Colors: Orange Color

While equity markets have regained their footing a bit despite the fact that US tariffs on $34bn worth of Chinese goods went into effect on Friday, investors are still nervous over a potential trade war escalation. The equity market lacks good upside catalysts to push the S&P 500 through the 2,800 resistance level. However, many investors are hoping that the Q2 earnings season – starting tomorrow – could be their salvation. On an individual basis the earnings season can carry certain pockets higher amid strong earnings growth with most likely industries being Software & Internet, Health Care, Retailing and Energy. On an aggregate level, we believe the earnings season will fail to become the fuel necessary for new highs.

US markets ended the week on a positive note driven by economic strength and solid quarterly earnings. Further, trade war between the two largest economies remained in the headlines as US announced another round of potential tariffs on Chinese imports last week.

A recent report by Global Innovation Index 2017 stated that UAE ranks 1st in MENA region in terms of innovation. The United Arab Emirates has always adopted an innovative methodology, noting that innovation has become a future necessity for the development of world nations. And with the introduction of Value Added Tax (VAT) this year, UAE is all set to incorporate innovation across VAT legislations to be able to lead as a global VAT player.

Currencies

Hammer candle stick on daily chart

The Euro closed lower against the U.S. Dollar last week but still sees a significant amount of support underneath, especially near the 1.15 level underneath. The Greenback was primarily supported by stronger-than-expected producer and consumer inflation data which likely kept the Fed on track for further rate hikes later this year.