US Stock Weekly Update 29 Aug - 2 Sep 2022

U.S. stocks fell overall last week. The S&P fell 3.3% for the week, the Nasdaq fell 4.2% and the Dow fell 3%. The yield on the 10-year U.S. Treasury bond continued to rise by 15 basis points and closed at 3.197%, with a spread of -19 basis points from the yield on the two-year Treasury bond, maintaining a deep inversion, but the inversion range was narrowed. The VIX, the fear gauge, fell 0.35% for the week. Oil futures resumed their decline, with WTI down 6.23% for the week to close at 87.18. Spot gold continued its decline and closed down 1.48% this week at $1,712.38 an ounce. The U.S. dollar index rose 0.7 percent for the week to a record high of 109.61.

The U.S. non-farm payrolls increased by 315,000 after a seasonally adjusted August, the smallest increase since April 2021 and slightly higher than the expected 300,000. The unemployment rate in August was 3.7%, higher than the expected 3.50%, and the previous value of 3.50%. Average hourly wages rose at an annual rate of 5.2% in August, below expectations of 5.30%. After the data was released, U.S. bond yields fell, and the three major stock indexes rose more than 1% during the session.

Institutional analysis said that the market's reaction to the non-farm payrolls report showed that concerns that the Federal Reserve may raise interest rates excessively and drag the economy into recession have eased. Traders are more convinced that inflation has started to pick up and the Fed may not need to be as aggressive as it said at its annual meeting in Jackson Hole. On the other hand, the August non-farm payrolls data showed the resilience of the US economy, and the conditioned decline in the dollar was related to a small decline in the wage data, but there was no substantial change, and the dollar still has room to rise against the trend. Earlier ADP data and a White House spokesman said the labor market was expected to cool, already pulling down market expectations.

Gazprom announced on the evening of September 2 that during routine maintenance work on the gas compressor unit of the Portovaya pumping station jointly with Siemens representatives, it was found that the cables of the low and medium pressure rotor speed sensors were found. Oil leakage with mixed sealing compound at connection terminals. Further operation of the turbine unit was suspended due to the discovery of serious violations. Gazprom's announcement emphasized that the natural gas transportation of the Nord Stream pipeline has been completely stopped until the fault can be completely eliminated. U.S. stocks dived sharply after Russia released the "breathing" announcement.

The White House issued a statement saying that there should be no conditions between the re-implementation of the Iran nuclear deal and Tehran's obligations under the Treaty on the Non-Proliferation of Nuclear Weapons. The Iran nuclear deal is overshadowed again.

Economic Releases For The Week (5/9/2022-9/9/2022):

5/9/2022

JP - Japan's Jibun Bank Services PMI, 8.30AM

JP - Japan's Jibun Bank Composite PMI, 8.30AM

CN - China's Caixin Services PMI, 9.45AM

CN - China's Caixin Composite PMI, 9.45AM

EU - Eurozone's S&P Global Services PMI, 4.00PM

EU - Eurozone's S&P Global Composite PMI, 4.00PM

UK - United Kingdom's S&P Global Services PMI, 4.00PM

UK - United Kingdom's S&P Global Composite PMI, 4.00PM

EU - Eurozone's Retail Sales, 5.00PM

6/9/2022

US - United States' S&P Global Services PMI, 9.45PM

US - United States' S&P Global Composite PMI, 9.45PM

US - United States' ISM Non-Manufacturing PMI, 10.00PM

7/9/2022

EU - Eurozone's 2Q22 GDP Growth Rate (3rd Est), 5.00PM

8/9/2022

JP - Japan's 2Q22 GDP Growth Rate, 7.50AM

EU - Eurozone's European Central Bank's Interest Rate Decision, 8.15PM

9/9/2022

CN - China's Inflation Rate, 9.30AM

CN - China's Producer Price Index, 9.30AM

Sources from: Investing.com; Reuters.com, Bloomberg

Louis Yap

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