■ S&P 500 adds 0.6% weekly in volatile trading session

■ Strong Q2 reports by IBM, Microsoft (MSFT) aid U.S. high-tech stocks

■ Edgy U.S. sovereign yields signal support for equity may prove temporary

■ Minor gains recorded at E.U. equity as ECB keeps policy on course

Positive equity momentum was still evident at markets this week, though at substantially weaker levels than we’ve seen recently. The S&P 500 kicked off the week at around 2,160 points, climbed on Wednesday to the 2,175 level, down to 2159.75 on Thursday, then back up, concluding Friday’s at 2175.03 – a total weekly increase of 0.6%. Concluding a fourth consecutive week of gains did aid the index set a new all-time high, about half a point above Friday’s closing level. But on the other hand, the volatile session was largely motivated by trading volume that’s rather low, at an average of 516 M shares per day vs. 583 M in the two weeks prior.

A stronger 1.4% weekly increase has been recorded at the Nasdaq, pushing the index to a mere 2.3% away from its all-time daily high of 5,218 points, which was reached about a year ago. What appears to be a fairly solid earnings season also aided high-tech during the session. This included IBM kicking off the week by managing to mildly surpass expectation at an EPS of 2.95 and Microsoft reporting on Tuesday an EPS of 0.69 vs a consensus of about 0.58.

Global yields not in Kansas anymore

Monetary support or at least expectations of, fueling the aforementioned mild gain in U.S. equity was provided by a fairly edgy sovereign bond market. The yield of the U.S. 10 year did hover around its ultra-low 1.55% for most of the week. On the other hand, it also spiked quite rabidly from time to time, hitting as high as 1.6266%. While the U.S. economy does appear somewhat firm at the moment, this does beg the question of how equity markets will come with a more, well, normal policy.

The ECB, meanwhile, refused to blink, announcing no change at its rate announcement, Thursday. Not changing the capital key did mean that the ECB will continue to purchase much of the German bunds still in the wild, leading the German 10 year bund yield, which moves inversely to its price, down, back into negative territory. It ended the week at -0.03%. This did aid the DAX accomplish a 0.8% weekly increase. The same, however, cannot be said for much of the rest of the Eurozone, with the CAC 40 and the Italian FTSE MIB adding a fairly negligible 0.2%.