Key Developments
- The S&P 500 declined 2.1% last week, with higher interest rates continuing to weigh on the growth heavy index. Consumer Discretionary lagged, down 4.1%, while Info Tech was the largest outperformer, falling only 0.8%.
- Treasury bonds came under pressure, with the 10-year Treasury yield closing at the highest level since 2007 on Thursday at 4.27%; developments from the July FOMC meeting minutes showed policymakers are willing to hike rates further to address any continued inflation concerns.
- Economic data was mixed, though industrial production and retail sales were above consensus expectations.
- The August S&P Global flash PMIs will be the key data to monitor this week, in addition to NVDA’s earnings release on Wednesday afternoon after the bell.
This Week’s Economic Data
Chart of the Week
China Economic Trouble Continues as the Central Bank Makes a Surprise Rate Cut
- China economic woes swelled this week, causing the People’s Bank of China to enact a surprise rate cut in hopes of alleviating pressure on equity and currency markets.
- Markets did not react positively to the news, with the CNY continuing to weaken versus the USD, testing the 2022 low. China equities also continued to sell-off, while China’s 10-year government bond yield hit the lowest level since the pandemic.
- Accentuating the concerns, a large property developer in China, Evergrande, filed for bankruptcy.
Global Cross-Asset Performance Summary
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Year to Date
S&P 500 Sector Performance
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Year to Date
US Equity Market Style and Size Performance
