The rise in equity indices continued this week, with a rise of 1.3% on the Stoxx600 and an increase of 0.7% on the S&P500.

This week was marked by the announcement of Donald Trump's tax reform, which provides for drastic corporate tax cuts (20% tax rate on corporates), a reduction in the number of tax brackets from seven to three with a maximum tax rate down for the wealthiest households and also measures for middle-class households.

The stoxx600 NR, which broke its trading range last week, continued to rise by 0.68% this week after the publication of a strong PMI activity indices in the Eurozone, notably in France and Germany.

Germany, which is about to vote on Sunday, but there is little suspense, Chancellor Merkel having a very strong lead over his main rival Mr Schulz (SPD), all the uncertainty lies in the coalition which will depend on the scores of the different parties including that of Mrs Merkel, the CDU.

European markets were out of their trading range this week and ended up sharply up (SXXR: + 1.4%), as did the S&P500 (+ 1.6%).

This bullish break out, which had been anticipated by the DAX the previous week, was mainly driven by the cyclical sectors (Automotive in the first place, which benefited from the announcements of the Frankfurt show) and the financials, while rates were back on the rise this week.

The markets ended once again on a stable note (Stoxx600: -0.1% and S & P500: -0.6%) after a difficult start to the week following the North Korean nuclear test. Market reaction was ultimately more measured than expected, and investors seem to continue betting on a diplomatic outcome.

This week was marked by greater volatility in the indices, particularly the Stoxx600NR, which ended with a 0.6% rise after a start of the week under pressure, due to the rise in the Euro, which surpassed the 1.20 level before to return to 1.18 / 1.19 on the weekend.

The stock market was rather quiet this week, both in the US and Europe where the indices ended on a slightly positive note (Stoxx600: +0% and S&P500: +0.8%).

The geopolitical tensions decreased a notch, despite the military drills held since Monday between the US and South Korea for a period of 10 days.

Markets partially offset the last week decline without invalidating the downward short term trend, with a 0,6% increase for the stoxx600 and a -0,65% decrease for the S&P500.

Latam outperforms (LATAM) : weekly data

The stabilization is mainly due to the beginning of a thaw between North Korea, which has for the moment postponed its project to send missiles to the island of Guam, and the United States which welcomed this first gesture of appeasement.

This week was clearly a period of strong consolidation for the European equity markets (Stoxx600: -2.6%), US (S & P500: -1.4%) as well as the main emerging markets.

European Banks (BNK) under pressure this week (weekly data)

One reason for this is the escalation of the warmonger rhetoric between the US and North Korea, which now threatens US missile shots at Guam in the Pacific, while Donald Trump hardens its position leaving less room for a diplomatic solution.

Markets confirmed this week some decorrelation / fragmentation among the major indices.

First of all in the US, as the Dow Jones 30 continues its progression mainly driven by 3 stocks (Apple, Nike and Intel) that allow it to set a new historical record and break the 22000 pts level, while the Nasdaq and The S & P500 remained stable.

This week was full of contradictions, which lead once again to flatness (-0,5% for the Stoxx600 and flat for the S&P500).

It was also a rich enough period with both positive and negative developments. Firstly, the Q2 corporate results are so far of good quality and exceed the expectations in Europe and the USA with encouraging prospects for the second half of the year, which is excellent news confirming a new cycle of rising profits has begun, and is expected to translate into a virtuous circle of lowering unemployment, rising consumption and increasing investment.