• The London Financial

Weekly Markets Round-up: 7 - 11 September 2020


By Charles Heighton (King's College London), TheLFJ Markets Editor & VP of Trading at King’s Global Markets


Keeping it brief:

A red week for US markets. Elsewhere especially in Europe, there were some gains.

Investors were focused on three major themes. Firstly, increasing political tensions between China and the US, and increasing Brexit tension. Secondly, the failure of a US stimulus package to pass the Senate at what was seen as the final chance. Finally, the revelation last week that SoftBank has been buying individual stock options in huge volumes stayed in focus as investors weighed up whether this caused the rally.


The data:

Source: MarketWatch, showing the five-day performance.


The charts:

Charts' source: TradingView, showing a five-day period.

Blow by blow:


Monday:

A mixed day as Asian markets were indecisive. While European markets gained as US markets took a day off.


APAC:

  • Indecisive and cautious session after US sell-off late last week.

  • SoftBank’s stock fell significantly, losing nearly 9 billion USD in market cap, as the market reacted to the large derivatives bets that were revealed last week.

  • This occurred despite the alleged 4 billion USD in gains.

EMEA:

  • Healthy gains across most markets.

  • FTSE gained the most due to GBP weakness.

AMER:

  • American holiday meant that US markets did not trade.

  • This lowered volumes in Europe as well.

  • A stimulus deal is expected soon in the US once again.

Beyond stocks:

  • GBP fell on trade talk woes.

  • Oil dropped to the lowest level in over a decade as Saudi Aramco announced cuts to prices on oil shipped to Asia over the weekend.

  • This later retraced slightly.


Tuesday:

The US sell-off continued possibly due to investors fearing high valuations or some profit-taking.


APAC:

  • Mostly positive session after European gains on Monday.

  • Business confidence in Australia improved slightly but was still negative.

  • Chinese markets fell after President Trump suggested decoupling the US economy from China or using massive tariffs.

EMEA:

  • British PM Johnson said the EU trade deal deadline was mid-October; if no deal is achieved, he said that they should ‘move on’.

  • Major indices fell.

  • Tech and energy stocks lagged, pulling indices down.

  • Brexit fears fuelled this decline.

AMER:

  • Markets fell from the open for the third consecutive session.

  • The NASDAQ had fallen 3% within minutes and closed 4.1% down.

  • Tesla fell 21% as it was not added to the S&P.

  • S&P fell 2.8%.

Beyond stocks:

  • Gold fell slightly despite the US sell-off.


Wednesday:

Asian markets fell following the rout on Wall Street in the previous day. US and European stocks reversed losses and gained significantly.


APAC:

  • Tech stocks dragged indices lower.

  • SoftBank shares fell 7% but retraced, closing nearly 3% down.

  • Chinese CSI 300 fell 2.3%, while the Hang Seng fell 1%.

  • ASX closed 2.2% lower.

  • Japanese Topix fell 1%.

EMEA:

  • Markets closed mostly up.

  • Stoxx 600 rose 1.6%.

  • FTSE 100 gained 1.4%.

  • DAX gained 2.1%.

AMER:

  • Markets bounced back.

  • Tesla gained 11%.

  • NASDAQ closed 2.7% up.

  • S&P gained 2%.

Beyond stocks:

  • EUR gained against the USD.

  • Forcing oil prices up.

  • US Treasury yields ticked higher.

Thursday:

A mixed day with negative sessions in Europe and America as the ECB and Congress disappointed.


APAC:

  • Nikkei hit a six-month high.

  • In USD terms, this is the highest level in three decades.

  • Boosted by internal stimulus hopes.

  • Chinese and Hong Kong markets slid as start-up stocks underperformed.

  • Regulators took steps to end speculation.

EMEA:

  • Lack of ECB action to counteract the strong EURO dented markets.

  • Stoxx 600 gained earlier in the session but reversed and closed down 0.6%.

  • Brussels threatened legal action against the UK due to the planned breach of the withdrawal agreement negotiated last year.

AMER:

  • Markets dropped.

  • S&P down 1.8%

  • NASDAQ down 2%.

  • US Congress made no progress on a stimulus deal causing bearishness.

  • This was seen as the last chance for a package.

Beyond stocks:

  • EURO gained 1.8% against the GBP on Brexit fears.

  • Oil fell.

  • Yields on German bunds rose as prices fell.


Friday:

Stocks slid again as the week wrapped up. Tensions between the US and China, and the UK and Europe are a point of focus for investors.


APAC:

  • Most markets posted moderate gains.

  • Chinese CSI 300 finished 1% up.

  • Despite gaining, the Shanghai Composite still had the worst week in two months.

  • Hang Seng gained 0.8%.

  • Tech gained some momentum.

  • Topix gained 0.7%.

  • ASX fell, as miners and tech stocks sold off.

  • Late Thursday President Trump refused to extend the deadline for the sale of TikTok.

  • A further escalation of Sino-US tensions.

EMEA:

  • Mixed day.

  • French CAC gained slightly.

  • DAX lost slightly.

  • FTSE gained 0.3%

  • Driven by pound weakness.

  • Defensive stocks rose, driven up by merger news.

  • UK and Japan announced a post-Brexit trade deal.

AMER:

  • Oracle announced positive quarterly results.

  • S&P closed basically unchanged for the day, despite swings in both directions during the session.

  • First consecutive weekly fall since May.

  • Materials was the only sector to close higher for the week.

  • NASDAQ fell 0.6%.

  • The mega-cap tech stocks dragged the market down.

  • Down 4.1% for the week, the worst since March.

  • Oracle hit a record high but later declined.

  • Dow Jones closed up 0.5%.

  • But fell 1.66% for the week.

  • US consumer prices data increasing steadily in August.

  • Peloton closed down over 4%, despite releasing forecast-beating results before the open.

Beyond stocks:

  • US government bonds gained slightly.

  • GBP fell against the EUR.


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