The significant events in the global economy over the past week

Stocks Keep Stacking Up – It’s a Second‑Week Happy Hour

What Happened?

The U.S. equity market is still in the green zone, thanks to a 3.19% jump from the Russell 2000, followed by a 2.18% lift in the Nasdaq and a 1.17% gain on the Dow. Whole markets were up, turning what felt like a “controller and sides” rally into a full‑flagship showcase.

Tech’s Tech‑nandez

AI earnings keep the buzz alive.
Meta Partners with Constellation Energy for a 20‑year energy pact, fueling its AI ambitions.

Labor Market Buzz

May showed 139,000 new non‑farm jobs, a nice round but a shade below April. Yet it beat the market’s expectations, keeping the unemployment rate steady at 4.2% – a calm before the storm, or just a calm all the way.

While ADP noise and jobless claims hint at some dips, the bigger picture indicates the labor market is cooling more gently than feared. The result? Stock prices and Treasury yields got a lift on Friday.

Manufacturing & Services – A Mixed Bag

Manufacturing contracts for a third straight month; ISM PMI falls to 48.5%.
Services dip into contraction territory at 49.9% – their first slide in almost a year.
Both sectors keep cat‑napping on price indexes, sparking inflation anxiety.
New orders and import levels are dropping, hinting at weaker demand and ongoing trade hiccups.

Bonds – The Honest Dividing Line

Treasury yields climb a touch after the jobs data. Municipal bonds take a slight dip amid a high issuance surge. Investment‑grade corporate bonds, however, are in great shape; new offerings are heavily oversubscribed.

Bottom line: equities are dancing upside, technology’s still in the limelight, and the labor market is playing a subtle tune that’s keeping both stocks and bonds on an exciting ride. Keep your eyes peeled – the market’s still got plenty of spice left!

Europe: ECB cuts rates as economy surprises on the upside

European Markets Gently Warmed Up

Over the past week, the pan‑European STOXX Europe 600 Index nudged up 0.90%, giving a tidy little bump across the continent. The big national players shone up in lockstep: Germany’s DAX and Italy’s FTSE MIB each rose 1.28%, while France’s CAC 40 and the UK’s FTSE 100 added 0.68% and 0.75% respectively. Investors were cheered by a mix of slower inflation, healthy growth and the long‑anticipated interest‑rate cut from the European Central Bank.

ECB Cuts Rates, Signals End of Current Cycle

Deposit rate trimmed by a tidy 25 basis points to 2%.
Reason: inflation cooling and a push to keep growth ticking, especially amid global trade jitters.
Christine Lagarde hinted the policy cycle is almost bubbling over—yet future moves will stay data‑driven.

Macro Snapshot: GDP, Inflation & Industrial Pulse

Eurozone Q1 GDP now at 0.6% – the fastest pace since late 2022, thanks to Ireland’s turbo‑boost and a nicer scan from German figures.
May inflation slipped under the 2% cuff, core inflation eased to 2.3% – great news for households.
Industrial slide: German and French factories fell 1.4% in April, dragged by lagging exports and lower output.
Unexpected lift: German factory orders sprang up, hinting that domestic demand could soften the blow.

Bank of England Views: Relaxation on the Horizon?

Andrew Bailey reaffirmed that interest rates may ease with time. However, the route remains nebulous; the BoE might take a milder approach than the ECB in the short run.

Asia and emerging markets: China stimulates, Japan pauses, trade talks loom

Asia’s Stock Market Roller‑Coaster

In a classic “see‑what‑you’ll‑get” style, Tokyo traded in a bit of a down‑trend last week. The Nikkei 225 took a 0.59% dip, while the TOPIX slid 1.15%. Why? The U.S.–Japan trade talks were still feeling a bit lukewarm, with no deal inked yet. Still, the diplomats are promised to keep the conversation alive over the upcoming G7 summit—so fingers crossed!

Japan’s own numbers didn’t exactly cheer everyone up either. Household spending went down, and real wages slipped 1.8% in April. The Bank of Japan kept its cool, producing a “cautiously optimistic” outlook. They’re ready to bump up rates if inflation and growth stay on track, but for now they’ll keep a close eye on those figures.

China’s Stocks Stay Up, Even When the Economy Looks Slimy

Meanwhile, Shanghai and Beijing’s markets got a little sunny. The CSI 300 and Shanghai Composite nudged up 0.88% and 1.13% respectively, and the Hang Seng Index in Hong Kong hopped up a solid 2.16%. Even though the economy feels sluggish, the money‑market’s apparently feeling… upbeat.

Manufacturing’s Caixin PMI took the biggest hit since 2022, dragging down to 48.3. Services aren’t doing too bad, though, inching up to 51.1. The whiff of weak data has analysts pointing fingers at Beijing—maybe it’s time to kick more stimulus into action to counter the U.S. tariffs and slowing global demand?

Mixed Signals from PMI and Central Bank Moves

Official PMI had a slow flutter: manufacturing topped at 49.5 and services hovered around 50
Both stay shy of the 50‑plus expansion line
Real‑estate woes + export pressure keep China’s central bank tweaking rates and lowering reserve requirements
That 90‑day tariff pause in U.S.–China talks offers a glimmer of hope for smoother dialogue