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MARKET MONITOR 
|
September 11

MARKET MONITOR | September 11

Chart of the Week


CONCENTRATION

The S&P 500’s incredible recovery from its trough in March has been fueled by the outperformance of the top five companies. To date, these companies have yielded +34% in returns. They reflect companies with strong business models, high margins, and solid balance sheets. Even still, a high degree of market concentration may introduce operational risks for mutual fund managers constrained by holding limitations.

Source: GSAM. As of September 10, 2020.

Market Summary


GLOBAL EQUITIES

Another volatile week of equity performance led the S&P 500 to fall -2.49%, while the FTSE 100 and STOXX 600 were able to emerge from the choppy trading sessions gaining 4.02% and 1.67%, respectively. Unlike the week prior, the equity sell-off in the US has been broad-based, with energy and tech stocks leading the decline. Concerns around stretched tech valuations, a narrowing pre-election window to pass fiscal stimulus, and an expanded list of banned Chinese tech exports have weighed on investor sentiment. In Europe, the direction of Brexit negotiation remains a key concern. Read More

COMMODITIES

Crude oil prices fell for the second consecutive week as weak demand and rising COVID-19 cases threatened the recovery and led major oil industry players to cut prices. WTI and Brent prices dropped -6.14% and -6.63%, respectively. Meanwhile, gold prices gained 0.72%. Read More

FIXED INCOME

US Treasury yields fell last week on the back of disappointing macro data and equity market volatility. The initial jobless claims report held at 884k as the FEMA funding for unemployment benefits ran out and Congress failed to progress on another stimulus package. UK Gilt yields also fell as Brexit uncertainties reemerged; the 10-year yield ended the week at 0.67%. Meanwhile in Europe, German and French sovereign yields rose after ECB staff projections upgraded growth forecasts for 2020 while still leaving open the potential for additional easing.  Read More

FX

The US dollar index gained 0.31% last week, primarily due to weakness in the British pound. The pound fell -3.77% against the US dollar after Parliament introduced legislation that would undermine the existing Brexit agreement with the European Commission and increase the potential for a no-deal exit from the European Union. Read More

Economic Summary


MONETARY POLICY

The ECB kept policy rate unchanged, pointing to the strong rebound in activity and diminished deflationary risks to support the decision. But, uncertainty around the evolution of the pandemic remains a risk. Minutes expressed modest concerns over a stronger euro. Read More

SENTIMENT

August’s NFIB Small Business Optimism index improved based on expectations for better earnings, job openings, and business expansion prospects. The index printed at 100.2, up +1.4 points. Yet, the degree of capital investments taking place suggests that small businesses remain defensively positioned. Read More

BREXIT

The UK presented an Internal Market Bill to Parliament this week containing provisions that conflict with the EU-UK Withdrawal Agreement reached earlier this year. Although we expect the probability of a ‘no-deal’ Brexit to rise over the coming weeks, our base case remains that a deal will be reached later this year. Read More

INFLATION

China’s headline inflation for August slowed relative to the month prior, gaining +2.4% year-on-year. The falling print was reflective of lower fuel costs and declining pork prices, both of which helped reduce food and gas price inflation. Read More

Style Performance


US Equity Size & Style Returns

MONTH-TO-DATE

Large
-1.88%
-4.79%
-7.34%
Medium
-1.75%
-3.37%
-6.29%
Small
-3.20%
-4.10%
-4.94%
Value
Core
Growth

YEAR-TO-DATE

Large
-11.05%
5.15%
20.89%
Medium
-12.38%
-3.77%
8.27%
Small
-20.35%
-9.40%
0.90%
Value
Core
Growth

MSCI World Size & Style Returns

MONTH-TO-DATE

Large
-1.43%
-3.73%
-5.62%
Medium
-1.32%
-2.40%
-3.52%
Small
-2.46%
-3.10%
-3.69%
Value
Core
Growth

YEAR-TO-DATE

Large
-12.66%
2.58%
18.91%
Medium
-15.63%
-3.09%
7.07%
Small
-18.03%
-7.26%
3.54%
Value
Core
Growth

US Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
0.01%
0.07%
0.81%
Corporate
0.02%
0.07%
0.57%
High Yield
-0.11%
-0.26%
-1.11%
Short
Intermed.
Long

YEAR-TO-DATE

Government
4.36%
6.02%
21.86%
Corporate
4.37%
5.88%
9.49%
High Yield
-0.95%
0.46%
13.90%
Short
Intermed.
Long

European Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
0.04%
0.37%
1.57%
Corporate
0.09%
0.37%
0.93%
High Yield
0.41%
??????
??????
Short
Intermed.
Long

YEAR-TO-DATE

Government
-0.10%
1.69%
6.89%
Corporate
0.09%
0.81%
3.45%
High Yield
-1.78%
??????
??????
Short
Intermed.
Long

Source: Bloomberg, Barclays and GSAM (as of 09/11/20)

VIEW LESS DISCLOSURE

Key Economic Releases


Monday, Sep 14

China Industrial Prod. YoY (Cons: 5.1%, Cons: 4.8%)

Tuesday, Sep 15

US Industrial Prod. MoM (Cons: 1.0%, Prior: 3.0%)

Wednesday, Sep 16

FOMC Rate Decision

Thursday, Sep 17

US Jobless Claims (Cons: 850k, Prior: 884k)
Euro Core CPI YoY (Cons: 0.4%, Prior: 0.4%)

Friday, Sep 18

UMich Cons. Sentiment (Cons: 75.0, Prior: 74.1)

VIEW LESS DISCLOSURE

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