QuiCQ 25/09/2024
“Great things are not done by impulse, but by a series of small things brought together.”
— Vincent Van Gogh
Prefer to read today’s QuiCQ in PDF? No prob, download it here, but don’t you dare complain about the formatting!
Today’s subtitle to the QuiCQ ‘Grinding Higher’ refers to our (Western) markets here on both side of the Atlantic, as Asian markets are ‘Shooting Higher’ this week, largely led by Chinese stocks after the PBOC’s monetary policy Bazooka yesterday.
The S&P closed up a quarter of a percentage point, that was enough to mark yet another new all-time high. Participation was less broad than on Monday, with five out of eleven sectors closing higher on the day, and about as many stocks closing higher as those closing lower. Yet, given the weaker economic news flow (see below), the blackout period for share buybacks by corporations and the negative seasonality, the grinding higher is worth a small applause.
The S&P 500’s heat map suggests that the best performing sector, Materials, on the bottom right was probably propelled higher by that Chinese stimulus, whilst it reveals that the worst performing sector, Financials, was lead by sharp drop in Visa (V):
That drop in Visa came on the back of this headline:
This feels as if shares of Visa (and maybe closely related) could be in for a hard patch, especially given the wide popularity of the stock in portfolios…
Bond yields softened by nearly 10 basis points on the Tens, after a substantially softer than expected Conference Board Consumer Confidence number, and rumblings about a 50 bp November rate cut become louder again.
The US Dollar softened again yesterday and this early Wednesday and on the Dixy (DXY - Dollar Index) is now kind of trading below key support. Versus the EUR, the greenback is about to give away the 1.12 level, confirming the new uptrend (for the EUR, downtrend for the USD). Pay close attention to this, as it will have important cross-asset implications …
Prepare for a weaker Dollar with all its implications for other asset classes, which we will discuss in one of the upcoming Quotedians (www.thequotedian.com) and especially also in NPB’s Q4 Asset Allocation outlook, due in less than two weeks time!
