Hey hey 🙂 Summer is here finally. For most of you it’s time to take your time off and rest after hard work for most of the year. But markets never sleep. I remember very well both August 2011 and 2015, when Summer became hell for most of people, as sudden developments took most off guard and markets went crazy due to decreased liquidity, causing mispricing of many assets. In 2011 the reason was the famous downgrade of US sovereign debt rating by Standard&Poor’s to AA+ from AAA on August 5th 2011. That happened first time ever and caused an almost 15% drop in SP500 in just a few days and a lot of turmoil around the world, especially in Emerging Markets. The 2015 sell-off had actually a couple of reasons, but the most direct one was the devaluation of the yuan. Along with a slowing Chinese economy, Greek debt crisis and the effects of ending Quantitative Easing, the sudden yuan devaluation caused a very sudden 12% drop in the SP500. So be aware SmartInvestors! Don’t let anyone take you off guard 🙂
Last week
-> On Tuesday the tech-heavy Nasdaq100 broke another historical record touching the level over 10300pts intraday led by Apple (AAPL), Amazon (AMZN) and Microsoft (MSFT) who all hit fresh record highs amid optimism on the economy outwieghing concerns over Covid-19 resurgance.
-> The worries came back as soon as Wednesday though as some of the US states like Florida and Texas saw cases spike to records again. New York and New Jersey and Connecticut imposed restrictions on travel from hotspot states. SP500 dipped over 2% on that day.
-> The sentiment remained weak and got even weaker on Friday as Texas reimposed some of the restrictions due to rising cases and hospitalisations. As an effect the markets took an over 2% dive on Friday, ending at the weekly lows.
-> Effective weekly index changes: S&P500 -2.9%, Nasdaq -1.9%, EuroStoxx600 -2.0%, DAX -2.0%, Nikkei225 +0.2%.
Other markets events:
-> Bonds: US yield curve (10y-FF) was stable around 0.6% again although 10Y was better bid into the close of the week, same with the German curve (10Y Bunds-3M) which ended 0.06% with 10Y Bunds at -0.48%, High Yield Spreads at 6.3% rising slightly whole last week.
-> Commodities (ex oil): Gold ended +1.6% and was OK bid all week, as safe havens were searched for
-> Oil: slid on demand fears again ednign -2.6%
-> Currencies: DXY (Dollar Index) -0.1%, EURUSD +0.4%.
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.Categories: Investing, News&Trends
