APEX's Weekly Market Wrap (15 - 19 July)
Here is a preview of the APEX Market Wrap, where the most relevant digital asset and stock market news is delivered to your inbox. You can expect updates and analysis across top asset classes, keeping up with rapidly changing economic conditions.
Stock Markets at a glance
Stocks tumbled after a convoluted rally since the beginning of the year, with the S&P 500 down 2.24% across the week and the NASDAQ Composite down 4.04% across the week. This comes as equities have seen high levels of concentration in the 'Magnificent 7' stocks. Last week, we saw a rotation away from these leaders into mid and micro-cap stocks.
We also observed a shift from AI and tech leaders into utilities, energy, and infrastructure. Gold and oil also saw a dip during the week. Overall, volatility has returned to the markets, as 2023 has been a quiet year across vol.
Cryptocurrencies at a glance
Digital assets have experienced a surge from their recent lows, fuelled by the ongoing Trump narrative that is bolstering optimism within the asset class. With the upcoming BTC conference where Trump is anticipated to speak, speculation is rife that significant announcements regarding Bitcoin and the United States fiscal position might be made, though this remains unconfirmed.
Notably, Solana has outpaced its peers, rising 8% over the week to reach $173. This holistic upward trend has helped restore some positive sentiment following previous weeks' bearish outlook, during which the fear and greed index was positioned at 36 (indicating fear).
APEX's Chart of the Week
This week's chart analyses the daily returns and volatility of the S&P 500 from 2020 to 2024. Recent data indicates a decline in volatility, attributed to several factors. There has been increased concentration in the equities market, with the majority of the stocks within the S&P 500 remaining relatively stable.
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Additionally, systematic options funds have grown significantly, from $100 billion in March 2023 to $175 billion by June 2024. These funds typically sell options and, rather than attempting to predict market movements, they dynamically hedge by selling during rising movements and buying during falling ones. This strategy helps keep the index within a narrower range.?
The visualisation clearly depicts decreasing vol with only one day so far this year having moved more than 2%.
APEX's Picture?of the Week
President Biden announced he will not seek re-election, endorsing Vice President Kamala Harris as his successor.
Harris, if nominated, would be the first Black woman and first Asian American to lead a major party ticket. Updated Federal Election Commission filings reflect Harris’s candidacy, granting her access to campaign funds. Despite Biden's support, Harris's nomination isn't guaranteed, with Sen. Joe Manchin possibly re-entering the race as a Democrat. Former President Donald Trump criticized Biden and launched a fundraising appeal.
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Disclaimer:?Our content is intended as information only and not financial advice in any shape or form. Please do your own analysis before making any investment based on your personal circumstances. Please take independent financial advice from a professional in relation with, or independently validate and verify, any information that you find on this post and wish to rely upon, whether for the purpose of making an investment decision or otherwise.
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