Weekly Excerpt 07/09/2021
Weekly summary from August 30 to September 3, 2009
- Mixed week for the major U.S. equity indices. The Dow Jones has been the hardest hit index with a -0.24% decline over the last five days. With respect to the S&P 500, seven of the eleven sectors have closed positive, the best performing sector has been Real Estate with a return of 4% and on the other hand the Financial sector has been the worst hit with a decline of -2.45%.
- The week has reflected lower volume than usual due to the long Labor Day holiday celebrated yesterday, Monday, in the U.S. Trading volume has been 20% lower than the average of the last 30 days.
- Monday has been a normal day for the European and Asian markets with all major indices having a positive day. The Euro Stoxx 50 closed the day with a return of 1,05% led by the technology sector which was up 1,63%. In Tokyo there is optimism that the change of leadership in the ruling party will bring new economic stimulus.
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- The highlight of the week has been the August employment data for the US, which came in well below analysts' expectations. The final figure was 235,000 versus the 733,000 expected. However, July's data was revised upwards by more than 100,000 jobs (1,053,000 new jobs versus the announced 953,000).
- Given this, it could be expected that the Fed will hesitate to announce a tapering of the purchase program this month (meeting on September 21-22). The next meeting is on November 3, so only at that date will it be possible to have an overview of the plan to reduce the purchase program.
- There are some who believe that the Fed may ignore the relevance of Friday's data, if they consider this month's data as a one-time event (probably because of the Delta variant effect) and not interpreted as a change in trend. This message was issued after the April data (also very low compared to expectations).
| AMERICA | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| DOW JONES | 35.369,09 | -0,24% | 15,56% |
| S&P500 | 4.535,43 | 0,58% | 20,75% |
| NASDAQ | 15.363,52 | 1,55% | 19,21% |
| EUROPE | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| Euro Stoxx 50 | 4.246,13 | 1,13% | 19,63% |
| FTSE 100 | 7.187,18 | 0,55% | 11,28% |
| CAC 40 | 6.743,50 | 0,84% | 21,64% |
| DAX | 15.932,12 | 0,28% | 16,22% |
| IBEX 35 | 8.882,30 | 0,16% | 10,23% |
| SMI | 12.430,23 | -0,05% | 16,22% |
| ASIA | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| NIKKEI 225 | 29.659,89 | 6,73% | 8,07% |
| HSI | 26.163,63 | 2,44% | -3,92% |
| CSI 300 | 4.933,73 | 2,50% | -5,33% |
| BONUS | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| US TREASURY 10Y | 1,32 | 3,43% | 84,16% |
| US Generic Govt 2 Yr | 0,21 | 2,34% | 44,33% |
| GERMANY 10 YR | - 0,37 | 16,44% | 22,25% |
| UK 10 Yr | 0,69 | 20,10% | 166,92% |
| COMMODITIES | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| WTI | 69,29 | 0,80% | 42,87% |
| BRENT | 72,22 | -1,62% | 40,29% |
| NATURAL GAS | 4,71 | 7,83% | 84,64% |
| CORN | 508,00 | -8,96% | 4,96% |
| WHEAT | 714,50 | -0,56% | 11,55% |
| GOLD $/Oz | 1.831,50 | 0,82% | -3,87% |
| SILVER $/Oz | 24,76 | 2,91% | -6,07% |
| COPPER | 432,55 | 0,16% | 22,41% |
| PLATINUM | 1.026,76 | 1,40% | -4,22% |
| COINS | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| EURUSD | 1,187 | 0,62% | -2,86% |
| AUDUSD | 0,744 | 1,96% | -3,33% |
| CADUSD | 0,798 | 0,57% | -1,60% |
| CHFUSD | 1,093 | 0,22% | 3,56% |
| GBPUSD | 1,384 | 0,56% | 1,15% |
| CNYUSD | 0,155 | 0,13% | -1,05% |
| JPYUSD | 0,009 | 0,07% | 6,33% |
| USDBRL | 5,170 | -0,29% | 0,40% |
| USDMXN | 19,915 | -1,12% | 0,10% |
| USDCOP | 3794,52 | -0,56% | -9,68% |
| XBTUSD | 51934,73 | 6,75% | 78,14% |
To keep in mind during the week
- El Salvador is preparing to adopt Bitcoin as a currency as of Tuesday, September 7. Its adoption will receive an initial boost from the government's bitcoin wallet "Chivo" which comes pre-loaded with USD 30 in the currency for users who register with a Salvadoran national ID number. While its law mandates its mandatory nature, President Bukele has mentioned that people can decide between accepting and receiving bitcoin. The difference is that the person can opt for automatic and instant convertibility of the cryptoasset to dollars or keep the cryptocurrency. The government has mentioned that it initially has 400 bitcoin coins to back these transactions.
- According to a new projection by Goldman Sachs, the U.S. will grow 5.7% in 2021 from the 6% initially expected. According to the bank's new report, the Delta variant of COVID-19 and the tapering of fiscal stimulus could be leading to greater consumer hardship.
- George Soros, the billionaire financier and philanthropist has criticized BlackRock's bid to venture into the asset management industry in China and called it a risk to client money and U.S. security interests.
- In Europe, the focus will be on the European Central Bank's meeting on Thursday the 9th. Some members have come out to mention that now is the ideal time to start tapering the stimulus plan, which could be seen as an aggressive move that could lift the euro against other currencies.
Other important points
- Europe faces a potential impact on energy prices, as more businesses reopen and people return to offices increasing demand could create a supply shortage that would raise the cost of energy production. This could further fuel inflation and hamper the expected economic recovery.
- China's export growth unexpectedly picked up in August, due to strong demand from the US and Europe. The recovery came despite disruptions at China's second-largest port last month, which pushed up shipping costs.
- In the meeting held by the Reserve Bank of Australia, it has decided to maintain interest rates at 0.10%, as expected by analysts. It has also mentioned that it maintains its plans to reduce the pace of purchases from September (to 3,000 M$/week vs. 3,800 M$/week currently), although it plans to extend this program until February 2022 (it was initially announced until November 2021).
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- Deutsche Telekom has agreed to sell its Dutch unit to private equity and fund managers Warburg Pincus and Apax Partners for 5.1 billion euros, one of its largest divestments in recent years. According to Bloomberg, the deal would be one of the largest transactions in the European telecommunications sector this year.
- Goldman Sachs Group Inc.'s Petershill Partners said it plans to list an investment vehicle on the London Stock Exchange, taking advantage of interest in the private equity market and tapping into global investors' desire for attractive returns amid low interest rates. The deal, according to people familiar with the matter, could be valued at more than US$5 billion.
- Toyota Motor Co. has announced that it expects to invest more than US$13.5 billion by 2030 to develop batteries and its battery supply system in order to consolidate its presence in the electric vehicle market. According to Reuters data, the company's goal is to deliver its first all-electric line by 2022.
Economic Calendar
Tuesday 07
AUD: Interest rate decision
ALE: ZEW index of investment confidence in Germany
USA: The Conference Board Consumer Confidence
Wednesday 08
JPY: GDP Data
CAD: Interest rate decision
GBP: Presentation on the inflation report
USA: JOLTs survey of job vacancies
Thursday 09
EURO: ECB statement on monetary policy
USA: New claims for unemployment benefits
USA: IEA crude oil inventories
Friday 10
GBP: GDP data
USA: PPI data
