Dow -1.23%, S&P 500 -1.60%, Nasdaq -2.24%, Russell -2.03%, SOX -1.43%, Eurostoxx -2.9%, SMI closed (National Day).
Market news is rich in this summer. Before we apituate on the poor Helvetia abused by a large ubiquitous blonde, let us try to take stock.
By taking a step back, we can think that a golden buckle is again, this situation where the economic cycle (from the United States, we focus on the locomotive) is neither too hot nor too cold, a phenomenon which often appeals to the greatest number of market players. The general feeling seems generally solid despite high actions valuations, an American budget overheating, widely ignored by the market and a globally tense geopolitical landscape. The United States equity markets are evolving close to its historic records, credit spreats have tightened somewhat and volatility, even if it wakes up on Friday, remains low. We also keep in mind the fight of current chiefs, president of the United States against president of the Fed, the latter resistant to the tsunami of threats, insults and pressures orchestrated by whom you know. Whatever the outcome of this affair, it does not feel good for the market which needs a captain firmly in place at the helm of the Federal Reserve, the only and only orchestra head of the Grand World Finance concert, does not displease its best enemy.
The trade tensions induced by the prices decreed all over the place by the same best enemy of the Fed remain omnipresent in the spirits, we talk about it every day in the financial press. The market for its part seems to accommodate it, is to follow and check.
Finally, the macro evolves slowly. The US job market, hitherto solid with moderate wages, shows signs of breathlessness, especially in services. If this is confirmed, companies will have more difficulty in passing on their costs, which would weigh on the margins and would change the concerns of the risk of inflation to that of an economic slowdown. Paradoxically, inflation seems to wake up, the speakers seem to favor the labor market, expectations of rate reductions by the Fed on September 17, take off at 82% this morning. The market provides two cups this year again.
As we can see, the stock market landscape is opaque, but the lack of visibility is one of the worst enemies of the bulls. The current resilience of the clues is impressive, it may be explained by abundant liquidity, still waiting to have come out of the monetary market to get to work.
The Friday session is shaken by pricing turbulence, the rates are announced as planned, some countries take much more expensive than others (notably Canada, Brazil, India and Switzerland), the slowdown in the job market in July does the rest, the clues go south, we came to touch new higher historicals the day before, all this is very relative. We note that it is the cyclical values that drink the most Friday on the stock market planet, see for example the fall of 2.9% of the French CAC40. Banks also suffer. At Wall Street we especially bazard tech and discretionary consumption. The podium of the day of the SPX consists of health, basic consumer goods and utilities, a day marked under the seal of risk aversion therefore. Amazon (AMZN -8.27%) and Apple (aappl -2.5%) digest their quarterly and press the head of tech mastodons. Volatility finds a few colors, the VIX gains 22% at 20.38, it breaks its mobile averages at 50 and 200 days and we will immediately calm the ardor of the grass roubini, it is far too early to get bull sulphate, the current level of the index of fear of Wall Street is low, it does not indicate anything particular, we will certainly follow its evolution but the fire There is no. Besides, if we look at the S & P500 equity index (SPW), we see that it only recedes 1.09% against 1.6% in the SPX, it is therefore clearly the 7 magnificent who are the subject of dispensing on Friday, we take the profits where there is the most to harvest, for its part the army is still doing rather well and you greet you from the top of its hill.
The bond market takes note of the monthly American employment figures, the yield of US 10 years fell to 4.25%, it sees its next support at 4.20%. The MOVE index (Bond equivalent of VIX) earns 5% to 83.83, there too a rather reasonable level.
On the coins, the dollar rebound is challenged by the Cover, the EUR/USD pair goes up violently on Friday, from 1,1392 to 1.1597, to evolve this morning to 1.1552, the 50 days Rode to 1.1582, it is to be followed closely.
We look at the Macro on Friday. In July, non-agricultural job creations increased by 73,000 in the United States, a figure below the expectations of the market which were around 110,000. Data from the months of May and June is revised downwards, with a total of 258,000 less jobs. The unemployment rate rises slightly, from 4.1% to 4.2%. Jobs in the health sector are progressing, while those of the federal government are continuing their withdrawal. The ISM Manufacturer index for July comes out at 48.0, below the consensus of 49.5 and the level of 49.0 in June. The components linked to new orders and production are improving, but that of employment sinks more into negative territory. The final version of the consumer confidence index (UMICH) drops slightly compared to the first estimate. Households are not really optimistic, even if their concerns have been decreasing since April. Inflation anticipations to one year are increasing slightly, while those at five are retreating a little. Construction spending in June dropped by 0.4% compared to the previous month, unlike forecasts that were tabling on a slight increase.
On the side of the federal reserve, Michelle Bowman believes that there is no longer justification to maintain the current level of monetary policy, given the slowdown in employment and the reduction in the risk of inflationary overheating. Christopher Waller makes a similar observation, noting that the creation of jobs in the private sector is practically stopped and that customs prices should have only one punctual effect on prices. Conversely, Cleveland’s FED Beth Hammack stresses that data of a single month are not enough to draw solid conclusions, recalling that inflation has exceeded the target of the Fed for four and a half years. Raphael Bostic of the Atlanta Fed observes a more generalized weakening of the labor market, while still expressing concerns about inflation. Finally, Governor Adriana Kugler announces her resignation from August 8 in order to resume her post as a professor at the University of Georgetown. His mandate would normally ended in January 2026.
On the macro-economic menu of the day, orders from American factories in June will be published at 4:00 p.m.
Berkshire Hathaway announces a depreciation of $ 3.76 billion on Kraft Heinz on the sidelines of his quarterly results. Tesla calls on her conviction to pay $ 243 million to Florida after a death involving her autonomot autonomous driving system. The unionized employees of Boeing in Saint-Louis reject the last offer and will go on strike on Monday.
This morning and this morning in Asia this morning, the indices treat upwards except Tokyo, which lost 1.25% in the bell. Hong Kong takes 0.7%, Shanghai advances 0.66%, Seoul rises by 0.91%and the NIFTY50 gains 0.53%. The future SPX recovers 0.4% and Europe opens up 0.4%.
In Switzerland, the festival of 1is August was well rotten by the now famous 39%. This morning the SMI opens up more than 2%, to receive 1.4%. You have to keep in mind that, national holiday requires, the index was closed on Friday, while the Eurostoxx took a pretty 2.9% in the gums. Catching obliges, we can almost consider that SMI is up today, it is rather surprising and to follow.
Quite happy not to have mentioned the name of who you know once in this return of vacation, it was difficult …
