“Empowering Financial Success” Vica Partners Group
Unlocking Market Insights: September 15th, 2023
Global Markets
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Japan’s Nikkei 225: +1.10%
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Hong Kong’s Hang Seng: +0.75%
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China’s Shanghai Composite: -0.28%
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France’s CAC 40: +0.96%
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Germany’s DAX: +0.56%
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London’s FTSE 100: +0.50%
US Markets
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DJIA (^DJI): 34,618.24 (-0.08%)
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S&P 500 (^GSPC): 4,450.32 (-1.22%)
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Nasdaq Composite (^NASX): 13,708.34 (-1.56%)
Market Highlights
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Major US indices posted declines.
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ETFs such as SPDR S&P 500 ETF, SPDR S&P Regional Banking ETF, and iShares Semiconductor ETF saw declines.
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ProShares UltraShort 20+ Treasury ETF showed an increase.
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Market volatility, measured by the CBOE Volatility Index, increased significantly.
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The U.S. Dollar Index experienced a slight decline, with the Fear & Greed Index indicating a neutral to fearful sentiment among investors.
Currency and Treasury Yields
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U.S. Dollar Index (^DXY): -0.07%
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Treasury yields mostly up
Commodities
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Gold Futures: +0.73% to $1,923.78
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Bitcoin USD: -0.14% to $26,495.00
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Crude Oil Futures WTI: +0.68% to $90.77
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Bloomberg Commodity Index: -0.22% at 107.47
US Economic Data
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NY Empire State Manufacturing Index (Sept): 1.9 (vs. consensus -10, prior -19)
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Import/Export Prices (Aug): Imports -3%, Exports -5.5% (prior: Imports -4.6%, Exports -8%)
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Industrial Production (Aug): YoY 0.2%, MoM 0.4% (prior: YoY -0.2%, MoM 1%)
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Manufacturing Production (Aug): YoY -0.6%, MoM 0.1% (prior: YoY -0.7%, MoM 0.5%)
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Preliminary Michigan Consumer Sentiment (Sept): 67.7 (consensus 69.1, prior 69.5)
Indices, Sectors, Factors, and Treasuries
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S&P 500 and Dow Jones showed declines.
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All 11 S&P 500 sectors experienced declines. Utilities: -0.49% outperformed/ Information Technology: -1.95% lagged
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Standout performers include Hotel & Resort REITs, Passenger Airlines, Consumer Finance, and Automobile Components.
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Energy sector led monthly performance, followed by Information Technology and Communication Services.
US Treasuries
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Yields showed various movements.
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Yield spreads indicated some inversion.
Exchange-Traded Funds (ETFs)
Declines:
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SPDR S&P 500 ETF (^SPY): -1.20%
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SPDR S&P Regional Banking ETF (^KRE): -1.05%
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iShares Semiconductor ETF (^SOXX): -1.20%
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KraneShares CSI China ETF (^KWEB): -0.57%
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Energy Select SPDR Fund (^XLE): -2.89%
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Credit Hedge ETF (^CDX): -0.68%
Positive Performer:
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ProShares UltraShort 20+ Treasury (^TBT): +1.04%
Market Indicators
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CBOE Volatility Index (^VIX): +7.57% to 13.79
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Fear & Greed Index: 52/40 (Neutral to Fearful Sentiment)
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Market Breadth Indicator: The McClellan Volume Summation Index analyzes the volume of rising shares compared to falling shares on the NYSE. A low or negative value indicates a bearish signal.
Factor Charts
Earnings
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Q1 ’23: 79% of companies beat analyst estimates by an average of 6.5%.
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Q2 Forecast: Predicted decline of <7.2%> in S&P 500 EPS.
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Fiscal year 2023 EPS remained flat YoY.
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Q2 Seasonal Actuals yet to be reported.
Notable Earnings Today
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Beat:
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Miss:
Strategies for Success in September 2023
Key Trends
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August/September historically have lower ROI.
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Energy sector expected to advance, especially services.
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Real Estate REITs offer opportunity.
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Passenger Airlines and Travel remain robust.
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^NYFANG Index and Mega Cap Tech expected to remain strong.
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Current economic signals are mixed, with energy prices causing pricing problems. Oil futures may exceed $100 a barrel into Q4.
Your Guide to Economic Trends in 2023 and Beyond
Economic Forecast
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Federal Reserve no longer predicts a recession, but Vica Partners forecasts a potential recession.
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Factors include Fed tightening, rising oil prices, overvalued stock markets, and a strong dollar.
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Market bottoms tend to occur amid negative news and deflationary signals.
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Rising interest rates and consumer debt are significant concerns.
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Expect Information Technology company valuation adjustments.
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Look to Utilities and Health Care sectors for gains.
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Moderate shift from Growth to Value stocks.
Economic Forecast
Key Points
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The Federal Reserve faces limitations in its ability to control inflation, given the complexities of today’s highly automated global economy.
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A 2% inflation target may no longer be realistic, and there is potential for a base rate exceeding 3% to support initiatives such as wage increases, energy transition, operational efficiency enhancements, and safeguarding against deflation.
News
Company News/ Other
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TikTok Fined by Irish Regulator Over Misuse of Children’s Data – WSJ
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Rising Rates Make Big Companies Even Richer – WSJ
Energy/ Materials
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Hedge Funds Hiked Bullish Oil Bets to 15-Month High on OPEC+ Cuts – Bloomberg
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Indigo Ag Attracts $250 Million to Scale Up Carbon Capture – Bloomberg
Real Estate
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Next China: The Biggest Risk – Bloomberg
Central Banks/Inflation/Labor Market
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US Consumer Prices Jump, Straining Household Budgets Even More – Bloomberg
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US Consumer Credit Rises $10.4 Billion, Largely on Credit Card – Bloomberg
Asia/ China
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China’s economic data breakdowns show signs of life amid prevailing doom-and-gloom outlook – SCMP
