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Archinomics Weekly - Monday 4th October 2021

12 days ago

the
MARKETS

Equities

Nearly all stock markets finished the week lower. In the US, the Nasdaq recorded its biggest weekly loss since February, and growth stocks fared worse than value stocks. Investors were concerned over the prospect of tightening monetary stimulus, and a narrowly avoided US government shutdown also caused volatility. In Europe, markets were pushed lower by concerns about stalling economic growth and high inflation.

Bonds

US Treasury yields rose over the week, as investors continued to digest the possibility of interest rate rises and a reduction to the Federal Reserve’s bond purchases in the near future. In corporate bond markets, investment grade and high yield bond yields were higher in both the US and Europe.

Currencies

The US dollar had a strong week, rising against the euro, sterling and the yen. The euro was weaker across the board, while sterling fell against the dollar and the yen, but gained some ground versus the euro.

Commodities

Brent Crude oil briefly surpassed the $80 per barrel mark, for the first time in three years, as it appeared that a global energy crisis could be looming. The oil price cooled off towards the end of the week, but still delivered a 1.5% gain.

Responsible investing

US Congresswoman Katie Porter, a Democrat based in California, publicly criticised big banks that continue to finance fossil fuel projects despite committing to reaching net zero emissions. Porter specifically called out Citigroup and Bank of America, ahead of the COP26 summit to be held in the UK in November.

MACROECONOMIC
UPDATE

The US government narrowly avoided a shutdown, as Congress passed a short-term spending bill that would keep it open until December. However, no progress was made on raising the debt limit.


Inflation continued to rise in the Europe in September, but the European Central Bank reiterated its view that inflation is transient and accommodative monetary policy must continue.


In China, the manufacturing PMI figure fell into contractionary territory (below 50), signifying that manufacturing activity is officially declining. Meanwhile, the Evergrande debt crisis continues.

on the
RADAR

September PMIs will give fresh insights into economic growth across the globe.


The US non-farm payrolls on Friday will provide an up-to-date picture of the US employment landscape.

Listen to our weekly podcast for more information and our experts’ insights.

Architas

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Stock market sentiment ended the week on a high note, as US Senators averted a potential debt crisis. Markets finished the week higher in the US, Europe and the UK. 

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