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In this post I shortly describe the main market events for the first week of September just ended. Here it is…
-> 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:
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