Market Recap??

Recap of the macro news and market activity of the past week. Released every week.

??ON INVESTORS’ MIND

An ugly start of the week for equities, as investors take profits on Tech stocks, and switch into both defensive stocks and bonds to cash in on lower rates expectations. In the meantime, data is blowing hot and cold, still supporting the “US soft landing mantra”. While September is usually a bad month for equity performance, we’ll check for some sense of panic selling, if any.

??CHART OF THE WEEK

US savings rate fell to lowest in 2 years, close to historic low.

??MARKET NEWS

Any news on rates or inflation?

Elsewhere in Europe, inflation dropped to 2.2% in Aug24, a three-year low, boosting rate cut expectations there too.

How do you feel about the economy?

ISM manufacturing was down to 47.2 in Aug24 (vs 47.5 est, 46.8 prior), following a drop in new orders. JOLTS job openings were down to 7.7m (vs 8.1m est, 7.9m prior). Trade deficit widened in Jul to -$78.8bn (vs $79bn est, $73.1bn prior), as imports rebounded. Factory orders were up 5% (vs 4.9% est, -3.3% prior). ADP Payrolls were down in Aug24 at +99k (vs 145k est, 111k prior). Jobless claims were almost unchanged.

Houses & mortgages

Construction spending fell 0.3% in Jul24 mom. Residential home improvement spending made a new all-time high in Jul24, with 6-month change at 16.3% according to Schwab. Condo inventory soared in Jul24 in Texas and Florida.

Corporate digest

In the most recent downward revision of EV production targets for car makers, Volvo dropped its 100%-EV-2030 production target. Such targets became more differentiated by market, depending on adoption. US Tech companies resumed massive job cuts in Aug24, similar to early 2023.

??MARKET DATA as of 6th September 24

Equities tanked, and bond yields compressed. Some form of sector rotation took place. By sectors, Tech has been worst hit, while former laggards such as Real Estate, Utilities, and Financials performed better. Overall, valuations were catching up with the perspective of a softer economy going forward.

??WEEK AHEAD

Watch for inflation data on Wednesday and Thursday this week ??

That’s all for now !

Disclaimer –

The content of this newsletter is provided for informational purposes only and does not constitute investment advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the official policy or position of any other agency, organization, employer, or company. The material used in this presentation is based on public information believed to be reliable, but its accuracy and completeness cannot be guaranteed. This material is not intended as a recommendation or solicitation for the purchase or sale of any security, financial product, or instrument. Readers should not rely on this information as a substitute for professional financial advice tailored to their individual circumstances. Please consult with a qualified financial advisor before making any investment decisions.