Stocks End Higher than 2022 Peak

After the close on Thursday, stocks closed at the highest levels since 2022. All shares from manufacturers to oil producers showed impressive gains. In recent weeks, markets have been optimistic and showing an upward trend. Despite the Federal Reserve increasing interest rates in its fastest series of increases since the 1980s, investors have been cheerful about data that has shown the U.S. economy continues to hold firm. Only time will tell whether this trend of upward momentum will continue.  

China’s Economy

While the US is hard at work battling inflation (and winning, as we are currently far closer to the 2% target compared to a year ago), China is fighting a vastly different issue: sluggish growth. Growth in industrial output and retail sales fell short of expectations, while the pace of contraction in the already-pressured Chinese real estate market worsened through decreased investments and property sales. To combat these headwinds, the Public Bank of China is taking the exact opposite approach of its American and European counterparts by lowering its lending rates by 0.1 percentage points to 2.65%. Chinese equities responded favorably to this news, with the Hang Seng China Enterprises Index and CSI 300 rising 2.2% and 1.6% respectively.

Holding Interest Rate Hikes

On Wednesday (6/14), Jerome Powell announced that the FED is going to be keeping interest rates at the same level of 5-5.25%. This comes off the basis of economic data showing that inflation is coming down, though still not at the 2% target rate that they wanted. The FOMC is continuing to monitor the situation and will take things meeting by meeting. They are expecting two more hikes by the end of the year at 50 bps in total.

Consumer Price Index and Producer Pirce Index