Rise and Shine For The Week Ahead (4 Oct)
03 Oct 2021
"Hot" On The Plate
The end of 3Q - Last week marked the end of the 3Q which was an uneventful quarter for the market after a strong start to the year. In the US, major indexes were mostly flat, with only S&P 500 up just 0.2% for the quarter. Nasdaq and Dow jones were down 0.4% and 1.9% respectively. Locally, Singapore's STI was down 1.4% while Hong Kong's HSI index was down 14.8% during the quarter to close negative for the year. This follows the regulatory tech crackdown in China which weighed heavily on the tech stocks such as Tencent, Alibaba and Meituan.
The cryptocurrency market rebounds over the last week with Bitcoin, the largest cryptocurrency by market cap, having its largest daily increase since July. The bullish movement may be attributable to comments from the US Fed Chair Powell which cited that the central bank had "no intention" to ban cryptocurrencies. The cryptocurrencies market had previously been under pressure after China increases its regulatory crackdown on the market. Among the biggest winners in alt coins include Luna and Solana.
Luna which is the utility and governance token for the terra's crypto network which is used to support Terra's stablecoins and payment processing systems, and has hit a new all time high (despite many other cryptocurrencies still struggling to regain their lost grounds). (More on it here) Luna is now the 11th largest cryptocurrency at the time of writing.
Start of 4Q- This is seasonally a stronger quarter for the markets. According to CFRA, the S&P 500 has averaged gains of 3.9% in 4Q and up out 4 out of every 5 years since World War II. (3Q was the worst quarter, so glad that we are over). However, before we get to the stronger months of the quarter, October has tended to be one of the most volatile months for markets
US Jobs Report - The upcoming US jobs report may set the directions for the market which is due to be released on Friday. Economists are expecting 475,000 jobs to be created in September. In August, 235,000 jobs were created which was 500,000 less than expected. The upcoming report will see if the miss in August jobs report was just a temporary blip or a start of a new trend, as investors also try to estimate the timeline of the tapering by the US Fed. The Fed is widely expected to announce a tapering in November. The 10 year US treasury yield has also risen from 1.31% to as high as 1.56%.
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