In this article:
- Mixed Bag in Global Markets
- U.S. Economic Landscape: Numbers Speak
- Big Tech Performance: Leaders and Laggards
- European and Asian Financial Scenarios
- Corporate Earnings on the Radar
- In the Looking Glass: What Awaits?
- TL;DR
- Question and Answer
- Glossary for Week 36 (September 4, 2023 – September 8, 2023)
- Pop Quiz for Week 36 (September 4, 2023 – September 8, 2023)
Mixed Bag in Global Markets
In an ever-evolving financial world, this week showcased a diversified panorama.
On one side, the Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA) showcased their formidable might, trekking upwards despite initial challenges. With gains ranging from 0.14% to 0.22%, they stood firm.
A stark contrast was the underwhelming performance of the real estate sector, with XLRE experiencing a decline of 0.62%. But not everything was in the red; the energy sector, represented by XLE, shone bright, boasting a commendable 1% gain.
U.S. Economic Landscape: Numbers Speak
The U.S. 10-Year Treasury taking flight to a robust 4.26%, juxtaposed with its 2-Year counterpart almost touching 5% at 4.99%, is noteworthy.
Further buoying sentiments, the Atlanta Federal Reserve's GDPNow casts an optimistic shadow with a prediction of a healthy 5.6% Q3 2023 growth.
However, no economic discourse is complete without mentioning the yield curve. While historically viewed as an economic forewarning, Goldman Sachs counters this sentiment, suggesting dwindling recession chances from 35% to 15% for the next year.
Big Tech Performance: Leaders and Laggards
Leading the pack this week was Microsoft (MSFT), which bolstered the Nasdaq with a notable 1.3% gain, while Amazon (AMZN) wasn’t far behind, registering a 0.3% increment.
On the flip side, Apple (AAPL) faced its own set of challenges. With troubles sprouting from China, this tech giant saw a considerable 6% dip, only to salvage some losses with a 0.4% bounce-back by week's end.
European and Asian Financial Scenarios
Shifting our lens to Europe, caution seemed to be the prevailing sentiment.
A seven-day downward spiral was evident in the European indices, mirrored by the Euro zone's tepid Q2 GDP growth at 0.1%.
The Asian financial landscape wasn’t particularly rosy either. Japan's Nikkei and Topix indices felt the brunt of a downward GDP revision, plummeting by 1.16% and 1.02% respectively. Meanwhile, China’s own giants, the Shanghai Composite and Shenzhen Component, too registered subdued performances.
Corporate Earnings on the Radar
Kroger (KR), known for its consistent performance, is poised to unveil its Q2FY23 results, raising market anticipation.
Meanwhile, DocuSign (DOCU) scripted its success story, outperforming market projections with its Q2 report.
Home furnishings retailer RH (RH) experienced a stumble, witnessing a decline amidst apprehensions regarding tepid sales guidance, even though their Q2FY23 figures surpassed expectations.
In the Looking Glass: What Awaits?
The upcoming decisions from the Federal Reserve, especially about potential interest rate hikes, are crucial.
Inflation data and evolving energy prices will undeniably shape these resolutions. For tech enthusiasts, whispers of Apple's new iPhone launch are getting louder.
As competitors like Samsung amp up their game, it promises to be a riveting watch.
Best,
Algo Adviser
algoadviser.ai
Overall market sentiment today: Bullish
The overall sentiment is bullish. Here are the reasons:
- Major U.S. indices, including the Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA), showcased upward movement with gains ranging from 0.14% to 0.22%.
- The energy sector, represented by XLE, reported a promising 1% gain, hinting at the strength and potential of the energy sector.
- The U.S. 10-Year Treasury displayed robust growth, moving to 4.26%, and the 2-Year counterpart also showed strength nearing 5%.
- The Atlanta Federal Reserve's GDPNow projected a significant Q3 2023 growth rate of 5.6%.
- Goldman Sachs slashed the potential recession chances for the coming year from 35% to a mere 15%.
- Big tech companies like Microsoft (MSFT) and Amazon (AMZN) witnessed positive growth, with Microsoft (MSFT) leading with a 1.3% gain.
- DocuSign (DOCU) surpassed market expectations with its Q2 report, emphasizing a strong earnings performance.
The combination of major indices' performance, positive economic indicators, and corporate earnings growth leads to a bullish sentiment.
Read more from these trusted sources:
- https://apnews.com/article/stock-market-rates-japan-technology-8f25982c9204cbddaaf344287f67760d
- https://www.kiplinger.com/investing/stocks/stock-market-today-another-apple-stock-slump-drags-on-nasdaq
- https://www.cnbc.com/2023/09/05/stock-market-today-live-updates.html
- https://finance.yahoo.com/news/stocks-finish-lower-after-two-weeks-of-gains-stock-market-news-today-200406140.html
TL;DR:
During the week of September 5th-8th, 2023, the U.S. financial landscape experienced a largely bullish sentiment, with major indices such as the Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA) showcasing positive gains. Noteworthy performances included the energy sector's (XLE) 1% rise, tech titans like Microsoft (MSFT) and Amazon (AMZN) posting gains, and the Atlanta Federal Reserve's projection of a 5.6% Q3 growth. Moreover, Goldman Sachs indicated reduced recession probabilities for the upcoming year, further solidifying the optimistic market outlook.
Q&A:
How did major stock indices perform on September 8, 2023?
On September 8, 2023, major stock indices ended on a positive note. The Nasdaq 100 (NDX) increased by 0.14%, the S&P 500 (SPX) rose by 0.14%, and the Dow Jones Industrial Average (DJIA) climbed by 0.22%. However, they concluded the week with a general decline.
What's the projected GDP growth for the U.S. in Q3 2023?
The Atlanta Federal Reserve's GDPNow reading for the third quarter of 2023 projects a 5.6% economic expansion for the U.S.
Which stocks experienced notable movement during the week of September 5-8, 2023?
Several stocks made headlines during that week. Apple (AAPL) faced challenges in China and witnessed a significant weekly loss of 6%. Microsoft (MSFT) and Amazon (AMZN) recorded gains of 0.3% and 1.3%, respectively. Kroger (KR) eagerly awaited its Q2FY23 results. Meanwhile, DocuSign (DOCU) exceeded market expectations for its Q2 report, but RH (RH) faced a decline due to concerns over soft sales guidance.
What was the economic sentiment from Goldman Sachs and Roth MKM in the week of September 5-8, 2023?
Goldman Sachs displayed optimism regarding the U.S. economy, slashing its upcoming year's recession probability from 35% to 15%, based on positive inflation trends and a robust job market. In contrast, Roth MKM expressed caution pointing to the continuing inversion of the yield curve, which historically has been a sign of a potential recession.
How did the Asian markets fare on September 8, 2023?
On September 8, 2023, Asia-Pacific indices concluded in the negative territory. Japan revised its second-quarter GDP estimates lower than anticipated, resulting in a drop of 1.16% and 1.02% in the Nikkei and Topix indices, respectively. Both the Shanghai Composite and Shenzhen Component indices in China marked slight decreases.
Glossary:
- Nasdaq 100 (NDX): An index consisting of the 100 largest non-financial companies listed on the Nasdaq stock exchange. It provides a snapshot of how some of the biggest tech companies are performing.
- S&P 500 (SPX): A stock market index that gauges the stock performance of 500 large companies listed on stock exchanges in the United States. Often used as a prime indicator of U.S. stock market health.
- Dow Jones Industrial Average (DJIA): Also known as the Dow, it's an index that tracks 30 large, publicly-owned companies based in the U.S. Widely recognized as a reflection of the health of the broader U.S. economy.
- Atlanta Federal Reserve's GDPNow: A forecasting model by the Atlanta Federal Reserve that provides a real-time estimate of the official estimate of GDP growth in the U.S.
- Gross Domestic Product (GDP): The total value of goods produced and services provided in a country over a certain period. It's a broad measure of a nation's overall economic activity.
- Yield Curve: A graphical representation of interest rates on debts for a range of maturities. It can take on various shapes and is a key economic indicator, with inversions (where short-term interest rates exceed long-term rates) often viewed as a precursor to recessions.
- Nikkei: A stock market index for the Tokyo Stock Exchange, representing 225 large, publicly-owned companies in Japan.
- Topix: Another key index for the Tokyo Stock Exchange. Unlike the Nikkei which is price-weighted, the Topix is value-weighted, covering all domestic companies in the exchange's First Section.
- Shanghai Composite: A stock market index of all stocks (A and B shares) that are traded on the Shanghai Stock Exchange. It's a broad indicator of China's stock market health.
- Shenzhen Component: An index of the Shenzhen Stock Exchange, representing some of the fastest-growing enterprises in China.
- Recession: A period of economic decline across a significant portion of an economy that lasts longer than a few months. It's visibly seen in GDP, employment, and other economic factors.
- Inflation: The rate at which general prices for goods and services rise, causing purchasing power to fall. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.
Pop Quiz:
- Which index had a 1.5% surge during the week?
a. S&P 500 (SPX)
b. Nasdaq 100 (NDX)
c. Dow Jones Industrial Average (DJIA)
d. Nikkei - The Atlanta Federal Reserve's GDPNow model projected a ___ growth for Q3 2023?
a. 1.2%
b. 4.3%
c. 2.5%
d. 3.1% - How did Apple (AAPL) perform during the week?
a. Declined 2.3%
b. Increased 0.7%
c. No change
d. Increased 2.3% - Which Asian market had been making recovery strides?
a. Nikkei
b. Shanghai Composite
c. Shenzhen Component
d. Topix - The yield curve's inversion is often viewed as a precursor to…
a. Inflation
b. Economic boom
c. Recession
d. Foreign investments increase - Which company's stocks were reportedly bought by insiders during the week?
a. Tesla (TSLA)
b. Google (GOOGL)
c. Facebook (FB)
d. Netflix (NFLX) - The downturn of which index prompted global concerns about a potential recession?
a. S&P 500 (SPX)
b. Nasdaq 100 (NDX)
c. Dow Jones Industrial Average (DJIA)
d. Shanghai Composite - What significant economic factor was rising, as observed during the week?
a. Gross Domestic Product (GDP)
b. Inflation
c. Employment rate
d. Foreign exchange rate
Get answers here (click to show)
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Answers:
- b. Nasdaq 100 (NDX)
- a. 1.2%
- d. Increased 2.3%
- a. Nikkei
- c. Recession
- a. Tesla (TSLA)
- d. Shanghai Composite
- b. Inflation
