Market: cheap buybacks on Wall Street

(CercleFinance.com) - Wall Street began the week by buying back on the cheap, having just suffered its worst week in almost a year for the S&P and 2 years for the Nasdaq, with weekly losses of almost 6%, including -12% for the 'SOXX' index.


Spreads were not really spectacular on Monday, with +1.2% for the Dow Jones, +1.15% for the S&P500 and the Nasdaq Composite.

The VIX, on the other hand, eased back by -13% to 19.45, erasing Friday's +12%.

Apple shares were under close scrutiny with the presentation of its 'keynote' (and its 1st AI-powered smartphone), but the share price seemed to freeze during the session ($220.9) and then in the 'after hour' (+0.1%): a real non-event, at least in stock market terms.

The Nasdaq-100 outperformed the other indices thanks to Marvell Techno +4.1%, Nvidia +3.5%, Fastenal +3.3%, AMD and Broadcom +2.8%, Microchip +1.8%.

The 'SOXX' index recovered +1.6%, almost on a par with the financials sector (+2.1% on JP-Morgan, +1.8% on Goldman Sachs or Bank of America).

On the macro front, investors are now awaiting the latest US inflation data, which should be reassuring (energy prices continued to fall in August as Chinese purchases slowed), followed by the decision of the ECB, which is expected to cut its key rate by -25Pts on Thursday.

But the prospect of a marked slowdown in the US economy (confirmed by the latest mixed US employment figures) is a cause for concern, beyond the forthcoming rate cuts.

On the figures front, US business inventories rebounded slightly in July (+0.2%) after remaining stable in June, show data published Monday by the Commerce Department: the consensus of economists was targeting 0.3%, after remaining perfectly stable the previous month.

The statistics were mainly driven by a 1% rise in automotive inventories, while computer equipment inventories rose by 1.4%.

Business sales rose by 1.1% in July, meaning that at the current rate it will take 1.35 months to clear inventories, compared with 1.38 months in July 2023.

Another factor likely to influence the trend on Wednesday is the first televised debate between Kamala Harris and Donald Trump in the run-up to the November 5 presidential election in the United States.

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