Please see this week’s market views from eToro’s global analyst team. The full 5-pager includes latest market data, the house investment view, and a weekly ‘special’.
Dollar dominance is here to stay
The US dollar dominates global trade, debt, and central bank reserves. It’s the US’s currency but the world’s problem. De-dollarization is only very slowly happening structurally, with rise of China, with gold and bitcoin among near term winners. But cyclically we see modest weakness with US first to cut rates and risk aversion easing. Good for pressured overseas FX (like JPY, TRY, SEK, ILS), commodities, EM, and US tech. See Page 4
Growth relief drives stocks higher
Signs of easing US growth and inflation pressures, with a ‘goldilocks’ payrolls report, propelled the S&P 500 over 4,500 and narrowed August’s losses to 1.6%. Weak China data saw more drip-feed policy stimulus. CRM’s Q2 beat and raise continued the positive tech and AI momentum. ORSTED.CO wind miss compounded renewables pain. First Medicare 10-drug price list a sector warning. See Q3 Markets Outlook HERE and at twitter @laidler_ben. See Page 2
Facing the September fears
August resilience is telling and sets up well to face September’s weak seasonality, with event risks from El Nino and hurricanes to US budget showdown and China stimulus. See Page 2
Corporate debt sends a reassuring message
Junk (JNK) and investment grade (VCIT) yields over treasuries falling, blunting interest rate rise. Defaults slowly rising, maturities extended, debt loads falling, earnings troughing. See Page 2
A lot is riding on the new iPhone
Big implications for world’s largest stock, where phones half sales, and across 200-co supply chain, shrinking smartphone market, lagging US mobile giants, and coming ARM IPO. See Page 2
What went wrong with renewables stocks?
Solar, wind, hydrogen, lithium slumped, lagging oil, on high interest rates, cost pressure, high expectations. @RenewableEenergy. See Page 2
Mixed crypto regulation messages
Crypto volatile as Grayscale GBTC appeal victory vs SEC then dampened as the agency delayed decisions on all bitcoin spot ETF applications. Crypto ended August as the worst performing asset class. HOOD expanded its crypto offering and COIN took stake in USDC issuer Circle. See latest Weekly Crypto Roundup. See Page 3
Commodities helped by China and energy
Commodities gained with the drip-feed of China economic stimulus and as Brent rose over $85/bbl. on outlook for continued OPEC supply restraint. US natgas rose on hot weather and hurricane disruption fears. Platinum set for biggest market deficit in 50-years. Cocoa rises on Ghana supply shortage outlook. See Page 3
The week ahead: Labor day, China, cars
1) US labor day holiday (Mon). 2) China trade (Wed), services PMI, and stimulus measures. 3) Australia and Canada cenbanks forecast to keep interest rates unchanged at peak. 4) Tech (DOCU, ZS, PATH) and consumer (KR, GME) earnings plus German international motor show. See Page 3
Our key views: A positive markets breather
Market seeing breather after strong 1H, with weaker seasonality, low volatility, and coming growth slowdown. But fundamentally positive on lower inflation and coming rate cuts. Focus on defensive growth and long duration assets from healthcare to big tech. Cautious growth exposed cyclicals, commodities, and banks. See Page 5
