Table of Contents
In this post I shortly describe the main market events for the first week of September just ended. Here it is…
Last week
-> The market ended August on Monday ona really high note. All US indices had their best August in over 30 years time actually. This is pretty unusual for August. Below you can see SP500’s and Dow’s best 10 Augusts:
-> The main star was obviously Apple (AAPL), up a stunning 21% on month, boosted additionally by its 4-to-1 split.
-> On Tuesday the ISM Manufacturing PMI index came out at 56 vs. 54 expected – highest in 19 months. This further built up gains.
-> Up until Wednesday the markets keep building up last’s motnh’s very bullish momentum. On Wednesday SP500 touched 3500 pts level even.
-> Walmart (WMT) stood out on Wednesday with an over 6% gain after announcing Walmart+ membership service. Stock was biggest contributor on that day.
-> Same day the Value vs. Growth momentum reached its inflection point. Coca-Cola (KO) and IBM started outperforming AAPL and Tesla (TSLA), causing a wider sell-off in high-tech high fliers later in the week.
-> Take a look at YTD Value vs. Growth performance below: Value down 10%ish YTD, Growth up over 30% YTD (as of Wednesday close):
-> The market plunged on Thursday with indices being down 3-5% (Nasdaq obviously hit the most). A few brokers like Berenberg and Baclays came out bearish saying recent rally looks more and more like the dot.com bubble, sparking even more caution. A bubble during a recession – what a world ha? The abundancy of anomalies is one of the reasons why SIA-style portoflios stick to their max. 20% stock allocation policy for the current economic cycle phase and only picks stocks with a massive fundamental moat.
-> Friday August labour market report turned out better than expected: unemployment 8.4% vs. 9.8% expected and payrolls rose 1.37m vs. 1.32m expected.
-> Indices kept plunging early in the day, but eventually managed to climbed back up somwhat, ending less than 1% down for Dow and SP500 and -1.3% for Nasdaq.
-> Effective weekly index changes: S&P500 -2.3%, Nasdaq -3.3%, EuroStoxx600 -1.9%, DAX -1.4%, Nikkei225 +1.4%.
Other markets events:
-> Bonds: US yield curve (10y-FF) steepened obviously flattened on the sell-off ending 0.55%, German curve (10Y Bunds-3M) at 0.11 with 10Y Bunds at -0.58%. High Yield Spreads stable at around 5.
-> Commodities (ex oil): Gold dropped 1.6%.
-> Currencies: the dollar finally regained some strenght this week with DXY (Dollar Index) +0.7%% on week, EURUSD -0.6%.
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.
