August was a volatile month with US equities pulling back at the start the month before rallying back to unchanged. Last week, the main US equity indices ended mixed. Trading was light ahead of the US holiday weekend (Labor Day). The Nasdaq Composite fared the worst, dragged lower in part by chip giant NVIDIA, which lost nearly 10% of its value, at the stock’s low point on Thursday. Relatedly, value stocks outperformed growth shares by the largest margin since late July. The US core personal consumption expenditures (PCE) price index showed prices rising by 0.2% in July, largely as expected. This seemed to please investors as it is a confirmation that inflation was remaining subdued and near the Fed’s target. The US Treasuries 10-year yield drifted higher over the week, as hopes appeared to dim that the Federal Reserve would cut interest rates by a full 50 basis points at its mid-September meeting. According to the CME Fedwatch tool, futures markets continued to price in the certainty of a cut of at least 25 basis points. In Europe, the STOXX Europe 600 Index gained 1.34%, rising to a record high. Headline annual inflation in the eurozone decelerated to 2.2% in August from 2.6% in July—the lowest level in three years and a shade above the ECB’s 2% target. Wrapping up a volatile month, Japan’s stock markets rose over the week, with the Nikkei 225 Index gaining 0.7%. The dollar was down hard on the month but staged a decent comeback this week after testing near YTD lows. Bitcoin is back below $60k.
Have a great week-end
Charles for the team