US Rates worries drove stocks sharply lower
In a week of mostly light summer trading, stocks pulled back sharply as investors became less optimistic that the Fed will be able to tame inflation without causing a significant economic slowdown. Growth stocks fared worst in this environment as the Nasdaq Composite Index fell to its lowest level in a month. Rising oil prices fed into inflation worries but also boosted energy stocks. Most of the market’s moves came at the end of the week as central bankers gathered at the Fed’s annual symposium in Jackson Hole. Fed Chairman Powell’s comments were “resolutely hawkish”, leading to a sharp decline of global stocks on Friday. Indeed, previous expectations of a Fed pivot seem premature, leading investors to anticipate a reversal of the summer rally. Much of the week’s economic data surprised on the downside. However, the U.S.Treasury yields moved higher for much of the week. In Europe, the STOXX Europe 600 Index ended the week 2.6% lower. Core eurozone government bond yields moved higher amid rising expectations of more sharp increases in interest rates. The surge of natural gas prices also weighed on sentiment. Eurozone business activity shrank for a 2nd consecutive month in August, another sign of a possible recession in Q3. China’s stock markets declined as extreme temperatures and power shortages in some provinces raised concerns about the growth outlook.
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
The S&P 500 Index and the Dow Jones both moved to record highs over the week, helped by some upside surprises to kick off earnings season. Shares in JPMorgan Chase and Wells Fargo rose on Friday after they reported smaller-than-feared declines in Q3 profits. A solid rise in NVIDIA shares helped growth stocks outperform value stocks and compensate for a decline in Google parent Alphabet. Tesla was also weak following a skeptical response to the company’s highly anticipated unveiling of its new “robotaxis” and “robovans.” The earnings focus arguably offset several disappointing economic reports over the week: headline and core (less food and energy) inflation rose in September by 0.2% and 0.3%, respectively, both a tick above expectations.