Hey Folks, markets are showing signs up weakness. Where are we going from here and what key charts should we be looking at? Get my take in this week’s round-up.
WEEKLY SOUND BITES:
- U.S. equities pulled back for the week but not before the S&P reached all-time highs on Monday, which was more than double from its intraday low of 2,192 on March 23, 2020….also, Small-Cap stocks lagged for the week, with the Russell briefly falling into correction territory, down more than 10% from its March 2021 all-time highs. More signs emerged of an economic slowdown in China while the SEC urged caution when investing in Chinese stocks because of regulatory uncertainty…the US Fed released the minutes of its latest policy meeting, in which most members indicated that they thought tapering could begin by the end of the year, yet the Dallas Fed President Kaplan may have helped spark a rally Friday, after he suggested that he might favor delaying tapering if the delta variant takes a deeper toll on the economy.
- Stocks fell on Tuesday, after the Commerce Department reported that retail sales slumped 1.1% in July, although off an upwardly revised June base…The rest of the week’s economic data were mixed, particularly in the housing sector. July housing starts fell 7%, much more than consensus expectations, but off upwardly revised May and June numbers… A measure of builder sentiment fell back to its lowest level in a year, hampered in part by labor and building supply worries. Conversely, industrial production rose 0.9% in July, more than expected, due in part to automakers moderating or canceling plans to shut down production lines. Weekly jobless claims fell to 348,000, a bigger drop than expected and another pandemic-era low.
- U.S. Treasury yields decreased through most of the week, with the yield on the benchmark 10-year Treasury note touching its lowest level since August 5…fears surrounding the delta variant, dovish sentiment from some Fed policymakers, and the weaker-than-expected retail sales print supported the week’s rally…
- European stock benchmarks pulled back amid global concerns about the spread of the delta variant of the coronavirus and a slowdown in China…Core eurozone bond yields drifted lower in the week as investors favored lower-risk assets…inflation in the eurozone increased 2.2% for the July annual period, up from 1.9% in June and slightly higher than the European Central Bank’s 2% target…yet Inflation in the UK rose less than expected in July and cooled from June’s levels coming in at 2.0% in July.
- Japan’s stock markets finished the week sharply lower while news that Japanese carmaker Toyota Motor was to cut production for September by 40% from its previous plan cast doubt on the economic recovery from pandemic lows… The government’s decision to extend the coronavirus state of emergency also dampened sentiment…although we see Japan’s GDP expanded by an annualized 1.3% in the second quarter of 2021, ahead of consensus estimates. It followed a 3.7% contraction in the prior quarter.
- Chinese stocks slumped as Beijing’s regulatory clamp down on the technology sector continues… As of Friday, stock markets of China and Hong Kong lost more than USD 560 billion in market value, according to Reuters… The Chinese renminbi currency hit a three-week low of 6.5059 against the U.S. dollar on Friday… On the economic front, monthly indicators for July missed expectations and showed that economic activity slowed more than expected. Heavy flooding across China and coronavirus outbreaks caused by the delta variant weighed on retail sales and consumer services.
Enjoy this Weekly Round-Up;
Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !
hpb
