US growth revised up
The second look at first-quarter growth in the United States was somewhat brighter than the first. Gross domestic product expanded at an annual rate of 1.2%, according to the Bureau of Economic Analysis, up from an initial 0.7% reading. After revisions, consumer spending was a bit stronger than the initial report, though capital expenditures were less robust.


China’s credit rating cut
For the first time in nearly three decades, Moody’s has downgraded China’s sovereign credit rating. The rating now stands at A1, with a stable outlook. Moody’s cited rising liabilities and weakening financial strength as reasons for the cut. China’s finance ministry dismissed the move as “groundless.”


UK terror threat level raised
Following an attack outside an arena in Manchester that killed 22 and injured scores more Monday, British prime minister Theresa May put the country on its highest alert level, warning of the potential for an imminent follow-on attack. The general election campaign was suspended, but was expected to resume on 26 May. In the wake of the attack the prime minister will cut short her participation in the G7 summit in Sicily this weekend.


US equities set fresh records
Upbeat corporate earnings and positive economic data helped underpin a continued rally in US equities, with both the S&P 500 Index and the Nasdaq Composite Index hitting fresh all-time highs on Thursday.


War of words heats up ahead of Brexit talks
Officials from the European Union and the United Kingdom are scheduled on 19 June to commence negotiations on the UK's exit from the European Union. Both sides are setting out fairly extreme positions in advance of the talks. The EU continues to float exit bill figures as large as €100 billion while the UK has said it may owe nothing.


Fed outlines proposed plan to shrink balance sheet
In the minutes of the May Federal Open Market Committee meeting, the US Federal Reserve began to lay out the methodology it could use to shrink the central bank’s $4.5-trillion balance sheet. Under the proposed approach, the Fed would set a gradually increasing cap on the dollar amounts of Treasury and agency securities it would allow to run off each month. The caps would be set at low levels and then raised every three months, to their fully phased-in levels. The final values of the caps would then be maintained until the size of the balance sheet was normalized.




With 477 of the S&P 500 companies having reported for Q1, earnings are expected to increase 15.3% compared with Q1 2016, according to Lipper. Stripping out the energy sector, earnings are expected to rise 11%. Revenue growth is seen up 7.3% versus a year ago, and up 5.4% ex energy.




  • G7 leaders meet in Sicily on Saturday, 27 May
  • Markets in the US and UK are closed for Memorial Day and the spring bank holiday on Monday, 29 May
  • ECB president Mario Draghi testifies before the European Parliament on Monday, 29 May
  • China reports purchasing managers’ indices on Wednesday, 31 May
  • Eurozone unemployment data are reported on Wednesday, 31 May
  • Manufacturing PMIs are released globally on Thursday, 1 June
  • The May US employment report is released on Friday, 2 June




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Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News;Financial Times;;;


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