It seems that the passing week was not the best one for the stock exchange bulls and those keeping long positions on the oil market. On the other hand, the market bears may have reasons to be happy.
The Dow Jones and S&P 500 were little changed on Friday, while the Nasdaq appears to be rising slightly. On a weekly basis, however, both the S&P 500 and Dow Jones appear on track to record their worst performance since June, and the Nasdaq will likely have its worst week since May. Investors continue to scrutinize the latest FOMC minutes, which showed that policymakers are likely to begin tapering monetary stimulus this year. Concerns about the rapid global spread of a delta mutation of the coronavirus may have also impacted investor sentiment. On a weekly basis, the Nasdaq currently appears to be losing more than 1 percent, the S&P 500 is down 1.22 percent, and the Dow Jones Industrial Average is down more than 1.6 percent. In Europe, on the other hand, Italy's FTSE MIB appears to be the biggest loser of the popular indices, falling nearly 3 percent, and Germany's DAX could post a weekly loss of 1.4 percent.
For the stock market, the US dollar, bonds or commodities, next week could be crucial, as the central bankers' symposium in Jackson Hole (August 26-28) organized by the Kansas City Fed branch. It is there that an announcement may be made that the Federal Reserve intends to reduce its asset purchase program. According to a Reuters poll, nearly two-thirds of respondents, 28 of 43, said the Fed is likely to announce at its September meeting a reduction in asset purchases - currently set at $80 billion in Treasury bonds and $40 billion in MBS per month.
Meanwhile, in addition to the stock market, oil quotes are also worth keeping an eye on. WTI crude oil futures fell to 3-month lows of $63.2 per barrel on Friday, extending losses for a seventh straight session, the longest losing streak since February 2020. U.S. Texas Intermediate crude is on track to fall about 7 percent this week as the ongoing spread of the delta strain of the COVID-19 virus and weak economic data raised concerns that the global recovery could be weakened as several countries reimposed travel restrictions and air traffic.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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