Market Quick Take - September 3, 2020 Market Quick Take - September 3, 2020 Market Quick Take - September 3, 2020

Market Quick Take - September 3, 2020

John Hardy

Head of FX Strategy

Summary:  The broad US stock market outperformed the more concentrated Nasdaq 100 on a strong rally day, a rare development that could suggest a shifting focus in market breadth. Europe is trying to shift to a more positive footing after the euro weakened in recent days and as major indices in Europe like the DAX are back threatening the top of the range. Dollar strength drives a second day of broad commodity weakness with oil and gold both trading lower.

What is our trading focus?

  • S&P 500 Index (US500.I) and NASDAQ 100 Index (USNAS100.I) – US equities saw an unusual session yesterday, in which the broader S&P 500 (and small cap indices) outperformed the more concentrated, mega-cap laden Nasdaq 100 and did so on a positive day for the broader market. The S&P 500 cash session closed almost 1.5% percent higher and posted a new record close near 3,580, while the Nasdaq session barely managed a 1% advance while the Nasdaq futures have underperformed since yesterday morning in New York as the Nasdaq suffered. Is this a sign that mega-cap outperformance is set to fade?

  • STOXX 50 Index (EU50.I) – European equities rallied strong yesterday, powered in part by a weaker euro and anticipation of a strong easing message from the ECB next week. The German DAX managed its strongest close since February, while the STOXX 50 still has another one percent of the local range to work through to achieve something resembling breakout status. The high closing level since July is 3,377, relative to yesterday’s close at 3,338, and the intraday highs since February is not until 3,451.

  • EURUSD EURUSD has pushed down as far as 1.1800 and even below this morning in an ongoing correction. Every consolidation in EURUSD after hitting the 1.1900+ area at the end of July has been gathered up at a “higher low”, a pattern that breaks down if this most major of USD pairs trades below 1.1750. The big levels to the downside are the 1.1700 area range low (and notable Fibonacci retracement) and the absolutely critical 1.1500 area, which was a major cycle resistance on the way up and effectively the secular trend support. The price action could prove jumpy until the other side of the ECB meeting next Thursday, where the pressure is on for the ECB to act after a record low CPI print for August.

  • Spot Gold (XAUUSD) & Spot Silver (XAGUSD) - Gold extended its losses overnight as the dollar saw additional strength after improved economic data and vaccine news (see below) gave a further boost to recovery hopes. Tuesday’s failure to reach $2000/oz despite multiple tailwinds had left it vulnerable to profit taking and the stronger dollar was the trigger. A prolonged period of consolidation may leave the yellow metal exposed to a deeper correction with focus on trendline support at $1922/oz followed by $1900/oz. Focus squarely on the dollar and economic data ahead of Friday’s job report.

  • WTI Crude Oil (OILUSOCT20) & Brent Crude Oil (OILUKNOV20) - finally saw some action yesterday with the sudden dollar strength driving prices of oil and several other commodities lower. The US inventory report, which showed big drops in oil and fuel stocks, was ignored given the disruptive impact of last week's hurricanes. Instead the market was spooked by the dollar and Iraq’s request for a two-month extension to implement compensatory cuts under the OPEC+ agreement. No major technical levels got broken but a break below the 50-day moving average on WTI at $41.25/b and Brent at $44/b may signal a deeper and, in our opinion, much needed correction following months of inactivity.

  • USDRUB – the ruble sold off more than 2% versus the USD late yesterday on the news that German medical investigations concluded that Russian opposition leader Alexei Navalny was poisoned with the nerve agent novichok. German Chancellor Angela Merkel said she will meet with EU officials and NATO in determining an appropriate response, with the ruble likely to take a further hit if new sanctions are imposed, though it does not appear Germany is willing to consider any measures that would affect its access to Russian natural gas exports via the Nordstream 2 pipeline. Russia maintains that Russian doctors found no evidence of poisoning and don’t see set to admit any involvement in the case.

  • Apple, Inc. (AAPL:xnas) - suffered an extremely volatile session yesterday as new record highs near the opening of trade in New York were sold heavily (turning a nearly 3% gain intraday into a more than 3% loss – closing the day some 2% lower from the prior day’s close). The volatility was perhaps sparked in part by a German regulator announced that it is following Epic Game antitrust filing against Apple with “great interest”.

  • Tesla (TSLA:xnas) - volatile session yesterday with Tesla shares down as much as 15% at the intraday lows following news that major long-term shareholder Baillie Gifford trimmed its stake in Tesla to 4.25% down from 7.67%. The asset management said the move was primarily driven by guidelines on single stock exposure in client portfolios. However, the violent downward move highlights the inherent fragility that has been built up in Tesla due to high option volume and thus related large market maker positions due hedging of enormous call options from retail investors.

  • MongoDB (MDB:xnas) - shares were down 4% in the primary session but jumped 5% in extended session on solid results. FY21 Q2 revenue was $138mn vs est. $127mn and adj EPS was $-0.22 vs est. $-0.39. The company also lifted revenue guidance for the fiscal year. Another US technology company that beat on earnings. We expect strong price action in MongoDB shares today.

  • Broadcom (AVGO:xnas) and DocuSign (DOCU:xnas) - both companies report earnings today after the US market close. There is a lot of anticipation around the DocuSign earnings with shares up 24% in just three sessions ahead of today’s earnings. The average absolute move in DocuSign shares over historic earnings releases has been 8.4% so given the latest run-up we expect a lot of volatility both before and after the earnings.

What is going on?

  • France set to move ahead with EUR 100 billion stimulus plan - called “France Relaunch”, the plan includes a mix of wage subsidies, business tax cuts and outlays for new green initiatives. Over the last 24 hours, France reported more than 7,000 new cases of COVID-19, the second highest daily tally since the initial spring-time breakout. Death totals in France have risen, but are at between 25-30 daily over the last three days.

  • US August ADP Payrolls change disappointed with a reading of +467k vs.1M expected and 212k in July, a sign that the growth bounce-back in the labor market is proving slower than hoped, even as retail sale, for example, reached a record high in July. The US continues to struggle with various levels of lockdown levels, with not all schools across the country set for reopening in coming days.

What we are watching next?

  • US Weekly Initial Jobless Claims and US Aug. ISM Services today - the US economy is expanding again after its COVID-19 induced shock and we’ll watch the weekly jobless claims data  from the US with interest as one of the better high-frequency indicators on the shape of the US recovery and the ISM Services for a measure of whether the recovery is accelerating or stalling or worse.

  • Earliest vaccine candidates will soon show whether effective – as early as mid-September some of the initial results from the earliest vaccine candidates could become available and show whether the vaccines are able to stop the virus from spreading. The earliest to announce results could be AstraZeneca, followed by a US-German partnership of Pfizer and BioNTech and then US-based Moderna Inc.

Economic Calendar Highlights for today (times GMT)

  • 0715-0800 – Euro Zone Final Aug. Services PMI
  • 0900 – Euro Zone Jul. Retail Sales
  • 1230 – US Weekly Initial Jobless Claims
  • 1230 – US Jul. Trade Balance
  • 1400 – US Aug. ISM Services
  • 1400 – UK BoE’s Bailey to Speak
  • 1430 – EIA's Weekly Natural Gas Storage Change
  • 1630 – US Fed’s Evans (non-voter) to Speak
  • 0130 – Australia Jul. Retail Sales

Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:

Apple Sportify Soundcloud Stitcher


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank (Schweiz) AG
The Circle 38

Contact Saxo

Select region


All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.