“Empowering Financial Success” Vica Partners Financial Group
MARKETS TODAY – September 12th, 2023 (Vica Partners)
Global Markets Snapshot
- Asian markets Japan’s Nikkei 225 had a slight decline of 0.06%, while the Shanghai Composite Index and Hong Kong’s Hang Seng Index remained closed for the day.
- In the US, S&P futures opened trading 0.32% below fair value.
- Today, European markets were mixed. London’s FTSE 100 saw a gain of 0.41%, but France’s CAC 40 and Germany’s DAX both ended in the red, with declines of 0.54% and 0.35%, respectively.
US Markets Today
- The US stock markets saw declines at the close of the trading session. The NASDAQ dropped by 1.04%, the S&P 500 was down by 0.57%, and the DOW experienced a more modest decrease of 0.05%. Among the 11 sectors in the S&P 500, eight of them showed declines. Notably, the energy sector outperformed with a gain of +2.31%, while the information technology sector lagged behind with a decrease of -1.75%. Among the exchange-traded funds, the Energy Select SPDR Fund (^XLE) posted a gain of +2.36%, and the SPDR S&P Regional Banking ETF (^KRE) rose by +0.83%. Treasury yields remained mostly unchanged during the trading session.
US Economic Highlights
- In economic news, the NFIB Small Business index remained below its long-term average, moderately missing forecast.
Key Takeaways
- The NFIB Small Business index continued to remain below its long-term average.
- Among the stock indices, the Dow performed relatively better with a moderate loss, while the Russell 2000 (^RUT) showed a modest gain.
- In sector performance, the energy sector stood out with an impressive gain of +2.31%, whereas the information technology sector lagged behind, experiencing a decline of -1.75%.
- Notable performers in various sectors included automobile components (+2.91%), oil, gas, and consumable fuels (+2.34%), as well as banks (+2.01%).
- Among the exchange-traded funds (ETFs), the Energy Select SPDR Fund (^XLE) saw an increase of +2.36%, while the SPDR S&P Regional Banking ETF (^KRE) recorded a more modest gain of +0.83%.
- Value stocks led the way in terms of factor performance.
- Treasury yields and bonds remained largely stable.
- Bitcoin showed an upward trend.
- In the commodities market, both oil and the Bloomberg Commodity Index experienced increases.
Pro Tip: When the put-to-call ratio is on the rise, it typically indicates that investors are becoming increasingly apprehensive. A ratio exceeding 1 is commonly interpreted as a bearish signal.
Indices, Sectors, Factors, and Treasuries
S&P Sectors
- S&P 500 Sector Update (as of September 11, 2023):
- Out of the 11 S&P 500 sectors, 3 made gains.
- Energy outperformed all, with a solid increase of +2.31%.
- Information Technology experienced a significant decline, dropping by -1.75%.
- Top-Performing Industries for the Day
Some noteworthy industries for the day included:
- Automobile Components (+2.91%)
- Oil, Gas & Consumable Fuels (+2.34%)
- Banks (+2.01%)
- Energy Equipment & Services (+1.98%)
- Hotel & Resort REITs (+1.30%)
- Performance Over the Past Month (as of September 11, 2023):
- Information Technology took the lead with an impressive gain of +3.28%.
- Energy sector +2.29% increase.
- Communication Services also posts a gain of +2.26%.
- Year-to-Date (YTD) Leaders in the S&P 500 (as of September 11 2023):
In terms of year-to-date performance, the top three sectors in the S&P 500 are:
- Communication Services (+44.98%).
- Information Technology (+41.28).
- Consumer Discretionary (+35.99%).
- Overall, the S&P 500 showed a substantial gain of 16.88%.
Factors
US Treasuries
Earnings
- In Q1 ’23, 79% of companies beat analyst estimates by an average of 6.5%.
- The Q2 Forecast predicted a decline of <7.2%> in S&P 500 EPS, with Fiscal year 2023 EPS remaining flat YoY. Q2 Seasonal Actuals are yet to be reported.
Notable Earnings Today
- +Beat: –
- -Miss:
Economic Data
US
- NFIB Small Business Index (AUG): 91.3 (Previous 91.9, Forecast 91.5)
“Navigating September 2023: Vica Partners Insights”
- Our aim with this report is to provide you with a comprehensive overview of the prevailing trends that are shaping financial markets.
Key Trends
- Growth stocks tend to perform well during economic optimism.
- ^NYFANG new defensive’s Index as “bigger allows for more capital to scale”
- AI and Semiconductor Equipment will continue to outperform.
- Market had a Factor regression from Growth to Value stocks in the past 45 days.
- Energy is August Sector leader and look for further ’23 opportunity here.
- Health Care +Health Care REITs and Materials undervalued.
- Current economic signals are mixed with deflation concerns.
- August/September historically have lower ROI.
“Vica Partners: Navigating the Economic Landscape – 2023 Economic Forecast
- As of September 2023, the Federal Reserve no longer predicts a recession. However, Vica Partners disagrees and forecasts a potential recession starting as early as Q4 ’23 and extending into ’24. This projection is based on factors including Fed tightening, rising oil prices, overvalued stock markets, and a strong dollar. Vica Partners believes that market bottoms typically occur amid negative news and deflationary signals. Rising interest rates and their impact on the real estate market, coupled with historical highs in consumer debt, are significant concerns. Vica Partners also notes the shift from Growth to Value stocks and the moderation of the Information Technology sector correction occurred.
Key Points
- The Federal Reserve’s power to control inflation is limited, and traditional economic principles may not be effective in today’s highly automated global economy.
- A 2% inflation target may not be realistic today, and a base rate exceeding 3% could fund wage increases, energy transition, operational efficiency improvements, and protection against deflation.
News
Company News/ Other
- Ford Hires New CMO Away From Toyota as It Pivots Toward Electric Vehicle – WSJ
- Tencent Scores Biggest Anime Game With ‘Blue Protocol’ Deal – Bloomberg
Energy/ Materials
- UAE Oil Giant Plans European Trading Boost in Expansion Push – Bloomberg
Real Estate
- Cities Need People, People Need Homes. Both Must Wait – Bloomberg
Central Banks/Inflation/Labor Market
- U.S. Incomes Fall for Third Straight Year – WSJ
- BOJ Watchers Bring Forward Rate Hike Forecasts on Ueda’s Remarks – Bloomberg
Asia/ China
- China urged to be more tech savvy with Belt and Road Initiative as developed nations steer clear and US curbs hit hard – SCMP
