📆 Monday, September 9
► European equities staged a strong recovery today, with the Stoxx 600 gaining 0.8%, surprising investors who sold in panic (unlike our chief analyst who expected a recovery on Monday and positioned us accordingly) and partially recovering from last week's 3.5% loss. Inflation in Europe continues to fall, providing a buffer for equity markets. Technology stocks led the way as investors looked ahead to Thursday's European Central Bank meeting, where a 25 basis point rate cut is expected. The German DAX rose 0.8%, while the French CAC gained 0.8%. The UK's FTSE 100 gained 0.7%, supported by positive sentiment after last week's sell-off. Yields rose on the European bond markets, with the yield on ten-year German Bunds climbing by 6 basis points to 2.24 %.
► After last week's sell-off, US equities are set for a recovery on Monday. Many investors sold in panic on Friday, even in after-hours trading, and have now missed the recovery (or attempt at a recovery). Futures for the S&P 500 and Nasdaq rose by over 0.7% and 1% respectively, following a sharp sell-off resulting in the worst week for the S&P since S&P 500. Bond yields are front and center as investors debate how quickly the Fed will reduce rates, with bets largely leaning towards a quarter-percentage-point cut at the September 18 meeting. Treasury yields climbed, with the 10-year yield rising 5 basis points to 3.76%, reflecting market uncertainty over the Fed’s pace of easing.
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