President Xi explains no stimulus
US Labor market softens in a good way
Is it time for the dollar to shine again?
00:00 – Intro
01:04 – President Xi explains no stimulus
08:34 – US Labor market softens in a good way
12:10 – Is it time for the dollar to shine again?
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Markets Weekly September 2, 2023: A Recap of the Global Economic Landscape
As the summer draws to a close and investors return from their vacations, the global financial markets continue to remain highly dynamic. The week of September 2, 2023, witnessed several key developments across major economies, providing insights into the state of the world economy and offering hints of what may lie ahead. Let’s take a closer look at some of the highlights from this week.
United States:
In the United States, market participants eagerly awaited the release of the August Non-Farm Payrolls (NFP) report, which is considered a crucial indicator of the country’s employment situation and overall economic health. Surprisingly, the report exceeded expectations, with the US economy adding 1.1 million jobs, significantly higher than the projected 750,000. This positive data infused confidence among investors, boosting stock markets and signaling a potential recovery from the pandemic-induced economic slump.
Europe:
Across the Atlantic, the European Central Bank (ECB) held its regular policy meeting, resulting in a decision to maintain its accommodative stance. ECB President, Christine Lagarde, emphasized the need to support the eurozone’s recovery despite concerns over persistent inflationary pressures. This dovish approach pleased investors, leading to a rally in European equities. Additionally, the Eurozone’s PMI (Purchasing Managers’ Index) data for August showed signs of improvement, further bolstering market sentiment.
Asia:
In Asia, markets responded positively to news of China’s continued efforts towards economic reform and market liberalization. As the world’s second-largest economy, measures taken by China have a significant impact globally. This week, Chinese policymakers unveiled new initiatives aimed at attracting foreign investment and fostering innovation. Coupled with strong manufacturing data, these developments ignited market optimism and drove Chinese equities higher.
Commodities:
Commodity markets also witnessed some notable movements during the week. Crude oil prices experienced volatility, primarily driven by concerns over OPEC+ production levels and potential disruptions due to Hurricane Ida in the Gulf of Mexico. Gold, often considered a safe-haven asset during times of uncertainty, maintained its resilience, as investors sought to hedge against any market instability. Despite intermittent fluctuations, precious metals remained attractive to many investors looking to safeguard their portfolios.
Cryptocurrencies:
The cryptocurrency market continued to assert its presence, with Bitcoin and other digital assets gaining renewed attention. Regulatory developments surrounding cryptocurrencies in major economies, such as the United States and the European Union, remained in focus. Investors closely monitored the evolving landscape as governments attempt to strike a balance between protecting consumers and fostering innovation.
Outlook:
Looking ahead, market participants are eager to track any signs of inflation and the response of central banks. Additionally, geopolitical tensions, including trade disputes and ongoing pandemic-related concerns, remain on investors’ radar. With uncertainties still prevalent, prudent risk management and attentive monitoring of economic indicators will be crucial for navigating the unpredictable terrain in the weeks to come.
In conclusion, the week of September 2, 2023, presented a mix of positive developments and ongoing challenges across global markets. As economies gradually recover from the pandemic-induced slowdown, signs of revival and investor optimism were evident. However, lingering uncertainties require caution and vigilance, emphasizing the importance of a well-balanced and diversified investment approach to weather potential storms.
Disclaimer: This article does not provide financial advice. Readers should consult with a professional financial advisor before making any investment decisions.
R u founder of bitquant
Thanks. Your dollar view is pretty persuasive.
loving the new trim
Thx for the insight!
The economy is not sustainable for the long run. When the US government pays out more than it receives then we become Greece.
The Fed sets rates for the BoC as nobody will lend to the BoC at lower rates.
The USA can hold rates higher fro longer than the BoC can cope.
Either the BoC stops tracking the Fed and CAD tanks or they keep tracking and housing tanks.
QE is cancer and all the people who did that should be in jail.
> you have to transition into a consumer driven economy
since 1990s for the young: no home, no pension, no retirement and now effectively no healthcare
Joseph the "consumer" economy has been complete cancer
> an essential good is going down in price
high house prices are a huge cancer on society, lower house prices mean higher living standards
Just found your channel- I’m incredibly selective with financial info and have whittled down to just a few really good analysts…. I’ll be following what you do here- new sub!
Nice view Joseph. One comment. As for the US consumer. US businesses produce things in China to sell to the US consumer. If China wants to follow the West, I guess China needs Chinese businesses to produce things in another country to sell to the Chinese consumer…lol
Thank you Joseph, for digesting the noise and summarizing and clarifying for us.
Dang you make so much sense with your analysis, breaking into different countries and their banking system.Thank you.
If the dollar strengthens then what implications does that have for other currencies, especially those that are pegged?
Might we see more foreign reserves (e.g US bonds) get sold to save weakening currencies?
Why haven't PMIs been a great indicator this cycle? Can you qualify that assertion please?
Large fiscally sound corporations can still show up at their European bank and get loans. That's not an issue.
Those obtaining loans from US capital markets will still need to compete with CB rates and TLT yields. The higher they go, which you assert they will, the higher the rate the capital markets have to demand.
The issue here is not how the big fiscally sound megacaps get finance. It's if all the others can.
The US economy is not restricted to the 'magnificent 8'.
Why would the Fed cut rates? With a strong economy and thus high tax yields, where is the necessity to cut rates?
The Fed only changes rates in response to something. The assertion of a strong economy and soft landing with decreasing CB rates are not really compatible.
I would have thought that an increase in labour supply v decrease in demand is a sign of a weakening economy.
I suspect western economies might be taking the austerity route as well. The equity markets seem utterly convinced that QE and 0% is coming back. I think they will be disappointed.
The Greece example is interesting because after their reforms and responsible austerity they're coming back to investment grade.
Thank you
I have been witnessing a huge currency battle US vs rest of the world. Hong kong would be a bellwether that shows signal of escalating main dollar shortage war as being threatened peg system's volatility.
Congrats 10K:)
Great job !
Nice Audio !
Can you share the link to WSJ article about Xi's talk?