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MARKET MONITOR 
|
September 10

MARKET MONITOR | September 10

Chart of the Week


RISK

US financial balances today suggest only modest risk to the economy and risk assets. Valuations remain elevated in equities, credit, and real estate, however the quantity and quality of household and private sector debt is quite healthy. Especially when compared to the period before the Global Financial Crisis, there are limited signals flashing red today.

Source: GS Global Investment Research and GS Asset Management

Market Summary


GLOBAL EQUITIES

Equity markets dipped last week on fears of slowing global economic growth. The S&P 500 fell -1.68% as multiple Federal Reserve (Fed) presidents suggested that tapering may begin this year despite the August jobs report. In the UK, the FTSE 100 declined -1.51% after a weaker GDP report and a proposal to raise taxes. Meanwhile, reports of constructive talks between leaders in the US and China evoked positive sentiment, with the Hang Seng Composite rising 1.29% on the week. Read More

COMMODITIES

Oil prices continued to rise after the prior week’s rally, with tight supply in the aftermath of Hurricane Ida offsetting China’s newly announced plans to release crude reserves and weaker airline demand due to renewed travel fears. Ultimately, WTI and Brent crude oil prices increased 0.62% and 0.43%, respectively. Gold prices declined -2.26% for the week on the back of a stronger US dollar. Read More

FIXED INCOME

Sovereign yields ticked up last week as markets anticipated adjustments to central bank policies. In the US, strong inflation prints, healthy labor market data, and hawkish comments from some Fed policymakers led the 2-Year and 10-Year Treasury yields back up to 0.22% and 1.34%, respectively. Changes to the European Central Bank’s (ECB) purchase program helped push the 10-Year German Bund yield to -0.33%. In the UK, the 10-Year Gilt yield rose to 0.76%. Read More

FX

The US dollar index rallied 0.48% last week after data points suggested that the Fed may shift to a less accommodative policy stance this year. Potential policy divergence and growth deceleration led the euro down to $1.1815 against the USD and the pound to $1.3845. Read More

Economic Summary


POLICY

The ECB Governing Council signaled a moderate reduction in the pandemic purchase pace at its meeting last Thursday, but reiterated that it is too early to consider the end of PEPP. We expect PEPP purchases of around €70bn in Q4, down from around €80bn in Q2 and Q3. Read More

INFLATION

China's consumer price index rose by 0.8% in August from a year earlier, down from 1% in July. Consensus had predicted an unchanged reading. US producer prices rose by 0.7% in August from the month prior, stronger than consensus expectations but still below the 1% increase in July. Read More

LABOR

US initial jobless claims fell by 35k to 310k for the week ending September 4. The 4-week moving average fell to 340k, below the pre-pandemic average of ~350k. As the extended unemployment benefits ended last week, that number will likely continue to decline further. Job openings rose by 749k to 10,934k in July, with the increase led by health care and hospitality sectors. The report implies that the number of unemployed persons searching for a job fell to 0.7 per job opening in July. As labor demand remains at an elevated level, we expect significant job gains through year-end. Read More

Style Performance


US Equity Size & Style Returns

MONTH-TO-DATE

Large
-1.78%
-1.34%
-0.94%
Medium
-1.89%
-1.38%
-0.50%
Small
-2.49%
-2.01%
-1.55%
Value
Core
Growth

YEAR-TO-DATE

Large
18.18%
19.12%
19.94%
Medium
20.45%
18.47%
14.61%
Small
22.31%
13.50%
5.27%
Value
Core
Growth

MSCI World Size & Style Returns

MONTH-TO-DATE

Large
-1.14%
-0.65%
-0.21%
Medium
-0.89%
-0.09%
0.77%
Small
-1.43%
-0.58%
0.25%
Value
Core
Growth

YEAR-TO-DATE

Large
15.55%
17.44%
18.90%
Medium
18.15%
16.46%
14.04%
Small
17.97%
16.18%
14.04%
Value
Core
Growth

US Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
-0.06%
-0.10%
-0.22%
Corporate
-0.01%
-0.03%
0.10%
High Yield
0.21%
0.28%
0.51%
Short
Intermed.
Long

YEAR-TO-DATE

Government
-0.23%
-0.64%
-4.98%
Corporate
0.39%
0.04%
-0.57%
High Yield
5.31%
4.58%
8.60%
Short
Intermed.
Long

European Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
-0.03%
-0.12%
-0.26%
Corporate
-0.03%
-0.18%
-0.53%
High Yield
0.18%
??????
??????
Short
Intermed.
Long

YEAR-TO-DATE

Government
-0.37%
-0.52%
-4.46%
Corporate
0.29%
0.56%
-1.63%
High Yield
3.99%
??????
??????
Short
Intermed.
Long

Source: Bloomberg and Goldman Sachs Asset Management (as of 09/10/21)

VIEW LESS DISCLOSURE

Key Economic Releases


Monday, Sep 13

Tuesday, Sep 14

US Core CPI (Cons: 4.2%, Prior: 4.3%)
China Industrial Prod. YoY (Cons: 5.8%, Prior: 6.4%)

Wednesday, Sep 15

US Industrial Prod. MoM (Cons: 0.4%, Prior: 0.9%)
UK CPI (Cons: 2.9%, Prior: 2.0%)

Thursday, Sep 16

Initial Jobless Claims (Cons: 320k, Prior: 310k)
US Retail Sales (Cons: -0.1%, Prior: -0.4%)
Philly Fed Survey (Cons: 19.0, Prior: 19.4)

Friday, Sep 17

UMich Cons. Conf. (Cons: 72.0, Prior: 72.3)

VIEW LESS DISCLOSURE

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