Weekly variations*- This week’s gainers and losers- Commodities – Crypto- China under scrutiny ahead of Jackson Hole-

Weekly market updateWeekly market update
Friday 18 August 2023
Fears about the health of the Chinese economy, Fed rate hikes and tensions on the bond market have clearly weighed on the trend this week, with the major indices suffering a sudden return to risk aversion.

The summer period is likely to remain favorable to volatility, but the climate remains gloomy and expectations of further monetary tightening could prompt operators to limit their initiatives.

Next week’s highlights will be Nvidia’s results and central bankers’ statements at the Jackson Hole symposium.

Weekly variations*
US 500
4369  -2.11%Chart


TESLA, INC. -11.19%
34500.66  -2.21%



14694.84  -2.22%

Chart NASDAQ 100


FTSE 100
7262.43  -3.48%

Chart FTSE 100


1889.11$  -1.28%

Chart GOLD


81.33$  -1.83%

Chart WTI


1.09$  -0.68%


This week’s gainers and losers
On the rise:
Vinfast Auto (+100.3%): the Vietnamese automaker is off to a flying start on Wall Street. Capitalization reached $85 billion on its first day of trading, more than behemoths such as Ford, General Motors and Stellantis.
  • Yet Vinfast produced just 19,000 electric vehicles in the first half of the year. The founder owns 99% of the group: the low free float is likely to see heavy speculation. Especially as the brand is already planning to raise more capital. 
United States Steel Corporation (+36.5%): The American steel producer soared on Monday after receiving a $7.3 billion takeover offer from Cleveland-Cliffs, North America’s leading steelmaker.
  • The unsolicited offer was rejected. Esmark subsequently offered $7.8 billion. ArcelorMittal is rumored to be looking into the matter.
Ross Stores (+6.10%) America’s No. 2 distributor of major brand clothing and accessories at discount prices posted better-than-expected results. For its fiscal second quarter, the group reported adjusted earnings per share of $1.32, versus $1.17 expected by analysts. Revenues reached $4.93 billion, 4% better than consensus. It also issued a strong full-year outlook.

Sea Limited (-33.7%)
The consumer Internet company dropped on Wall Street due to disappointing results and guidance.

The company faces tough competition in the e-commerce segment, and its financial arm sees low growth.
Antofagasta (-15.7%): The British miner is down on worries over the outlook for Chinese demand, as the country faces many economic headwinds. Other miners also fell sharply this week in London.
CVS Health (-10.8%): Shares in CVS Health (CVS) fell on Thursday after insurer Blue Shield of California said it would collaborate with Amazon.com and other companies to offer “more affordable” pharmaceutical care, reducing its reliance on CVS’s pharmacy benefit management services. Amazon will provide home drug delivery, while Mark Cuban Cost Plus Drug Company will offer low-cost medications.
Chart Commodities
Energy: Weekly crude oil prices fell for the first time in over a month and a half. The rise in prices was mainly due to tight supply resulting from cuts by the Organization of the Petroleum Exporting Countries and allied producers after US commercial crude inventories fell sharply.
  • However, the consequent slowdown in China, and the resulting fears for oil orders, are allowing prices to slow. On the price front, European Brent is trading close to its highest level of the year, at USD 84.00 a barrel. US WTI is also close to its annual peak, at USD 80.00.
Metals: Gold is the focus of attention this week. On the one hand, premiums on physical gold in China reached their highest level since December 2016 this week, as economic worries stimulated fresh demand for safe-haven assets.
  • On the other hand, rising bond yields and a falling dollar continue to weigh on gold, which ends the week down at USD 1,892. Silver treads water this week, at USD 22.68 per metric ton. Nickel (USD 20220) followed suit, while aluminum and zinc were flat at USD 2160 and 2480 respectively. 
Agricultural products: Chicago wheat rose by almost 2% on Friday, as a drone strike on Moscow and a Ukrainian sea strike near Crimea rekindled fears of a war disrupting the massive Black Sea grain trade.
  • Soybeans, meanwhile, rose for the third time to their highest level in two weeks, as hot, dry weather forecast for the US Midwest raised concerns about crop stress.
Chart Commodities
Atmosphere. Weekend in Wyoming. The Fed’s minutes confirmed the fears of some investors. The governors are still concerned about inflationary risks, leaving the door open to further rate hikes. This was all it took to push bond yields to their 2022 highs, i.e. 4.33% on the US 10-year. On the other hand, China continues efforts to stimulate its economy, cutting its short-term rate by 10 basis points.

  • However, this seems too timid to revive the Chinese locomotive, and only increases the pressure on its domestic currency, particularly against the G10 currencies, whose central banks are clearly not finished with their monetary tightening cycle.

We’ll be keeping a close eye on interest rates, which, should they continue to rise, will logically weigh on the performance of the main stock market indices. Jerome Powell will no doubt have the opportunity to reframe all this at the end of next week at the Jackson Hole symposium.

Crypto. Bitcoin is down more than 10% this week, and is back at around $26,000 at the time of writing.

  • One of the main reasons for this was an article published by the WSJ, which mentioned that SpaceX, and implicitly its boss Elon Musk, would be getting rid of its bitcoins, without really knowing to what extent.

This was enough to send the market tumbling over the last 24 hours. Ether, meanwhile, suffered a little less, falling by 8% over the same period.

Historical Chart
China under scrutiny ahead of Jackson Hole
After three weeks of decline, stock market indices enter the end of August in a context of heightened tension. The situation in China’s real estate and financial sectors is worrying, and the authorities’ response appears weak.

  • On the agenda, flash PMI indices for August will be available on Wednesday for the world’s major economies. But all eyes will be on the annual Jackson Hole meeting of central bankers, to be held from Thursday to Sunday.
  • To pass the time, investors can also take a look at weekly US employment and durable goods orders (Thursday), followed by German business sentiment and US consumer confidence (Friday).

In other news, data from China will be of particular interest, notably the PBOC’s position on interest rates on Monday.

  • On the corporate front, the season is drawing to a close, with a few latecomers such as Zoom Video, BHP, Medtronic, Baidu and Intuit.

But it’s Nvidia that has everyone’s attention, with a post-close earnings report scheduled for August 23. Have a nice weekend!

Things to read this week
Aswath Damodaran on AI and Nvidia Aswath Damodaran on AI and Nvidia
First things first: the semiconductor industry The semiconductor industry, in its current form, expanded rapidly following the PC revolution of the 1980s,… Read more
Walmart Inc. : The retailer isn't in crisis Walmart Inc. : The retailer isn’t in crisis
Sales at Walmart stores open for at least a year rose by 6.4%, excluding fuel, in the three months from May to the end of July, while the market was betting on… Read more
Abandoned EVs Start to Pile Up  in Cities Across China Abandoned EVs Start to Pile Up in Cities Across China
— A subsidy-fueled boom helped build China into an electric-car giant, but with an economic slowdown and hundreds of ride-hailing companies going bust, the… Read more
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