The main indices rose significantly at the end of last week and this stopped the long series of seven weeks in the red zone (the longest negative series for the last ten years). The issues with inflation and the next step of Fed’s tightening remain on the front, but are still far away. Meanwhile, investors added approximately $20 billion in equity funds, according to Bloomberg. As an additional catalyst came the common perception that the American user will overcome, most likely, the price pressure along with the improving global supply chain.

 

Bonds

Bloomberg Aggregate Bond Index ended higher for a third consecutive week because bonds continue to rise, while recovering from the toughest annual beginning for fifty years. The yields of 10-year bonds continue to decrease although with lower rates. Investors expect an economic slowdown because of the Fed’s hawkish monetary policy. Corporate bonds, which are tracked by the Bloomberg High Yield Index, also finished very well the week, but they still are left in the negative zone according to the annual basis.

 

Commodities

The prices of natural gas continued to rise this year and finished solidly in the green zone for a second consecutive week, with the crude oil joining the rally. The European Union’s sanctions and tariffs on the Russian oil continue to put pressure on the global prices of energy. Metals such as gold, silver, and copper moved in different directions after they lost ground earlier this month.

 

What is Expected to Happen This Week

• NFP

On Friday, data about employment in the non-agricultural sector will be published. Economists expect that there will be 320 000 new jobs comparing to 428 000, which were announced in April. Despite this, the labor market remains stable. If the expectations are correct, this will be the lowest job growth rate for about a year.

• A possibility exists that the markets will continue its growth!

It is very likely that the increase will continue. The better economic indicators lead to the expectations that the Fed will not act aggressively. The data on Friday shows that the consumers spending rose more than the expected amount and that inflation is slowing down.

 

During the next week, the focus of investors will be the statements of different member of the Fed about economic perspectives.

 

If you are interested in the investment opportunities which Compass Invest Management Company can provide to you, please contact us for a free financial consultation according to your personal financial situation here.

 

Disclaimer:

This information is marketing material and does not present investment consultation, advice, investment research, or investment recommendation. The information is valid as of the issue date of the marketing material and may alter in the future. The value of the units in the collective investment schemes changes over time and it could be higher or lower from the value at the time of the investment. No profits are guaranteed and risk exists for the investors to not receive the full amount of their investments. Investments are not guaranteed by a guarantee fund which is created by the country or another form of guarantee. Information on the performance of the financial instruments in the past is not a reliable indicator for future performance. Therefore, it is recommended for investors to acquaint themselves with the Prospectus and the Document with key information for investors before making a final investment decision. You can find these documents in Bulgarian on the website of Compass Invest - www.compass-invest.eu, and you can request and get a free paper copy at the office of the management company at: Sofia, 19 George Washington Str, floor 2, during every business day from 9 am to 5 pm. Future results are subject to taxation, which depends on the personal situation of each investor and may change in the future. A summary of the rights of the investors is available at the following hyperlink in Bulgarian: here. The mutual funds, which are managed by Compass Invest, are actively managed without following an index. We would like to inform you that Management Company Compass Invest can make a decision to terminate the offering of funds on the territory of the Republic of Bulgaria. The investment in units of mutual funds, in addition to benefits, carries certain risks like: liquid, operational, interest, currency, and political risk, as well as macroeconomical risk, currency risk, concentration risk, etc. The full information about risks can be found in the Prospectus of the respective fund.