WEEKLY MARKET RECAP
Your weekly global financial market newsletter
WEEKLY MARKET RECAP
Your weekly global financial market newsletter
During another week of top-heavy trading, the major indices closed with mixed results. Large-cap growth stocks, especially from the information technology and internet sectors, significantly outperformed the broader market. This outperformance resulted in the underperformance of most other stocks, with the equally weighted S&P 500 Index showing its largest lag behind its market-weighted counterpart since March. Additionally, according to Russell indices, large-cap growth stocks outpaced their value counterparts, and the large-cap S&P 500 outperformed the small-cap Russell 2000 Index by the widest margins on the same timeframe. In Europe, the STOXX Europe 600 Index ended the week down 1.18% in concerns about rising bond yields and prolonged higher interest rates. Major European stock indices, including Germany’s DAX and the UK’s FTSE 100 Index, also experienced declines, falling 1.02% and 1.49% respectively.
US30 -0.30% |
US100 +1.75% |
US500 +0.48% |
GER40 -1.02% |
Oil prices experienced a significant decline last week, with U.S. crude and Brent falling 9% to 11% each. This decline was attributed to various economic factors, including high U.S. Treasury yields and a strong dollar, as well as lower gasoline consumption in the United States. However, the upcoming week is expected to bring potential price fluctuations, partly due to the weakening U.S. dollar, which could support commodity prices. Furthermore, the ongoing Israel-Hamas conflict in an oil-sensitive region raises uncertainty about its impact on oil supply, particularly with regard to Iran’s involvement. Geopolitical factors, as well as considerations related to Iran, Russia, and Venezuela, are expected to play a significant role in the near-term dynamics of the oil market.
NATGAS +13.54% |
On Friday, the Dollar Index rose to 106.8 following the release of the payrolls report, which showed an unexpectedly high gain of 336,000 jobs in the previous month. These significant labour figures reaffirmed the strength of the job market and provided further evidence of the U.S. economy’s ability to sustain higher interest rates for an extended period of time, consistent with the Federal Reserve’s hawkish stance. The dollar showed broad-based strength, with notable gains against currencies such as the Australian dollar, the Japanese yen, the euro, and the British pound. In the first week of October, the dollar appreciated by approximately 0.5%, extending its 2.5% rise since September.
EUR/USD +0.13% |
USD/JPY -0.05% |
GBP/USD +0.31% |
USD/CAD +0.59% |
The cryptocurrency market experienced volatility following the release of U.S. non-farm payrolls (NFP) data, with Bitcoin (BTC) initially losing 2.1% in a single hourly candle before recovering. The NFP data for September, which showed a significant increase of 336,000 jobs compared to the expected 170,000, was seen as a sign of the labour market’s resilience to the Federal Reserve’s counter-inflation measures. However, this positive jobs report was perceived as a potential cause for further interest rate hikes by the Fed, which could negatively impact risk assets, including cryptocurrencies. Traders like CrypNuevo noted the increasing likelihood of another rate hike at the November meeting of the Federal Open Market Committee.
BTC +2.96% |
ETH -2.25% |
LTCUSD -1.49% |
XMRUSD +6.22% |
In the UK, house prices continued their decline for the sixth consecutive month in September, with a sequential decrease of 0.4%, as reported by mortgage lender Halifax. Nationwide Building Society, another mortgage lender, estimated that house prices remained unchanged last month following a 0.8% reduction in August. Both indices recorded their sharpest year-over-year declines since 2009. Meanwhile, a sharp decline in homebuilding led to the construction industry’s activity falling at its fastest pace in over three years in September, according to an S&P Global/CIPS survey of construction purchasing managers.
In the EU, both official and private-sector data indicated that the eurozone economy is likely to stall in the third quarter. The final Composite Purchasing Managers’ Index (PMI) compiled by S&P Global registered at 47.2 in September, marking the fourth consecutive monthly decline. Additionally, eurozone retail sales reported by the EU’s statistics office saw a larger-than-expected sequential decline of 1.2% in August, mainly due to significant declines in gasoline, mail orders, and internet shopping. On a month-over-month basis, German industrial orders rebounded by 3.9% in August, following an 11.7% drop in July, driven by strong increases in computing, electronic, and optical products. However, exports fell 1.2% sequentially in August, more than forecast, due to weak global demand.
In the US, the details within the jobs report provided a nuanced view of the labour market, leading to a market recovery after the opening of equity trading. Average hourly wages rose 0.2% for the month, bringing the year-over-year gain down to 4.2%, its lowest level since June 2021. The workforce participation rate remained steady at 62.8%, its best level since February 2020. This data suggested that an increase in labour supply rather than excess demand impacted the labour market, creating a more favourable inflation environment. Other economic indicators during the week also helped calm concerns about a rebound in growth and inflation. While manufacturing sector activity showed a slight pickup in September, indicating only a slight decline, the services sector, which is much larger and healthier, signalled a significant slowdown in growth compared to August. Additionally, payroll processor ADP reported a different job market picture, with private sector payrolls expanding by only 89,000 in September, the smallest increase since January 2021.
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