Week Ending July 9th, 2021

Congratulations to Richard Branson and Virgin Galactic. It will be interesting to see in near future, how space tourism industry develops.

Last week was kind of net positive week for major stock indices even after some minor pullbacks. The downward move in the US 10 year treasury yield caught the attention last week as the yield touched almost 1.25% on last Thursday before advancing to 1.35 % on Friday. It appears that rising inflation concerns as expected by me and many others are not reflected by the treasury yields. Many of the market watchers are blaming the move in the yield on weak economic growth expectations ahead as reflected by some economic data including purchasing managers survey for the service sector, which fell to 60.1 in June from 64 in May.

The Fed minutes of June meeting released Wednesday showed that Fed officials expected to cut back on bond purchases earlier than expected as growth has been very strong so far. Well there was nothing unusual or unanticipated in the fed minutes in my view, the minutes confirmed the robust discussions on forward path of the policy.

Let's see how this coming week unfolds as many major banks are going to report earnings along with CPI report on Tuesday and retail sales report on Friday.