Mixed Signals in the Markets, The week ended on a somewhat cautious note for the stock market, as the Dow Jones managed to finish slightly in the green on Friday, breaking a four-day losing streak. In contrast, the S&P 500 remained relatively flat, while the Nasdaq experienced a minor setback with a 0.2% decline. These contrasting moves reflect the ongoing tug-of-war between market optimism and concerns over various economic factors.
One of the primary drivers of market uncertainty remains the fear of „higher-for-longer” interest rates. This apprehension is partly fueled by signals from the Federal Reserve that suggest the possibility of a more prolonged period of restrictive monetary policy or even another rate hike. The recently released minutes of the Fed’s July meeting revealed that policymakers are paying close attention to the potential upside risks to inflation. This has created a cautious atmosphere among investors, as tighter monetary policies could impact borrowing costs and corporate profitability.
Adding to the market unease are fresh credit risks emerging from China. The default risks facing major Chinese developers, combined with the failure of Country Garden’s bond payment, have triggered a surge in private credit costs in China. The ongoing property sector crisis and concerns about China’s financial stability have had a ripple effect across global markets, contributing to the cautious sentiment observed in recent sessions.
The earnings season
The earnings season continued to make waves, with a mix of positive and disappointing reports. Keysight Technologies, for instance, experienced a significant setback, losing 13.7% after its quarterly results missed estimates. Deere and Estee Lauder also faced declines of 5.3% and 3.3%, respectively, due to disappointing quarterly performances. On the other hand, Applied Materials and Ross Stores managed to buck the trend, gaining 4.1% and 5% respectively, following the release of upbeat quarterly reports.
The technological giant Meta (formerly Facebook) continued to experience a decline in its shares throughout the week, shedding more than 2%. This ongoing decline reflects investor uncertainty surrounding the company’s future trajectory and regulatory concerns.
Amid the market fluctuations, the commodities sector also saw notable movements. Palladium futures hovered around the $1,250 per ounce mark, nearing a four-year low touched on August 16 at $1,209. The declining demand outlook for palladium is partially attributed to automakers shifting towards the more cost-effective platinum. This shift is driven by changes in the automotive industry, with the growing popularity of heavy-duty vehicles that rely on platinum and the increasing market share of electric vehicles in China.
Oil prices, which had enjoyed a seven-week streak of gains, stumbled with a more than 2% drop this week. Weakening economic indicators from China and concerns about further US interest rate hikes weighed on oil prices. Overshadowing signs of tightening global supplies. China’s economic woes were exacerbated by weaker-than-expected data and an ongoing property sector crisis.
Cryptocurrency markets also displayed volatility during the week, as Bitcoin (BTC) experienced fluctuations in its price. BTC’s value slipped below $26,000 on Friday, following a rally toward $27,000 that briefly erased some of the losses from the previous day. The decline marks a roughly 11% decrease for the week. Raising comparisons to the market crash of November, which was triggered by FTX’s Sam Bankman-Fried.
TSLA Take Profit signal is lowered to 217.59:
USDCAD Stop Loss order is raised up to 1.3495: