“Empowering Financial Success” Vica Partners Financial Group
MARKETS TODAY – September 11th, 2023 (Vica Partners)
Global Markets Snapshot
- Asian markets had a mixed performance today. The Shanghai Composite Index increased by 0.84%, but Hong Kong’s Hang Seng Index and Japan’s Nikkei 225 both experienced declines, with drops of 0.58% and 0.43% respectively.
- In the US, S&P futures opened 0.53% above value for today’s trading.
- Today, European markets ended on a positive note. France’s CAC 40 gained 0.52%, Germany’s DAX increased by 0.39%, and London’s FTSE 100 saw a rise of 0.25%.
US Markets Today
- US stock markets close on a positive note: NASDAQ jumps +1.14%, S&P 500 up 0.67%, DOW rises 0.25%. 9 Out of 11 S&P 500 Sectors register gains. Consumer Discretionary outperforms+2.77%, while Energy lags -1.31% decline. Standout performers include Automobiles (+8.74%) and Broadline Retail (+3.42%)
US Economic Highlights
- In economic news, there were no reports listed on the U.S. Economic Calendar.
Key Takeaways
- The Nasdaq Composite outperformed other major indices, with a 2.07% gain, while NYSE Fang+ (^NYFANG) surged.
- Tesla (TSLA) saw a remarkable 10% increase, and Qualcomm (QCOM) experienced a 400% surge in daily trading volume as Apple extended their chip agreement through 2026.
- The KraneShares CSI China Tech ETF (^KWEB) rose by 1.86%.
- Top Performers in Various Sectors: included Automobiles (+8.74%), Broadline Retail (+3.42%), Health Care Equipment & Supplies (+1.68%), Personal Care Products (+1.61%), and Interactive Media & Services (+1.25%).
- Factor Performance: Growth stocks led the way with gains exceeding 1%.
- Treasury Yields and Bonds: Treasury yields rose across the yield curve, with the 10-3 Month Treasury Yield Spread -1.17.
- ProShares UShort 20+ Treas (^TBT) gained 1.58%.
- Commodities: The Bloomberg Commodity Index increased by 0.57%.”
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, 9 made gains.
- Consumer Discretionary outperformed all, with a solid increase of +2.77%.
- However, Energy experienced a significant decline, dropping by -1.31%.
- Top-Performing Industries for the Day
Some noteworthy industries for the day included:
- Automobiles (+8.74%)
- Broadline Retail (+3.42%)
- Health Care Equipment & Supplies (+1.68%)
- Personal Care Products (+1.61%)
- Interactive Media & Services (+1.25%)
- Performance Over the Past Month (as of September 08, 2023):
- The Energy sector took the lead with an impressive gain of +5.51%.
- Information Technology +0.49% increase.
- Communication Services also posted a moderate gain of +0.02%.
- Year-to-Date (YTD) Leaders in the S&P 500 (as of September 08, 2023):
In terms of year-to-date performance, the top three sectors in the S&P 500 are:
- Communication Services (+43.31%)
- Information Technology (+40.64%)
- Consumer Discretionary (+32.32%).
- Overall, the S&P 500 showed a substantial gain of 16.10%.
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: Oracle (ORCL)
- -Miss: Caseys (CASY), Bowlero (BOWL),
Economic Data
US
- No reports listed on the U.S. Economic Calendar.
“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
- Qualcomm Inks Deal With Apple to Supply iPhone Chips Through 2026 – WSJ
- Berkshire Hathaway Trading at Record Market Value – WSJ
- Covestro Holder Union Investment Hails Move to Engage With Adnoc – Bloomberg
- Chinese ride-hailing giant Didi Global sees second-quarter revenue rise and losses narrow on strong domestic demand, regulatory easing – SCMP
- Japan Has a Long History of Disappointing Investors. Why This Rally Might Be Different – WSJ
Energy/ Materials
- Energy Stocks Are Back in the Market’s Driver’s Seat – WSJ
- Tesla and China Risk Leaving Volkswagen on a Road to Nowhere – Bloomberg
- Saudi Move Boosting Oil Prices Raises Political Risk for Biden – Bloomberg
Real Estate
- Cities Need People, People Need Homes. Both Must Wait – Bloomberg
Central Banks/Inflation/Labor Market
- An Important Shift in Fed Officials’ Rate Stance Is Under Way – WSJ
- EU Cuts Euro-Zone Outlook as German Economic Woes Deepen – Bloomberg
- China’s yuan: financial regulators vow to stem speculation, not hesitate after currency slid to 16-year low against US dollar – SCMP
Asia/ China
- Franklin Templeton CEO calls China an ‘underappreciated’ investment opportunity, says pessimism is overhyped – SCMP
