By James Dondero | May 26, 2015
- The theme of deflation reasserted itself last week, with the dollar bouncing and commodities moving lower. The Yen and Euro moved lower as well, all serving to reinforce the possibility of these trends going forward.
- Interest rates again moved lower last week, and while only time will tell, it continues to look as if yields are setting the upper boundary of a trading range. Additionally, we would expect yields to trend lower should a deflationary environment persist.
- The action with stocks was far less decisive last week, with most of the broad market averages flirting with new highs. That being said, transportation stocks are clearly feeling the effect of rising crude oil, and are now being a drag on the market.
- Finally, the picture within the emerging markets is also quite ‘mixed’. Specifically, markets in China remain quite strong, while countries that rely on exporting commodities, such as Brazil, remain in downtrends.