Weekly Excerpt 09/20/2021
Weekly Summary September 13-17
- The U.S. equity market closed its second consecutive week with losses. Friday's decline in the major indices was the steepest in the last month. Nine of the eleven S&P 500 sectors closed the week negative, led by the materials and utilities sector with declines of -3,22% and -3,11% respectively. The energy sector (XLE), was the standout sector for the week with a gain of 3,31%. Of the last ten market sessions, eight of them have presented negative results.
- In Europe, the equity market has had a similarly negative week, with the exception of the Ibex 35 which has been supported by a significant rally in the banking sector. The hardest hit sector during the week was the basic resources sector (SXPP) with a weekly decline of -5,62%.
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- Among the highlights of the week, we can mention the US inflation data for the month of August which has shown a slight slowdown. The monthly figure came in at 0.3% compared to the 0.4% expected by analysts. This brings annual inflation to 5.3% from 5.4% in the previous month.
- Inflation figures have been favored mainly by a decrease in the used vehicle and transportation services sectors. The annual inflation figure remains at the highest levels in the last ten years.
- These figures could mean some relief for the Fed, which has been repeating in its message that it considered the inflation problem to be transitory. This could release the pressure on the Fed to tighten its loose monetary policy and further lengthen the interest rate hike.
| AMERICA | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| DOW JONES | 34.584,88 | -0,07% | 13,00% |
| S&P 500 | 4.432,99 | -0,57% | 18,02% |
| NASDAQ | 15.043,97 | -0,47% | 16,73% |
| EUROPE | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| Euro Stoxx 50 | 4.130,84 | -0,95% | 16,28% |
| FTSE 100 | 6.963,64 | -0,93% | 7,79% |
| CAC 40 | 6.570,19 | -1,40% | 18,35% |
| DAX | 15.490,17 | -0,77% | 12,91% |
| IBEX 35 | 8.760,90 | 0,75% | 8,51% |
| SMI | 11.935,53 | -1,04% | 11,51% |
| ASIA | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| NIKKEI 225 | 30.500,05 | 0,39% | 11,13% |
| HSI | 24.920,76 | -4,90% | -8,48% |
| CSI 300 | 4.855,94 | -3,14% | -6,82% |
| BONUS | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| US TREASURY 10Y | 1,36 | 1,53% | 97,71% |
| US Generic Govt 2 Yr | 0,22 | 4,20% | 64,22% |
| GERMANY 10 YR | 0,28 | 15,13% | 42,97% |
| UK 10 Yr | 0,85 | 11,57% | 357,30% |
| COMMODITIES | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| WTI | 71,97 | 3,23% | 48,33% |
| BRENT | 75,39 | 3,39% | 45,54% |
| NATURAL GAS | 5,11 | 3,38% | 101,06% |
| CORN | 527,25 | 4,87% | 8,94% |
| WHEAT | 708,75 | 5,00% | 10,66% |
| GOLD $/Oz | 1.749,40 | -2,26% | -7,69% |
| SILVER $/Oz | 22,30 | -6,54% | -15,59% |
| COPPER | 424,55 | -4,55% | 20,65% |
| PLATINUM | 942,79 | -1,87% | -12,06% |
| COINS | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| EURUSD | 1,173 | -0,75% | -4,02% |
| AUDUSD | 0,728 | -1,05% | -5,39% |
| CADUSD | 0,783 | -0,62% | 0,28% |
| CHFUSD | 1,073 | -1,53% | 5,36% |
| GBPUSD | 1,374 | -0,71% | 0,52% |
| CNYUSD | 0,155 | -0,34% | -0,93% |
| JPYUSD | 0,009 | -0,07% | 6,46% |
| USDBRL | 5,290 | 0,81% | -1,72% |
| USDMXN | 20,018 | 0,63% | -0,52% |
| USDCOP | 3.830,00 | -0,23% | -10,45% |
| XBTUSD | 46.990,34 | 4,24% | 62,06% |
To keep in mind during the week
- Investors are going to be paying close attention to the Fed's September 21-22 meeting. Investors will be watching for language from the policymaking committee to get a clearer idea of when they might consider an appropriate time to begin reducing the pace of asset purchases. It is also expected to release its new projections for growth, inflation and interest rates. The event will culminate with Fed Chairman Jerome Powell's monetary policy statement and press conference on Wednesday 22nd.
- Treasury Secretary Janet Yellen has again called on Congress to raise or suspend the U.S. debt ceiling, saying that otherwise the government will run out of money to pay its bills sometime in October.
- In a meeting held between Wall Street executives and China's top regulators, the latter have stated that the latest actions they have taken against their various industries are aimed at strengthening regulations for companies with consumer-oriented platforms and improving data privacy and national security.
- The week will see monetary policy meetings in different countries, on the one hand the Bank of Japan is expected to keep its policy steady, but may warn about growing risks to exports due to supply chain disruptions. On the other hand, Norway's central bank will become the first developed country to raise rates since the pandemic, probably raising its main rate from 0% to 0.25%. Finally, the Bank of England is expected to maintain its current monetary policy at its meeting on Thursday.
Other important points
- U.K. energy companies are seeking a massive government bailout as a surge in gas and electricity prices threatens to drive suppliers out of business. Prime Minister Boris Johnson said rising natural gas prices are a "temporary" problem.
- Pfizer Inc and BioNTech SE have reported that their COVID-19 vaccine induced a robust immune response in children aged 5 to 11 years, so they plan to seek authorization to use the vaccine in children in that age range in the United States, Europe and elsewhere as soon as possible. Top U.S. health officials believe regulators could make a decision within three weeks of the companies' submission of the licensing application.
- The liquidity problems that the Chinese conglomerate is reportedly facing Evergrande is an issue of growing concern to the market. In the last two weeks, its debt rating has been downgraded twice and it is expected that it will not be able to meet its obligations this week. Many news media have started to compare this event to the Lehman Brothers crisis in the US, as this drawback could trigger a major crisis. For now the concern is spreading to the financial markets in Asia and there are warnings that it could spread further.
- Public holidays in Asia, Monday the 20th is a holiday for markets in Japan, China and South Korea and Tuesday the 21st only China, which in the face of equity market declines in Hong Kong adds to the tension. Interest payments on two Evergrande notes are due on Thursday, the day China also returns from vacation, this could be a turning point.
Economic calendar
Monday 20
JPY: Public holiday
CNY: Public holiday
Tuesday 21
CNY: Public holiday
AUD: Monetary Policy Meeting Minutes
USA: Building Permits Data
Wednesday 22
CNY: PBoC Prime Lending Rate
JPY: BoJ Monetary Policy Statements
USA: Economic projections and FOMC statement
USA: Interest rate decision and FOMC press conference
Thursday 23
CHF: Interest rate decision
ALE: Germany Manufacturing PMI
GBP: PMI Composite, Manufacturing and Services PMIs
USA: New claims for unemployment benefits
Friday 24
ALE: Ifo index of business confidence in Germany
USA: Remarks by Jerome Powell, Chairman of the Fed
