It was a winning week for the Dow, though you’d never know it from the news on Wall Street. This week was dominated by concerns over China’s currency devaluation, which many saw as the first sign of an impending “currency war.” Oil prices also hit their lowest levels since 2009, and have lost an astonishing 56% in the past year!
***DOW UP 103 POINTS THIS WEEK
Monday Wall Street seemed refreshed as the markets finally saw a 7-day losing streak come to an end. Investors were encouraged by some news from Greece where euro zone officials suggested banks could get their first infusion of cash shortly, even prior to passing a stress test from the European central bank. The Dow bounced back, gaining 241 points for the day.
Tuesday the market was sharply lower after a surprise devaluation of the Chinese Yuan. The main Chinese currency dropped 1.9% against the dollar, igniting fears of a “currency war.” Oil prices added to the problem, as they moved down 4% to just above $43 per barrel. Almost all of Monday’s gains were erased as the Dow went down 212 points.
Wednesday stocks finished flat as investors continued to show concern over global growth. Early in the morning the Dow dropped 277 points before an afternoon rally raised it back to its starting point. The yuan dropped another 1.6% as China embarks on new economic policies. Oil climbed back to $43 a barrel. After a tumultuous, volatile day, the Dow finished exactly where it started—not gaining or losing a single point!
Thursday U.S markets held a range of positions as investors digested numerous data reports. Oil prices slipped again, this time to $42 a barrel. Weekly jobless claims came in higher than expected at 274,000. Over in Europe, major equity markets moved up due to progress on Greece’s latest bailout deal. For the day, the Dow finished up with a modest gain of 5 points.
Friday the market moved up as investors reacted to a 0.2% increase in the U.S. Producer Price Index—a leading indicator of inflation. Inflation has hovered below the Federal Reserve’s goal of 2% for some time now, so this data was seen as a good sign of normalization. Industrial production and consumer confidence also saw modest increases. For the day, the Dow was up 69 points.
