Table of Contents
S&P500 is still less than 1% off its new all time highs, but has yet to deliver this little milestone. I have wrote about that possibility and why that might actually happen already a few times (for instance here). Still it is all happening with a wall of disbelief pouring from the peoples’ mounths. Remember though that disbelief is the best possible motor of every bull market. See here for instance, where I share HSBC data on how low the number of bulls still is (23% only despite the massive rally from March lows). Let’s move onto the week’s biggest market movers…
Last week
-> Monday and Tuesday were characterized by high-tech underperformance, as the general positive sentiment around Covid-19 slightl improving trends, hopes for a vaccine soon, renewed pledge from the politicians to keep working on the next rescue bill despite being “far apart” yet and general positive sentiment towards equities sparked some rotation from recent best performers (mainly Nasdaq-listed) towards the most hit sectors (mainly represented by the Dow Jones Industrial Average (DOW) ex techs). Some of the worries about Nasdaq are indeed justified. As the FactSet data show that BigTech now accounts for as much as 25% of the whole S&P500 capitalization. Best serctor performers into the start of the week: Energy, Industrials. Best names: Catterpillar (CAT), Boeing (BA). Losers into Tuesday: Facebook (FB), Amazon (AMZN), Netflix (NFLX), Alphabet (GOOG), Microsoft (MSFT).
-> The tech-driven sell-off didn’t last long though and as soon as Wednesday markets rallied back up led by the losers named above.
-> Cisco (CSCO) was one of the negative disappointments on Thursday, and fell 11% after a disappointing forecast of a 4th consecutive revenue decline.
-> on the macro front the Thursday weekly jobless claims data came out at 963k vs. 1.1m expected – slighly better than expectations. YTD initial jobless claims look like this:
-> Effective weekly index changes: S&P500 +2.45%, Nasdaq +2.5%, EuroStoxx600 +2%, DAX +3%, Nikkei225 +2.9%.
Other markets events:
-> Bonds: US yield curve (10y-FF) moved higher ending arounf 0.6%, German curve (10Y Bunds-3M) also steepened to 0.12 with 10Y Bunds at -0.42%, High Yield Spreads stable at around 5.
-> Commodities (ex oil): Gold had it’s steepest correction in a long time, as demand fro havens slid given equities around all-time highs. Gold down 4.5% on week.
-> Currencies: DXY (Dollar Index) -0.4%% on week, EURUSD +0.40% – USD still cannot build up strenght, the much lower rates deifferential to major CCYs does it job weakening USD.
Major macro events: (times are CET):
Next Week’s major macro events:
Yours!
PC
Disclaimers: None of the ideas, views and thoughts presented here shall ever be taken as a recommendation to buy or sell stocks,bonds,FX,commodities or any other financial instruments as stated in REGULATION (EU) No 596/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC or the Regulation of the Polish Minister of Finance of 19 October 2005 on information constituting recommendations regarding financial instruments, their issuers or exhibitors (Journal of Laws of 2005, No. 206, item 1715) or the Polish Act of 10 February 2017 amending the act on trading in financial instruments and some other acts. The article is for educational reasons and purely presents private views of the author, thus the author shall not be claimed eligibile for any losses of a third party resulting from trading activities based upon this article. The author uses his best knowledge and data from sources believed to be reliable, but makes no representations as to the accuracy of the data.Full Disclaimers&Liability Limitations page.
