US stocks staged a "roller coaster" ride, easing recession fears and soothing the impact of "Black Monday" | Overseas Major Asset Weekly Report
This week, the volatility of US stocks hit the highest level this year, with recession fears triggering a "Black Monday", followed by a partial recovery in the decline. The yen against the US dollar saw its first weekly decline in six weeks, with yen arbitrage trading closures briefly dominating market sentiment
During the week of August 5th to August 9th, the US stock market experienced a "roller-coaster" market, making it the most volatile week of the year. Recession fears triggered a "Black Monday", with the S&P 500 plummeting nearly 4% on Monday, marking the largest drop since September 22nd, 22 years ago, causing global stock market turmoil. However, as factors such as employment data helped alleviate recession concerns, US stocks recovered most of the weekly losses by Friday.
Specifically, the S&P 500, Dow Jones, and Nasdaq each slightly declined by 0.04%, 0.6%, and 0.18% respectively, with US-listed Chinese stocks leading the way.
In terms of commodities, hot weather sparked market concerns about agricultural production, leading the gains in commodities. New York cocoa futures surged nearly 12.08% at one point this week.
Improving prospects for oil demand due to easing US economic recession concerns and escalating tensions in the Middle East led to a four-day consecutive increase in oil prices, with US oil rising over 4% for the week.
Likewise, as recession fears eased and interest rate cut expectations receded, the 10-year US Treasury yield rose by over 15 basis points this week, recovering all the declines in yield since last Friday.
The US dollar index slightly declined this week, while the Japanese yen posted its first weekly decline in six weeks. Turmoil in yen carry trades once dominated market sentiment, with UBS believing that the unwinding of yen carry trades is only about 50% complete at present. The yen is still one of the most undervalued currencies, with UBS recommending buying the yen and expecting the yen to US dollar exchange rate to rise by over 10% by the end of next year. Goldman Sachs and Natixis, on the other hand, believe that the unwinding of yen carry trades is nearing its "endgame", with most yen short positions already closed.
The chip sector led the US stock market gains this week, with AI, robotics, and other technology sub-sectors following closely behind