Global markets are at an interesting juncture today. The S&P 500 has had its best weekly run since October 2022, and as Deutsche Bank’s well-regarded macroeconomic team highlights, the index has now moved to within 2% of all-time highs. How different the current situation looks compared to the one from a fortnight ago.
The end of the week sees the start of the central bankers' annual symposium in Jackson Hole, Wyoming. The meeting of the great and good kicks off formally on Thursday and runs through to the weekend. US Federal Reserve chair Jerome Powell is scheduled to speak on Friday at 3pm (UK time). Bank of England governor Andrew Bailey is expected to speak on Friday, with the European Central Bank’s chief economist Philip Lane in Saturday’s session.
Looking back at last week’s movers, the Nikkei 225 added 8.7%, though it's weaker this morning on yen strength. The Japanese currency has firmed against the US dollar by just over 1.3% in early trade, and USD/JPY now sits at ¥145.62.
The US dollar index is also weaker, down by 0.33% this morning and by almost 1% over the last week. The weaker dollar hasn't helped commodity prices this morning. Crude is trading lower in Europe with both Brent and WTI down on the day, the latter by 0.6%. WTI has lost 4.89% over the last week compared to a 3.78% fall in the price of Brent.
Gold opened flat this morning, while silver has made modest gains and is trying to establish itself above $29 per ounce to build on last week’s 3.82% gains.
Perhaps the highlight of Friday’s trade in Europe was the 10.4% gain seen in Germany’s Bayer AG, which came as US courts ruled in favour of the Agri Chemicals group in the long-running litigation over its Round Up weed killer. The decision absolves Bayer of some liability in the case and contradicts previous rulings. That contradiction could open the door to a Supreme Court hearing in the US, which could settle the matter once and for all. Bayer’s share price remains down by 13.8% year-to-date, however.
Last week was a good week for popular technology stocks in the US, with Nvidia rallying almost 19%, while Super Micro Computer added 23.59%, and Micron Technology rose by just over 16%. The biggest weekly gainer within the S&P 500 though was Starbucks, which finished the week up by more than 26% as the market embraced the change of CEO at the troubled business.
In the UK, the biggest weekly gainers in the FTSE 100 were Entain, up by 14.3%, and BT Group, which added 11.4% as a significant stake in the company changed hands. The Sunday Times suggests that the buyer of the 24% stake in BT, Bharti Airtel, may have designs on acquiring the whole business.
Looking at the macroeconomic calendar, EU inflation data is expected tomorrow morning, as well as speeches from two Fed governors later in the day. On Wednesday the release of the latest FOMC minutes is scheduled, ahead of a wealth of PMI data onThursday.
European equity indices have opened lower, taking their lead from the Nikkei, as have CFDs on US indices. However, the losses at the time of writing are very modest, with the Nasdaq 100 lower by 0.18% for example. A couple of exceptions stand out, however, these being the Italian MIB, up by 0.18%, and the Spanish IBEX, which added 0.21%.
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