Global markets are experiencing a pivotal moment today. The S&P 500 has just recorded its most significant weekly gain since October 2022, moving within 2% of its all-time highs. This sharp turnaround contrasts dramatically with the market sentiment from just two weeks ago, highlighting the dynamic nature of the financial landscape.
As we approach the end of the week, attention shifts to the central bankers' annual symposium in Jackson Hole, Wyoming. This prestigious gathering of top financial policymakers begins formally on Thursday and extends through the weekend. Key figures include US Federal Reserve Chair Jerome Powell, who is slated to speak on Friday at 3 PM UK time. Bank of England Governor Andrew Bailey is also expected to make remarks on Friday, with the European Central Bank's Chief Economist Philip Lane scheduled for Saturday’s session. The insights from these speeches could offer significant clues about future monetary policy and economic direction.
Turning to last week’s market movements, the Nikkei 225 saw a notable increase of 8.7%. However, this morning the index is under pressure due to a strengthening yen. The Japanese currency has appreciated against the US dollar by just over 1.3% in early trading, pushing the USD/JPY rate down to ¥145.62. This yen strength is influencing various aspects of the market, particularly in relation to Japanese exports and international trade dynamics.
In the US, the dollar index has also weakened, down 0.33% this morning and nearly 1% over the past week. Despite this, the weaker dollar has not provided much relief for commodity prices. Crude oil prices are lower across Europe, with both Brent and WTI experiencing declines. WTI crude has fallen by 0.6% today and has lost 4.89% over the past week. Brent crude has seen a 3.78% decline during the same period, reflecting broader concerns about global supply and demand balances.
Gold opened flat this morning, while silver has shown modest gains, attempting to solidify above $29 per ounce. Silver’s recent performance has been positive, building on a 3.82% increase from last week. The precious metals market continues to be influenced by broader economic factors, including inflation expectations and currency fluctuations.
A notable highlight from Friday’s European trading was the 10.4% rise in Bayer AG's stock price. This surge followed a favorable ruling by US courts regarding Bayer's long-standing litigation over its Roundup weed killer. The court's decision reduces Bayer's liability and contradicts previous rulings, potentially paving the way for a Supreme Court review. While this legal victory is significant, Bayer's share price remains down 13.8% year-to-date, indicating ongoing challenges despite this positive development.
In the technology sector, US stocks had a strong week. Nvidia surged nearly 19%, driven by optimism about its growth prospects and technological advancements. Super Micro Computer also saw a substantial increase, rising by 23.59%, while Micron Technology experienced a gain of just over 16%. Among the S&P 500 constituents, Starbucks stood out as the biggest weekly gainer, with its share price soaring by more than 26%. This remarkable performance reflects market enthusiasm for the company’s recent leadership changes and strategic adjustments.
In the UK, the FTSE 100 saw significant movements as well. Entain, a prominent player in the betting and gaming industry, gained 14.3%, while BT Group added 11.4%, following the sale of a substantial stake in the company. The Sunday Times has reported that Bharti Airtel, the buyer of the 24% stake in BT, might be considering acquiring the entire company, which could further impact BT’s stock and market positioning.
Looking ahead, the macroeconomic calendar is packed with important events. Tomorrow morning, we expect the release of EU inflation data, which will provide insights into the region's economic pressures and price trends. Additionally, speeches from two Federal Reserve governors are scheduled for later in the day, potentially offering further guidance on US monetary policy. On Wednesday, the latest FOMC minutes will be released, giving additional context to the Fed's recent decisions and discussions. The week will culminate with a wealth of PMI data on Thursday, shedding light on economic activity and business sentiment across various sectors.
European equity indices have opened lower, reflecting a cautious sentiment following the movements in the Nikkei. CFDs on US indices are also showing modest losses at the time of writing, with the Nasdaq 100 down by 0.18%. However, a couple of exceptions stand out: the Italian MIB has increased by 0.18%, and the Spanish IBEX has risen by 0.21%. These regional indices are showing resilience and could indicate differing economic conditions or investor sentiments within Europe.
As the week progresses, market participants will be closely watching the central bankers’ symposium for clues on future economic policies and their potential impacts on global markets. The ongoing developments in commodity prices, currency movements, and macroeconomic indicators will continue to shape the financial landscape, presenting both opportunities and challenges for investors.
