Global Market Quick Take: Asia – September 4, 2024 Global Market Quick Take: Asia – September 4, 2024 Global Market Quick Take: Asia – September 4, 2024

Global Market Quick Take: Asia – September 4, 2024

Macro 6 minutes to read
APAC Research

Key points:

  • Equities: Nvidia leads tech sell off, down 9.5%
  • FX: The Australian dollar slipped 2% against the Japanese yen on risk-off
  • Commodities: Oil fell more than 4% due to muted demand
  • Fixed income: 10-year yield had biggest drop since August 2, ending a five-day rise
  • Economic data: Bank of Canada, Australia GDP, US JOLTS job openings

------------------------------------------------------------------

The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events.

0904 

Disclaimer: Past performance does not indicate future performance.

 

In the news:

  • Nvidia loses $279B after selloff; DoJ steps up antitrust probe into chipmaker (Investing)
  • Oil prices slump on news Libyan supply may possibly return to the market (Investing)
  • Zscaler stock sinks 13% in afterhours trade on cautious profit outlook (Yahoo)
  • The Market’s Fear Gauge Spikes. Dow Sinks 700 Points. (Barron’s)

Macro:

  • US ISM Manufacturing PMI for August rose to 47.2 from 46.8 but was shy of the expected 47.5. With the current focus of the Fed and market participants on the labour market, the employment sub-index (ahead of payrolls on Friday) rebounded to 46.0 from 43.4. Prices paid rose to 54.0 (exp. 52.5, prev. 52.9), while new orders dipped to 44.6 from 47.4.
  • Bank of Canada preview: The Bank of Canada (BoC) is expected to cut rates by 25 basis points at its meeting on Wednesday. While Q2 GDP growth exceeded expectations at 2.1% annualized (compared to the 1.8% forecast and the central bank's 1.5% projection), the details were less encouraging. Meanwhile, labour market cracks are widening and continues to pose hard-landing risks to the Canadian economy. This could BOC to cut rates again, especially with the comfort also around the Fed starting its easing cycle this month. The market sees a 20% chance of a surprise 50bps cut.

Macro events: Bank of Canada Policy Announcement, Australia GDP (Q2), China Caixin Services PMI (Aug), EZ & UK Composite/Services Final PMIs (Aug), US Durables Revised & Factory Orders (Jul), JOLTS (Jul)

Earnings: Dick’s Sporting Goods, Dollar Tree, C3 AI, Casey’s

Equities: US stocks experienced a sharp decline on Tuesday, marking their worst day since August 5, due to economic concerns and a major selloff in tech stocks. The S&P 500 dropped 2.1%, the tech-heavy Nasdaq 100 fell 3.1%, and the Dow Jones lost 625 points. Technology stocks, especially in the semiconductor industry led the downturn. Nvidia, a key player in the AI market plunged 9.5%, impacting other chipmakers like Broadcom (-6.2%), Qualcomm (-6.9%), and Micron (-8%). Communication services also struggled, with Alphabet and Netflix each losing 3.7%. Weak ISM Manufacturing PMI activity in August further fueled economic concerns as investors remain cautious ahead of a series of labor market reports due later in the week, which could affect the Federal Reserve's monetary policy decisions.

Fixed income: Treasury futures surged sharply during the early U.S. session as WTI futures continued to decline and stocks fell after the cash open. These gains reversed the month-end losses seen late in Friday's session and were largely sustained through a quiet U.S. afternoon. Following the Labor Day holiday in the U.S., a record 29 corporate bond issuers entered the market. Treasury yields had risen by 4 to 7 basis points across the curve, with the long end leading the gains. This resulted in a flattening of the 2s10s and 5s30s spreads by 3 basis points and 2 basis points, respectively. U.S. 10-year yields ended around 3.84%, slightly outperforming both bunds and gilts in the sector.

Commodities: Gold dipped 0.26% to $2,492 after soft Manufacturing PMI data but recovered slightly. Silver fell 1.7% to $28.05, its lowest close in over a week, as the US Dollar index rose. Investors are anticipating payroll data and the upcoming Fed meeting. WTI crude futures dropped 4.36% to $70.34, and Brent fell 4.86% to $73.75, the lowest since the start of January, as muted demand magnified the impact of relatively ample supply. New data from China exacerbated concerns that economic growth from one of the world’s largest oil consumers is unlikely to bounce back this year, with key gauges of domestic factory demand dropping more than expected in August.

FX: The US dollar continued to strengthen from its late-August lows, but gains still remained modest. We discussed the US dollar dynamics in this article yesterday, and noted some catalysts that could prompt a sharper reversal in the greenback. Labor market focus continues this week and JOLTS job openings numbers will be key today. Bank of Canada also announces its policy decision and there is a slim chance of a 50bps rate cut as well, which together with weakness in oil prices could make the Canadian dollar vulnerable. The underperformer in the major currency space yesterday was the Australian dollar, however, and GDP data is out today which will need to be resilient to support the RBA’s hawkish stance. The Australian dollar slipped 2% against the Japanese yen, indicating risk-off market behavior. The Swiss franc also gained, despite softer Swiss CPI hinting at another SNB rate cut in September.

 

For all macro, earnings, and dividend events check Saxo’s calendar.

For a global look at markets – go to Inspiration.

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article
Disclaimer

The Saxo 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 is not intended to and does not change or expand on this. 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 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 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 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 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 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 (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.