Stocks are mostly flat to start the week. Gold, silver, and crude oil are climbing modestly along with Treasuries. The dollar is up a bit, too, while most major cryptocurrencies are down a couple of percentage points.
Ukrainian President Volodymyr Zelensky will meet with President Trump for war talks in Washington today. He’ll be accompanied by leaders from several European countries, with all parties focused on how to bring the Russia-Ukraine conflict to an end. But Zelensky reportedly isn’t happy with the territory exchange that Russian President Vladimir Putin is proposing. Many outside observers also say it would make Ukraine vulnerable to a future Russian invasion.
Overall, defense stocks have been strong performers on both sides of the Atlantic this year. The iShares US Aerospace & Defense ETF (ITA) has risen more than 34% year-to-date, while the Select STOXX Europe Aerospace & Defense ETF (EUAD) has surged around 76%. Despite the recent peace talks, gold (a traditional “safe haven” asset) is also still holding most of its YTD gains. The SPDR Gold Shares (GLD) was up 27% through Friday.
ITA, EUAD, GLD (YTD % Change)
Data by YCharts
The second quarter earnings season is wrapping up – and the results look pretty good! Profits at S&P 500 companies rose more than 11% year-over-year in aggregate, according to Goldman Sachs Group Inc. (GS). Analysts expected a gain of just 4% heading into the reporting period. More companies beat estimates than in any quarter since Q3 2021.
Finally, the Federal Reserve will hold its annual gathering in Jackson Hole, Wyoming this week. That means Fed Chairman Jay Powell has a perfect opportunity on Friday to “frame” the interest rate debate. But as this Bloomberg story notes, the inflation picture is cloudier now thanks to the latest wholesale pricing data. Powell speaks on Friday – and Wall Street will be anxiously awaiting his comments.
