Weekly Excerpt 09/27/2021
Weekly summary from September 20 to 24
- The U.S. equity market closed the week in positive territory despite having started Monday with significant declines for the main indices. The possible reduction of economic stimulus, the possible contagion effect of the Evergrande problem and the Chinese crackdown on new sectors have not been enough to completely change the mood of investors. Six of the eleven sectors of the S&P 500 closed in positive territory, including the following sectors value such as Energy +4,70% and Financial +2,21% have been the best performers.
- Europe has managed to close the week in positive territory, with the main indices posting gains above 1%. The leading sectors in a positive week have been the Travel & Leisure (SXTP +3.89%) and the Oil & Gas sector (SXEP +3.72%). On Friday 24, the European market suffered declines after three consecutive days of gains.
- The U.S. equity sector has seen the largest outflow of funds from the market in the last three years. According to EPFR Global data, $28.6 billion has been withdrawn from the equity market, giving the impression that investors are considering a rotation to more defensive assets.
- On the side of the monetary policy meeting held by the FED, no date has been announced for the tapering of the purchase program, but it has been mentioned that if the economy continues to show signs of recovery the tapering will be justified. On the other hand, interest rates remain unchanged at between 0% and 0.25%, but it has been highlighted that now half of the committee members see a rate hike in 2022 as appropriate (two more participants than three months ago).
- Regarding growth forecasts, the Federal Reserve revised its inflation forecast to 4.2% until the end of this year versus 3.4% estimated in June. Regarding the U.S. GDP estimate, the data has been revised significantly downward to 5.9% versus 7% annual expansion forecast in June.
- The cryptocurrency sector has closed the week with negative news, after China's central bank (PBOC) has officially declared that all transactions related to these digital assets are illegal and should be banned.
- News of the week has been the liquidity problem faced by Asian construction company Evergrande. In this regard, the week has ended with news that the company has not been able to meet all its obligations. The company has not made any statement in this regard, but has a grace period of 30 days before the bond is considered as default.
| AMERICA | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| DOW JONES INDUS. AVG | 34.798,00 | 0,62% | 13,69% |
| S&P 500 INDEX | 4.455,48 | 0,51% | 18,62% |
| NASDAQ COMPOSITE | 15.047,70 | 0,02% | 16,75% |
| EUROPE | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| Euro Stoxx 50 Pr | 4.158,51 | 0,67% | 17,05% |
| FTSE 100 INDEX | 7.051,48 | 1,26% | 9,15% |
| CAC 40 INDEX | 6.638,46 | 1,04% | 19,58% |
| DAX INDEX | 15.531,75 | 0,27% | 13,22% |
| IBEX 35 INDEX | 8.873,10 | 1,28% | 9,90% |
| SWISS MARKET INDEX | 11.817,20 | -0,99% | 10,40% |
| ASIA | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| NIKKEI 225 | 30.248,81 | -0,86% | 10,22% |
| HANG SENG INDEX | 24.192,16 | -1,93% | -11,16% |
| CSI 300 INDEX | 4.849,43 | -0,37% | -6,94% |
| BONUS | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| US TREASURY 10Y | 1,45 | 6,81% | 118,40% |
| US Generic Govt 2 Yr | 0,27 | 22,50% | 104,52% |
| GERMANY 10 YR | - 0,23 | 18,67% | 54,49% |
| UK 10 Yr | 0,93 | 9,30% | 322,37% |
| COMMODITIES | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| WTI | 73,99 | 2,79% | 52,49% |
| BRENT | 78,04 | 3,58% | 50,66% |
| NATURAL GAS | 5,17 | 1,19% | 103,47% |
| CORN | 525,50 | -0,33% | 8,57% |
| WHEAT | 723,00 | 2,01% | 12,88% |
| GOLD $/oz | 1.745,10 | -0,25% | -7,92% |
| SILVER $/Oz | 22,39 | 0,42% | -15,24% |
| COPPER | 428,75 | 0,99% | 21,84% |
| PLATINUM | 983,88 | 4,36% | -8,23% |
| COINS | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| EURUSD | 1,172 | -0,06% | -4,08% |
| AUDUSD | 0,726 | -0,10% | -5,67% |
| CADUSD | 0,790 | 0,92% | -0,63% |
| CHFUSD | 1,081 | 0,78% | 4,54% |
| GBPUSD | 1,367 | -0,50% | 0,01% |
| CNYUSD | 0,155 | -0,52% | -0,93% |
| JPYUSD | 0,009 | -0,70% | 7,21% |
| USDBRL | 5,345 | 1,05% | -2,74% |
| USDMXN | 20,066 | 0,24% | -0,76% |
| USDCOP | 3837,65 | 0,20% | -10,63% |
| XBTUSD | 42481,32 | -9,60% | 46,51% |
To keep in mind during the week
- Investors will be watching closely for further news on the economic woes of Asian company Evergrande. For now, Evergrande's electric car unit will not proceed with a proposed share issue (in yuan) according to a document filed with the Hong Kong stock exchange, adding further uncertainty to the company's liquidity situation.
- Investors will be closely watching developments in Washington, D.C., as lawmakers are expected to rush to pass legislation to avert a government shutdown before the end of the month and debate raising the U.S. debt ceiling. The Senate is expected to vote Monday, the 27th, on a procedural motion on legislation passed by the House last week. That bill included a plan to temporarily fund the government through early December and was accompanied by a measure to raise the government's debt ceiling through December 2022.
- Nancy Pelosi, Speaker of the U.S. House of Representatives has pledged on Sunday 26 that the Democratic party will pass the bipartisan infrastructure bill this week and continue to push the bill for $3.5 trillion to combat climate change and promote social policies, although she has acknowledged that the total amount will most likely decrease.
- Investors are very attentive to oil price movements, which in recent days has marked prices not seen since 2018. U.S. oil inventories are at a 3-year low. This could be an indication of a supply deficit with healthy demand.
Other important points
- The energy crisis in Europe has governments warning of blackouts and that factories could be forced to close, which could continue to the rest of the world. There is not enough gasoline to fuel the post-pandemic recovery and refill depleted stocks ahead of the cold months. Inventories at European storage facilities are at historically low levels for this time of year.
- China could be entering an energy supply crisis that could hit its economy hard, as half of China's 23 provinces failed to meet energy intensity targets set by Beijing and are now under pressure to curb energy use.
- The Chinese government continues with its restrictions, on Monday 27th, the National Broadcasting Administration has published the decision in a statement that it banned advertisements for medical beauty loans on its TVs, radios and online platforms, saying that such advertisements lured young people with low interest rates, misled consumers and caused adverse effects.
- Germany's federal election results point to a change, according to the latest news the Social Democrats narrowly won Sunday's national election and claimed a "clear mandate" to lead a government for the first time since 2005 and end 16 years of conservative rule under Angela Merkel.
Read more
- UK Prime Minister Boris Johnson is under increasing pressure to ease the supply chain crisis. The government has announced that it will issue 5,000 short-term visas for truck drivers and 5,500 for poultry workers in a significant U-turn on one of the key Brexit red lines. The government will also temporarily remove competition rules and allow shippers, producers, suppliers and retailers to work together.
- Two of the world's largest Bitcoin exchanges have halted new Chinese user registrations and one will withdraw current accounts, taking steps to comply with Beijing's latest cryptocurrency ban. Exchange operators Huobi and Binance have stopped allowing traders to use mainland Chinese mobile numbers to register new accounts after the People's Bank of China said Friday that all cryptocurrency-related transactions will be considered illicit financial activity.
- Tesla CEO Elon Musk has announced that the company is preparing for its busiest week of vehicle deliveries in its history. According to latest news Tesla's Shanghai factory is expected to produce 300,000 cars in the first nine months of the year, capped by a delivery surge at the end of the July-September quarter, despite a global semiconductor shortage.
Corporate Calendar
Before the apexmarket opening
| Monday 27 | Tuesday 28 | Wednesday 29 | Thursday 30 |
|---|---|---|---|
| iBio | Factset | Jabil | Carmax |
| S&W | IHS Markit | Enerpac | Bed Bath & Beyond |
| Thor | Worthington |
After the blindrre of the market
| Monday 27 | Tuesday 28 | Wednesday 29 | Thursday 30 |
|---|---|---|---|
| Aurora | Micron | Novagold | Jefferies |
| Aytu | VWE | Landec | |
| Concentrix | CM | MillerKnoll |
Economic Calendar
Monday 27
EURO: Appearance of Cristine Lagarde, President of the ECB
GBP: Appearance of BoE's Gov Bailey
USA: Durable goods orders
Tuesday 28
BRL: Minutes of the CMP meeting of the Central Bank of Brazil.
USA: The Conference Board Consumer Confidence
Wednesday 29
USA: Pending home sales
USA: IEA crude oil inventories
Thursday 30
CNY: Manufacturing PMI
GBP: GDP data
ALE: Unemployment change in Germany
USA: GDP Data
Friday 01
CNY: National Holiday
HKD: National Holiday
EURO: CPI in the euro zone
USA: ISM manufacturing PMI
