US stocks recorded mixed returns for the 2nd consecutive week, with small-cap and value shares continuing to outperform large-cap growth stocks that have led the market over much of the year. Indeed, at the close of trading on Thursday, the Nasdaq 100 Index was lagging the broader S&P 500 and barely outperforming the small-cap Russell 2000 Index for the year to date, before large-cap growth shares rebounded to close the week. The week was also notable for the S&P 500 selling off on Wednesday by more than 2% for the first time since February 2023, while the Nasdaq suffered its worst loss since October 2022. micro seemed to take precedence over the macro for much of the week, as investors absorbed one of the busiest weeks of the earnings reporting season. A 12.33% decline in Tesla and a 5.03% decline in Alphabet following earnings reports contributed heavily to Wednesday’s decline. On the macro side, Housing market slump continues, but business investment picks up. Investors appear reassured by Fed’s preferred inflation gauge (PCE) which cements expectations for a Fed rate cut at its September meeting. The yield on the US 10-year Treasuries ended the week slightly lower while credit spreads remain tight. The STOXX Europe 600 Index ended the week 0.55% higher. Japan’s stock markets registered sharp weekly losses, with the Nikkei 225 Index falling 6.0% as the yen strengthened for the third successive week. Gold ended the week slightly lower while bitcoin surged back to $68k.
Have a great week-end
Charles for the team