This week in the US, the market rallied toward or above key resistance, but ultimately retreated on Friday. The Dow Jones Industrial Average dipped 0.2% in last week's stock market trading. The S&P 500 index fell 1.2%. The Nasdaq composite slumped 2.6%. The small-cap Russell 2000 skidded 2.9%. Economic data showed that clouds were gathering over the U.S. economy. The minutes of the Fed meeting suggested the risk of excessive tightening, revealing that the pace of interest rate hikes may need to be slowed down. But officials have given mixed signals about the size of the September rate hike, and hawks have diverged.
There were some news catalysts in the mix this week that contributed to that retreat.
China reported a weaker-than-expected batch of retail sales, industrial production, and fixed asset investment data for July.
The NAHB Housing Market Index for August fell to 49 (a reading below 50 is considered to be negative sentiment), marking the eighth straight monthly decline in the index.
The Empire State Manufacturing Survey for August sunk to -31.3 from 11.1, which was one of the lowest readings on record.
July Housing Starts were weaker than expected.
Total retail sales in July were unchanged from June.
Existing home sales declined 5.9% month-over-month in July, marking the sixth straight month of declines.
St. Louis Fed President Bullard (2022 FOMC voter) said he is still leaning in favor of a 75-basis point rate hike at the September FOMC meeting.
Minneapolis Fed President Neel Kashkari (2023 FOMC voter) said he does not know if the Fed can bring down inflation without triggering a recession.
Target (TGT) and Kohl's (KSS) reported weaker than expected earnings results and Analog Devices (ADI) and Applied Materials (AMAT) had some cautious commentary on recent business activity, offsetting some of the positivity stemming from better-than-expected reports out of Home Depot (HD), Walmart (WMT), and Cisco (CSCO).
UK inflation hit a 40-yr high of 10.1% year-over-year in July.
Germany's Producer Price Index was up 37.2% year-over-year in July, which was the highest reading in more than 70 years.
The major indexes had run up for several weeks, with many former leaders surging 50%, 100% or more off the bottom. So the 200-day line was a logical place for a retreat. The S&P 500 volatility index had rebound from is recent low of 21s level and above 24 which suggest that the market risk appetite reduce significantly.
In terms of A-shares, there was a slight correction last week, and the Shanghai Composite Index fell 0.6%. The transaction volume of the two cities rebounded from the previous week, and the average daily transaction volume rose again to more than one trillion yuan to 1.05 trillion yuan. Northbound funds were all net inflows except for a large net outflow on Thursday, with a weekly cumulative net inflow of 5.93 billion yuan.; in terms of sector, the tight power supply led to the market buying related sectors such as power equipment, public utilities, and coal; agriculture, forestry, animal husbandry, fishery, real estate, and other industries also showed some support; Underperformer are medicine, computer, catering and tourism.
In terms of Hong Kong stocks, under the combined influence of many unfavorable factors such as worries about China's economic growth prospects and the repeated uncertainty of hot weather and the epidemic, the overseas Chinese stock market fell further last week. Overall, the Hang Seng Technology Index fell the most, down 3.6%, while the MSCI China Index, Hang Seng China Enterprises Index and Hang Seng Index fell 1.7%, 2.0% and 2.0% respectively. In terms of sectors, utilities and capital goods led gains, rising 3.2% and 2.5%, respectively, while healthcare and consumer discretionary lagged, falling 4.8% and 3.7%, respectively.
In terms of major global asset prices, WTI September crude oil futures closed up $0.27, or 0.3%, at $90.77 per barrel, down 1.43% this week. Brent October crude oil futures closed up $0.13, or 0.13%, at $96.72 a barrel, down 1.46% this week. COMEX December gold futures closed down $8.3, or 0.47%, at $1,762.90 an ounce, hitting a new closing low since July 28 for two consecutive days, with a cumulative loss of 2.90% this week.European natural gas rose for two days in a row, rising for the fifth straight week this week. ICE British natural gas futures closed up 1.07% at 460.89 pence/kcal, up 16.45% this week; Continental European TTF benchmark Dutch natural gas futures closed up 1.47% at 244.55 euros/MWh, hitting a record closing high for two consecutive days , up 18.65% this week. NYMEX September natural gas futures closed up 1.61% at $9.3360 per million British thermal units, up 6.48% this week.
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