.png)
CHART OF THE WEEK: A Hated Rally
The S&P 500 gained 3.6% over holiday-shortened week, lifting $SPX above 50 days & 100 days moving averages, triggering short coverings. While Fed expectations grew more hawkish and swaps are now pricing +72bp for September, markets seem to be optimistic that the Central Bank can restore price stability without derailing growth.
WEEKLY SUMMARY: Wall Street broke a string of three weekly losses
Stocks broke a losing streak as investors appeared to grow more confident that the market had reached at least a temporary bottom. Indeed, the Fed’s “Beige Book” indicated that price increases were moderating in nine of its 12 districts, as “lower fuel prices and cooling overall demand alleviated cost pressures, especially freight shipping rates.” A midweek decline in oil prices — which briefly hit their lowest level since Russia’s invasion of Ukraine — and a surprise moderation in Chinese PPI seemed to help foster a stock rally as the most shorted stocks surged. Energy shares underperformed while a rally by Tesla helped the consumer discretionary sector to outperform. US economic data released over the week were mixed; the S&P Global measure fell more than expected, to 43.7, the biggest contraction since early 2020. Meanwhile, the labor market appeared to remain on solid footing, with weekly jobless claims coming in much lower than expected (222k vs. roughly 240k), hitting their lowest level since the start of the summer. The 10-year U.S. Treasury yield jumped to its highest level since mid-June on Tuesday. European stocks rose after some countries announced plans to deal with the energy crisis and boost their economies. As expected, the ECB increased its key interest rates by a record 75 basis points. The euro gained slightly against the dollar while the British pound depreciated further before retracing to roughly USD 1.16, a level near the low hit in 1985. Cryptocurrencies soared.
Disclaimer
This marketing document has been issued by Bank Syz Ltd. It is not intended for distribution to, publication, provision or use by individuals or legal entities that are citizens of or reside in a state, country or jurisdiction in which applicable laws and regulations prohibit its distribution, publication, provision or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is intended for informational purposes only and should not be construed as an offer, solicitation or recommendation for the subscription, purchase, sale or safekeeping of any security or financial instrument or for the engagement in any other transaction, as the provision of any investment advice or service, or as a contractual document. Nothing in this document constitutes an investment, legal, tax or accounting advice or a representation that any investment or strategy is suitable or appropriate for an investor's particular and individual circumstances, nor does it constitute a personalized investment advice for any investor. This document reflects the information, opinions and comments of Bank Syz Ltd. as of the date of its publication, which are subject to change without notice. The opinions and comments of the authors in this document reflect their current views and may not coincide with those of other Syz Group entities or third parties, which may have reached different conclusions. The market valuations, terms and calculations contained herein are estimates only. The information provided comes from sources deemed reliable, but Bank Syz Ltd. does not guarantee its completeness, accuracy, reliability and actuality. Past performance gives no indication of nor guarantees current or future results. Bank Syz Ltd. accepts no liability for any loss arising from the use of this document.
Related Articles
US stocks recorded modest gains over the shortened trading week (markets were closed on Wednesday), with the S&P 500 hitting 5,500 intraday for the 1st time ever. The week also saw modest signs of rotation in the market, with value stocks outperforming growth as Nvidia suffered its first down-week in two months. Friday was a so-called triple-witching day, with roughly USD 5.5 trillion in options related to indexes, stocks and ETFs expiring. The start of the week brought some evidence of US economy easing with retail sales signalling less discretionary spending. But data released later in the week suggested that the economy was stronger than indicated by retail sales.