Kristal Daily Brief - Aug 18

After 5 consecutive sessions of ending positive, US markets ended in the red yesterday. The S&P was down by 72bps, the tech heavy Nasdaq was down by 1.25%, while Dow Jones ended at 50bps negative for the day.

A significant update yesterday was the Fed meeting minutes that came out for their July meeting, which showed that the Fed remains committed to bringing inflation under control by means of continued rate hikes. However, they will continue to focus on ongoing data to decide the extent of the hikes.

The U.S. dollar index, which measures the dollar against a basket of six major currencies, is up about 0.8% this week -- putting the brakes on a pullback that began about a month ago.

Meanwhile, overall retail sales in the US unexpectedly stalled in July, disappointing markets that expected a 0.1% increase as sales fell at gasoline stations and car dealers.

Fixed income yields continue to remain range bound, with the 2Y10Y inversion continuing to stay close to 40bps.

Oil prices continued to ease, as rising output from Russia and worries about a potential global recession weighed on futures. The U.S. crude benchmark, fell 0.7% to $87.5 per barrel.

Outside of the US, European markets struggled on the back of continued high inflation & the ongoing energy crisis. The broader Euro Stoxx 50 index was down 1.29% yesterday. The energy crisis continues to manifest into high inflation, with UK reporting a YoY inflation for July of 10.1%.

“The most important thing to do if you find yourself in a hole is to stop digging.”

Warren Buffet

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