Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
AKCJA
It turned out to be a mixed bag for US stocks last week, as big tech companies stole all the hype, leaving the broader stock market fighting for what little attention remained. The Nasdaq 100 pushed to new record highs on Tuesday, before finishing the week 3.3% higher. In contrast, the Dow Jones index barely moved, edging to a mere 0.3% gain by the Friday close. The discrepancy is beginning to worry a number of investors, who are now coming to terms with just how few companies are actually responsible for the momentum in US stock markets. Artificial intelligence continues to be the dominant trend, as proven by the recent announcement from Meta Platforms (META) related to its new Muse AI agent. Shares in the company rose 13% last week, while a number of stocks tied to the semiconductor sector saw similar rallies. Advanced Micro Devices (AMD), Arm Holdings (ARM) and Intel (INTC) likewise all closed the week around 13% higher, as markets collectively concluded that demand for chips is not going away any time soon. Much of the rest of the stock market remains forgotten in the dust.
The US dollar stayed on the front foot last week, pushing the DXY 0.8% higher to reclaim 101 points. The Fed’s newfound hawkishness has taken markets by surprise and currencies have yet to completely adjust to the new paradigm. Resilient US economic data has left the central bank with no excuse to lower interest rates, and in fact the implied odds of a second consecutive rate hike on the dollar now stand at over 60%. This stands in direct opposition to the Bank of Japan’s much weaker stance regarding the yen, which fell against the greenback yet again last week. Despite joint interventions and promises to combat a weakening yen, the results so far have been unconvincing, as evidenced by the pair’s climb to 159 last Thursday. With that said, following a bout of political commentary between Washington and Tokyo late last week, another joint intervention may well be on the cards. Japanese Finance Minister Satsuki Katayama claimed that President Trump had directly expressed concern on the weakness of the yen, while a subsequent call between Katayama and Treasury Secretary Scott Bessent resulted in a bilateral pledge to strengthen cooperation on the matter. Given the size of previous interventions, currency traders were happy to pre-emptively buy the yen on Friday, lifting the yen a full percentage point against the greenback.
The economic calendar finally has something to say for itself this week, with a slew of hard data lined up for release. The first is an interest rate decision from the Reserve Bank of Australia, which is forecast to raise rates on the Australian dollar to a 15-year high of 4.6%. Australia continues to suffer severe inflationary problems and if implemented, the adjustment would mark the fourth rate hike of the year. Later in the day, the August JOLT survey will offer the first glimpse into the US labour market this week, although not the last. The September ADP employment change follows on Wednesday, as does the all-important PCE price index and the final estimate of US second-quarter GDP growth. The ISM manufacturing index is the main event on Thursday, before non-farm payrolls hit the newswires on Friday. On the earnings calendar, Micron (MU) is the one to look out for, scheduled to deliver their latest financials after the bell on Wednesday.
On the geopolitical front, very little has emerged out of the Trump-Xi summit, with the exception of a modest two-month extension to the trade truce, buying both parties more time to negotiate a more permanent arrangement. Almost nothing to report from Iran either, following the US’ rejection of a cease-fire proposal that would have reopened the Strait of Hormuz, although the White House expects talks to resume this week. Brent Crude is back under $100 per barrel as of this morning.
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OTWÓRZ KONTO