tech sector. Toronto’s benchmark S&P/TSX Composite Index gained only 0.7% on the week overall, as interest in the commodity trade flagged. West Texas Intermediate crude oil fell to US$107 at Friday’s close, logging a 3.1% retreat on the week, while gold dropped to US$1,828.10 at Friday’s close, for a 0.7% loss on the week.
Monitor the main stock and commodity indexes daily with the Fund Library’s interactive Markets Page.
* CIBC renames passive portfolios. CIBC announced on June 20 that it is renaming the CIBC Passive Portfolios and terminating the D series of the portfolios. The funds will now be offered under the CIBC ETF Portfolios banner and will hold CIBC Index ETFs instead of the current CIBC Index mutual funds.
The following funds have been renamed:
- CIBC Conservative Passive Portfolio becomes CIBC Conservative ETF Portfolio.
- CIBC Balanced Passive Portfolio is changed to CIBC Balanced ETF Portfolio.
- CIBC Balanced Growth Passive Portfolio is renamed CIBC Balanced Growth ETF Portfolio.
- CIBC Managed Aggressive Growth Portfolio is changed to CIBC Managed Growth Plus Portfolio.
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