𝗧𝗵𝗲 𝘄𝗲𝗲𝗸 𝗯𝗲𝗹𝗼𝗻𝗴𝗲𝗱 𝗰𝗹𝗲𝗮𝗿𝗹𝘆 𝘁𝗼 𝗠𝗿.𝗣𝗼𝘄𝗲𝗹𝗹. 𝗪𝗵𝗮𝘁 𝗵𝗲 𝗱𝗶𝗱 𝘄𝗶𝘁𝗵 𝗵𝗶𝘀 𝗝𝗮𝗰𝗸𝘀𝗼𝗻 𝗛𝗼𝗹𝗲 𝘀𝗽𝗲𝗲𝗰𝗵 𝗿𝗲𝗮𝗹𝗹𝘆 𝗱𝗲𝘀𝗲𝗿𝘃𝗲𝘀 𝗿𝗲𝘀𝗽𝗲𝗰𝘁. 𝗥𝗲𝘀𝘂𝗹𝘁 𝗶𝘀 𝗻𝗲𝘄 𝗔𝗧𝗛𝘀 𝗳𝗼𝗿 𝗲𝗾𝘂𝗶𝘁𝗶𝗲𝘀 𝗮𝗻𝗱 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗰𝗮𝗹𝗺𝗲𝗱 𝗱𝗼𝘄𝗻 𝗶𝗻 𝘁𝗲𝗿𝗺𝘀 𝗼𝗳 𝗳𝘂𝘁𝘂𝗿𝗲 𝗽𝗼𝗹𝗶𝗰𝘆.
Fed Chair Jerome Powell did a great job last week. He gave the market what it wanted (a clearer info on the upcoming tapering), but did it in a way that was still so dovish that it did not spooke investors. The result is we know know the “taper” is going to come (possibly starting around the year end), but we did not get the “tantrum”, because Mr.Powell did not surprise market participants with anything that would be indicating stricter monetary policy than they’d expect. Even if the tapering starts, the decicion about raising rates is “still far away in the future”. Bravo! Once the tapering does start I’d still expect some negative impact on the markets and potentially the long-awaited correction on equities as per my video here: etoro.tw/3i2CTnX
👉 On Monday the FDA gave full approval to the Pfizer/BioNTech vaccine. $SPX500 made a new intraday ATH led by Energy, Travel and Leisure.
👉 On Tuesday we saw a big rally in the Chinese stocks finally after the authorities passed a major data protection law on Friday before (Personal Information Protection Law (PIPL)). This spurred some comments from analysts saying new laws shall now be introduced slower and the tech companies have still space for growth. Names like Baidu, Alibaba, JD a similar all rose between 4% to 9%.
👉 In US stock rose sharply as well, followed by $OIL, which ended the week up 10% eventually on falling fears of the Delta variant being a bigger and long-lasting issue for the economy.
👉 Wednesday: “Chip stocks helped lift the S&P 500. Early in the day, news broke that Nvidia would supply chips for the Department of Energy’s supercomputer, which pushed the stock up 1.9%. Western Digital jumped 7.8% following a report by The Wall Street Journal, which said the company is in advanced talks to merge with Japanese chipmaker Kioxia Holdings. Micron Technology edged 2.8% higher” (CNBC). Some other cyclical sectors like banks also rose.
👉 Small pullback on Thursday. The market was awaiting the speech from Chair Powell.
👉 And it got it on Friday, which led the markets higher all across the board. He did timeline the start of tapering, but he concentrated mostly on covering the Fed’s 2nd manadate, which is maximum employment, and pushed the fears of immediate rate hikes way back into the future. An official tapering announcement could come as soon as the Fed’s Sept. 21-22 meeting.
👉 𝙀𝙛𝙛𝙚𝙘𝙩𝙞𝙫𝙚 𝙬𝙚𝙚𝙠𝙡𝙮 𝙞𝙣𝙙𝙚𝙭 𝙘𝙝𝙖𝙣𝙜𝙚𝙨: $SPX500 +1,5%, $NSDQ100 +2,3%, EuroStoxx600 +0,8%, $GER30 +0,3%, JPN225 +2,3%.
𝗢𝘁𝗵𝗲𝗿 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗲𝘃𝗲𝗻𝘁𝘀: 👉 𝘽𝙤𝙣𝙙𝙨: the US yield curve (10y-FF) at 127bps, the German curve (10Y Bunds-3M) at 25 bps. EuroArea AAA-rated bonds yield at 27bps. High Yield Spreads at 3,2. 👉 𝘾𝙤𝙢𝙢𝙤𝙙𝙞𝙩𝙞𝙚𝙨 (𝙚𝙭 𝙤𝙞𝙡): $GOLD +2,1% on week. 👉 𝙊𝙞𝙡: +10% on week 👉 𝘾𝙪𝙧𝙧𝙚𝙣𝙘𝙞𝙚𝙨: DXY (Dollar Index) -0,9% on week, EURUSD +0,9%.
𝗠𝗮𝗷𝗼𝗿 𝘀𝘁𝗼𝗿𝗶𝗲𝘀 𝗳𝗼𝗿 𝗻𝗲𝘅𝘁 𝘄𝗲𝗲𝗸: 👉 Monday – Consumer Sentiment data in EU 👉 Tuesday – US Case-Shiller Home Price Index 👉 Zoom, Veeva, Okta – report numbers 👉 Friday – NFPs for August are due
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 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 held accountable for any losses of a third party resulting from any potential trading activities in any instruments, both specifically or by category of assets. 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.