While volatility in major equity markets dominated financial headlines this past week, quietly in the background, divergence emerged between between fears and reality. Data compiled by researchers at Jefferies indicates that as investors entered the final week of the quarter, they departed bond mutual funds and exchange-traded funds in favor of equities. Last week global bond funds experienced another week of withdrawals at nearly $4 billion, according to the New York–headquartered investment bank. This followed significantly larger withdrawals in the previous week, which was the heaviest in two years. During the same period, equity funds realized net inflows. If there is a meaning to this change in dynamics, perhaps it is that investors are much less concerned about near-term volatility drivers than they are about an impending shift in global monetary policy.
Sunday, June 28: Charles Dutoit, the principal conductor and artistic director of London’s Royal Philharmonic Orchestra, will be the guest conductor for the final performance of the Shanghai Symphony Orchestra’s 2014–’15 season. The performance will feature Dvorák’s Symphony No.9, From the New World and Mozart’s Symphony No. 39.
Monday, June 29: The outcome of emergency meetings between Greece and the Eurogroup of euro-zone finance ministers, expected to conclude Sunday evening, will dominate market sentiment on Monday as the trading week resumes. Reports surfaced on Friday that European Union policymakers are preparing a series of emergency measures including capital controls and humanitarian aid in the event that a Greek exit from the 19-nation common currency. Even if an agreement is reached, it will require a supporting vote by the parliaments of Greece and Germany, setting the stage for international political debate.
Tuesday, June 30: Revised first-quarter GDP data from the Office for National Statistics will put the U.K.’s economy under a microscope as political jockeying ahead of the national referendum on EU membership begins to heat up. While Prime Minister David Cameron has expressed optimism that the U.K. will successfully renegotiate its place in the EU, not all share his optimism. European Council President Donald Tusk stated that while EU leaders were anxious to work with the U.K., the organization’s founding principles “were not for sale.”
Wednesday, July 1: Victor, New York–headquartered spirits manufacturer Constellation Brands reports fiscal first-quarter earnings. The company’s market capitalization has doubled in recent years after the acquisition of Mexican beer brands Corona, Modelo Especial and Pacifico. climb to the third-largest seller of beer in the U.S. by volume. Earlier this month the company announced plans to invest $2 billion into expanding its Mexican production facilities.
Thursday, July 2: The Instituto Brasileiro de Geografia e Estatistica releases. Last week Brazil’s central bank released its quarterly report with a sobering forecast for a contraction of 1.1 percent for GDP in 2015 but an increase in the pace of inflation to an annualized 9 percent. Rapidly rising prices despite economic malaise creates a political headwind for President Dilma Rousseff as she struggles to deal with the massive Petrobras corruption scandal.
Friday, July 3: Final Markit services PMI for June will provide insight into the primary European economies. While Greece has provided a near constant distraction for investors, multiple indicators suggest that the European Central Bank’s easing program is starting to have its desired effect as private lending and industrial activity pick up in the region.
