Global market indices
Currencies
Cryptocurrencies
Fixed Income
Commodity sector news
Key data to move markets
Global macro updates
Global market indices
US Stock Indices Price Performance
Nasdaq 100 -3.15% MTD +12.68 %YTD
Dow Jones Industrial Average -1.51% MTD +8.62% YTD
NYSE -1.50% MTD +12.75% YTD
S&P 500 -2.27% MTD +15.73% YTD
September negative seasonality appears to be playing out thus far. The S&P 500 is -1.29% over the past week, with only 3 of the 11 sectors up MTD. The Equally Weighted version of the S&P 500 was -0.20%; its performance is -1.33% MTD and +9.67% YTD.
The S&P 500 Consumer Staples is the leading sector so far this month, up +1.28% MTD +17.26% YTD, while Information Technology is the weakest at -4.82% MTD +20.43% YTD.
This week Utilities outperformed within the S&P 500 with a +1.88% gain, followed by Consumer Staples and Financials at +1.55% and +1.16%, respectively. Conversely, Information Technology underperformed at -4.52%, followed by Energy and Communication Services at -2.32% and -2.13%, respectively.
The S&P 500 experienced a sharp decline on Tuesday following the release of August manufacturing survey data, which showed continued contraction. On Wednesday, the S&P 500 was -0.16%, its fourth loss in five sessions. Only 5 ofits major sectors were up, led by Utilities, Consumer Staples and Real Estate. The Dow Jones Industrial Average was -1.51%, or approximately 626.15 points. The Nasdaq Composite was -0.30% due to 5 of the Magnificent 7 stocks declining.
According to the CME FedWatch tool, traders in interest-rate futures are now assigning a 57% probability to a quarter-point cut in September, with expectations for a larger half-point cut at 43%.
According to Bank of America’s client flows data, investors dumped stocks at their fastest pace since November 2020 in the last week of August. Its clients sold $8 billion worth of stocks across large, mid- and small-cap stocks, the data said. Selling was led by institutional investors and hedge funds, while private investors sold stocks for a fourth week in a row.
US stocks
Mega caps: A tough week for the ‘Magnificent Seven’ as the technology stocks were battered by fears that the US economy is slowing too quickly and AI is not progressing. Alphabet -3.29%, Amazon +0.70%, Apple -2.49%, Meta Platforms -1.06%, Microsoft -0.41%, Nvidia -9.68%, and Tesla +6.37%.
Nvidia experienced its worst two-day plunge this week since October 2022 due to a report about the US Department of Justice sending out subpoenas as part of an antitrust probe. It suffered a massive $279 billion drop in market value on Tuesday. On Wednesday the company denied a media report that it received a subpoena.
Energy stocks had a poor week as concerns rose over Chinese and US demand while questions of potential oversupply plagued investors. The Energy sector itself was -3.53%, with the sector’s YTD performance +4.60%. Apa Corp (US) -11.76%, Baker Hughes -3.40%, Chevron -3.63%, ConocoPhillips -5.08%, Energy Fuels -6.90%, ExxonMobil -3.45%, Hess Corporation -4.09%, Halliburton -5.10%, Marathon Petroleum +1.07%, Occidental Petroleum -3.79%, Phillips 66 -3.08%, and Shell -5.34%.
Materials and Mining stocks had a bad week as the price of gold dropped and copper fell to a two-week low. The materials sector was -1.76%, bringing the sector’s YTD performance to +6.93%. Albemarle -7.53%, CF Industries -2.10%, Celanese Corporation -3.50%, Freeport-McMoRan -5.07%, Newmont Corporation -2.95%, Nucor -5.54%, Mosaic -4.54%, Sibanye Stillwater -11.38%, and Yara International -2.57%.
On Monday Sibanye Stillwater issued a trading statement signalling a significant drop in earnings for H1 2024. The full results are scheduled for release on 12 September. The company said it will report a half-year loss hurt by a 7.5 billion rand ($420 million) writedown on its US assets reflecting sliding palladium prices. The company said it expects to report a loss per share of between 2.508 rand and 2.772 rand for the six months to 30 June after posting a profit of 2.62 rand per share for the period last year. Sibanye said its earnings were impacted by the impairment of its two US mines, which predominantly produce palladium. The price of palladium, which along with other platinum group metals (PGMs) is used in vehicle exhaust systems to curb emissions, fell 40% in 2023 and is down 10% this year.
Retail stocks performance: According to LSEG I/B/E/S data, to date, 183 of the 199 companies in the Retail/Restaurant Index have reported their EPS results for Q2 2024, representing 91% of the index. Of those companies that have reported their quarterly results, 72% announced profits that beat analysts’ expectations, while 4% delivered on-target results and 24% reported earnings that fell below estimates. The Q2 2024 blended earnings growth estimate now stands at 14.4%.
The blended revenue growth estimate for the 199 companies in this index is 3.6% for Q2 2024. Of those companies that have reported their quarterly results so far, 51% announced revenue that exceeded analysts’ expectations and the remaining 49% reported that their revenue fell below analysts’ forecasts.
Dollar Tree missed its earnings and revenue estimates, reporting a 0.7% increase in same-store sales (SSS) for Q2. Its Family Dollar segment posted a -0.1% SSS, slightly better than the -0.3% estimate. The low-end consumer segment has been most affected by the current macroeconomic climate. Although store traffic increased, consumers spent less per visit, with average tickets down 0.5%. In contrast, Dick’s Sporting Goods exceeded earnings and revenue expectations, reporting a robust 4.5% increase in same-store sales, up from last year’s 1.8%. Dick’s Sporting Goods also raised its full-year guidance due to strong store traffic and higher average transaction amounts.
European Stock Indices Price Performance
Stoxx 600 -1.95% MTD +7.48% YTD
DAX -1.67% MTD +10.99% YTD
CAC 40 -1.70% MTD -0.56% YTD
IBEX 35 -1.65% MTD +11.01% YTD
FTSE MIB -1.48% MTD +11.57% YTD
FTSE 100 -0.93% MTD +7.31% YTD
Over this past week, the pan-European Stoxx Europe 600 index was -1.11%, closing at 514.82 on Wednesday.
The Telecoms sector in the STOXX Europe 600 is the leading sector so far this month, up +1.34% MTD and +15.01% YTD, while Technology is the weakest at -5.10% MTD and +3.29% YTD.
This week Telecoms outperformed within the STOXX Europe 600 with a +1.84% gain, followed by Utilities and Chemicals at +0.81% and +0.31%, respectively. Conversely, Basic Resources underperformed at -4.00%, followed by Technology and Oil & Gas, at -3.41% and -3.34%, respectively.
On Wednesday Germany's DAX index was -0.83% and closed at 1,8591.85. It is -1.70% over the past week. France's CAC 40 index was -0.98%, closing at 7,500.97. It is -1.83% over the past week.
The UK's FTSE 100 was -0.78% and closed at 8,298.46 and is -0.54% over the past week.
In Corporate news, Volvo, which is majority-owned by China's Geely, abandoned its plan to produce only electric-vehicles by 2030. Instead, it said that by 2030 it now aimed for between 90% and 100% of cars sold to be fully electric or plug-in hybrid models, while up to 10% would be so-called mild hybrids, where electric power only supplements the combustion engine. Jim Rowan, Volvo’s chief executive, on Wednesday said the decision was due to an industry slowdown as demand for EVs has fallen, partly due to consumer worries and the slow roll-out of charging points.
Other Global Stock Indices Price Performance
MSCI World Index -2.22% MTD +12.96% YTD
Hang Seng -2.96% MTD +2.40% YTD
This week, the Hang Seng Index was -1.33%, while the MSCI World Index was -1.41%.
Currencies
EUR +0.33% MTD +0.42% YTD to $1.1084.
GBP +0.14%MTD +3.24% YTD to $1.3142.
The euro was -0.32% against the USD over the past week, while the British Pound was -0.33% due to signs of economic softening adding support to the case for higher Fed rate cuts this month. The Dollar Index was +0.17% this week, -0.42% MTD, and -0.06% YTD.
The US Dollar Index was -0.09% at 101.27 on Wednesday. The euro rose +0.3% against the US dollar to $1.107 while Sterling was +0.1% to $1.3142 on Wednesday. The British pound is on track to potentially become one of the strongest currencies globally this year. This is due to surprisingly robust economic growth and anticipated slower rate cuts from the Bank of England. The Bank is widely expected to hold its base rate at 5% at its next meeting on 19 September after cutting rates for the first time since 2020 at the beginning of August.
The British pound was steady against the euro on Wednesday, at 0.8428 pence. Traders are pricing in a 25% probability of a quarter-point interest rate cut by the BoE in September. However, this could change if upcoming data on GDP growth, inflation, GDP, and/or the labour market surprises expectations.
The yen rallied +1.1% on Wednesday and was trading at ¥143.84 against the US dollar. Bank of Japan (BoJ) Governor Kazuo Ueda reiterated Tuesday that the central bank will continue to raise interest rates if the economy and prices perform as expected.
Cryptocurrencies
Bitcoin -1.67% MTD +38.70% YTD to $58,067.06
Ethereum -2.57% MTD +7.48% YTD to $2,453.49.
It was a difficult week for the two major cryptocurrencies as cryptocurrencies have come under intense selling pressure, with prices falling sharply on Wednesday morning following a shock downturn in US stock markets on Tuesday. Flows to US Spot Bitcoin ETFs reversed in August as cryptocurrency investors appeared to be preparing for the Fed’s first rate cut expected at this month’s meeting. Spot Bitcoin ETFs experienced a net outflow of $15 mn in August, marking the second time since their launch in January that the ETFs failed to gather net inflows, according to data from Morningstar. In July Spot Bitcoin ETFs attracted more than $3.2 bn of inflows. The outflows are continuing in September with Spot Bitcoin ETFs experiencing their fifth consecutive day of negative flows according to SoSoValue data, with net outflows reaching $287.8 million on 3rd September. Ethereum ETFs experienced a total net outflow of $47.4 million.
Fixed Income
US 10-year yield -16 bps MTD -12 bps YTD to 3.76%.
German 10-year yield -6 bps MTD +21 bps YTD to 2.22%.
UK 10-year yield -4 bps MTD +40 bps YTD to 3.93%.
US Treasury 10-year bond yields are -4 basis points (bps) since last week. US Treasury yields experienced a significant decline on Wednesday. During the session the US two-year note’s yield fell below the 10-year note’s for only the second time since 2022 as weaker-than-anticipated job openings data increased bets on steep interest-rate cuts by the Federal Reserve.
On Wednesday the US benchmark 10-year yield decreased by -8 bps to 3.76%. Similarly, US 30-year yields also fell -8 bps to 4.06%. On the shorter end of the yield curve, the two-year note yield, which is typically sensitive to interest rate expectations, decreased -10 bps to 3.77%.
CME Group's FedWatch Tool indicates a 45% probability of a 50 basis point cut, up from 38% a week ago, and a 55% chance of a 25 basis point reduction, down from 62% a week ago. Markets now see 110 bps of easing by year-end.
Investors will be looking closely at today’s jobless claims and Friday’s Nonfarm payrolls for further insights into the pace and extent of future rate adjustments following on from Wednesday’s weak JOLTS numbers.
The German 10-year yield was -0.90 bps since last week, while the UK 10-year yield was +1.30 bps since last week. The spread between US 10-year Treasuries and German Bunds currently stands at -156.6 bps.
UK and Eurozone bond yields were also down on Wednesday. The UK’s 10-year bond was -5 bps to 3.93 while Germany's 10-year bond yield was -5 bps to 2.22%.
Italian bond yields, a benchmark for the eurozone periphery, were +2 bps this week to 3.583%. The spread between Italian and German 10-year yields is 140.3 bps.
Commodities
Gold spot -0.02% MTD +20.90% YTD to $2,493.40 per ounce.
Silver spot -1.79%MTD +18.82% YTD to $28.62 per ounce.
West Texas Intermediate crude -4.39% MTD -2.16% YTD to $70.34 a barrel.
Brent crude -5.41% MTD -5.54% YTD to $72.77 a barrel.
Spot gold prices are -0.30% this week. Gold prices declined slightly on Wednesday as Treasury yields fell. Investors appear to be awaiting Friday’s Nonfarm payrolls for further indications about the extent of Fed cuts this month.
Gold has been supported by growing expectations of US interest rate cuts in September, central bank purchases, and escalating geopolitical tensions in the Middle East.
Both WTI and Brent are in negative territory this week by -5.63% and -6.20%, respectively, driven by demand concerns due to continuing economic weakness in China and data indicating a slowing of the US economy. WTI was -4.39% on Wednesday, while Brent was +0.10%. The American Petroleum Institute reported crude inventories dropped by 7.4 million barrels, according to people familiar with the data. That would be the biggest decline since June, if confirmed by official figures later today.
Note: As of 5:00 pm EDT 4 September 2024
Key data to move markets
EUROPE
Thursday: German Factory Orders and Eurozone Retail Sales.
Friday: German Industrial Production and Trade Balance, Eurozone Employment Change, Eurozone GDP, a speech by ECB Executive Board Member Frank Elderson.
Monday: Eurozone Sentix Investor Confidence.
Tuesday: German Harmonised Index of Consumer Prices.
UK
Tuesday: Average Earnings, Claimant Count Change, Employment Change, ILO Unemployment Rate.
Wednesday: GDP, Industrial Production and Manufacturing Production.
US
Thursday: Initial and Continuing Jobless Claims, Challenger Job Cuts, ADP Employment Change, Nonfarm Productivity, Unit Labour Costs, S&P Global Composite and Services PMIs, ISM Services Employment, New Orders, PMI, and Prices Paid.
Friday: Average Hourly Earnings, Labour Force Participation Rate, Nonfarm Payrolls, Unemployment Rate, and a speech by New York Fed President John Williams.
Tuesday: US Presidential Debate.
Wednesday: CPI and Core CPI.
JAPAN
Sunday: Current Account and GDP.
CHINA
Monday: CPI and PPI.
Tuesday: Imports, Exports, and Trade Balance.
Global Macro Updates
Will US jobs data give the Fed room for a larger cut? Job growth has been slowing, unemployment is rising and jobseekers are having greater difficulty finding work, fueling fears about a potential recession. On Wednesday the July JOLTS report showed that US job openings fell in July to the lowest since January 2021 and layoffs rose. The job openings rate was at its lowest since December 2020 and the ratio of job openings to unemployment was the lowest since 2018. There were 7.7 million job vacancies in July, down from 7.9 million in June. Layoffs rose slightly to 1.8 million, further indicating that demand for workers is slowing.
In addition, the Fed's Beige Book said the number of districts reporting flat or declining activity rose from five to nine in the current period, though the labour market remains steady and prices increased only modestly.
However, it is not all bad news as new orders for US factory goods rose the most since July 2020 following two consecutive monthly declines, suggesting the manufacturing sector may be strengthening. Factory orders increased 5% in July, up from June’s 3.3% decline, according to US Census Bureau data released on Wednesday. Although new orders for non-defense capital goods excluding aircraft, viewed as a proxy for business investment, was -0.1% , far below June’s +0.6% rise, unfilled orders rose 0.2%, an indication that demand could be strong.
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