The Long and Short of it, week ending 03 Sep 2021

Publication Type: Market Commentaries

U.S. stock markets were mainly higher last week with the Nasdaq Composite Index closing at record levels and the S&P 500 Index closing just below record highs but with the Dow Jones Industrial Average finishing lower on the week. Growth stocks performed better than value stocks, buoyed by disappointing payroll reports and flagging consumer confidence – both attributed to Delta variant-related concerns and restrictions. Wednesday’s much weaker-than-expected ADP payroll report was substantiated by Friday’s much weaker-than-expected U.S. non-farm payroll report with markets overall reacting to the “bad news” as “good news” believing weak economic data would forestall the Fed from tightening monetary policy anytime soon. The 10-year U.S. Treasury reacted oppositely, increasing 4bps after the release of U.S. non-farm payroll report perhaps reflecting inflation concerns given the likelihood of the Fed to continue with its ultra-accommodative monetary policy and the U.S. dollar weakened, seemingly reflecting those same concerns. For the week, the S&P 500 Index increased 0.6% to 4,535.43, the Nasdaq Composite Index rose 1.6% to 15,363.50, the Dow Jones Industrial Average fell 0.2% to 35,369.35, the 10-year U.S. Treasury rate increased 2bps to 1.33% and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened 0.7% percent.


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The Long and Short of it, week ending 3 Sep 2021