"On Pins and Needles!"

Hi There! September is my favourite month of the year. It's a time of transition, change, and new beginnings—a moment to reflect on how far I've come and to prepare for what lies ahead. For me, September is about closure, tying up loose ends, and taking stock of personal growth. It's also a time to contribute to the greater good, reminding me that each new beginning is an opportunity to grow and evolve.

This month serves as a canvas for reflection, expansion, and rebirth. It's a time to let go of what no longer serves me and to embrace the changes that will lead me toward a brighter future. As I take these small but meaningful steps forward, I’m reminded of how they can lead to significant changes in my life.

What does September mean to you?

Alright, let’s dig in!

Last Week (August 25 - 31, 2024) Recap

U.S. markets held steady heading into the Labour Day weekend, wrapping up the unofficial end of summer with mixed weekly results. Despite some volatility, all three major indexes secured monthly gains, driven by key tech earnings and inflation data. Treasury yields climbed as the Fed's rate outlook became clearer, while the U.S. dollar surged on strong economic indicators.

U.S. Markets

U.S. stocks started slow last week as investors mulled over Fed Chair Jerome Powell’s most recent remarks. Although trading volume was low early in the week, markets picked up as major tech companies reported earnings. The S&P 500 managed a modest gain of 0.24%, the Nasdaq dropped 0.92%, while the Dow gained 0.94%. NVIDIA’s earnings, a barometer for the AI industry, exceeded estimates but offered a cautious outlook, causing some market jitters. Meanwhile, the Fed’s preferred inflation metric, core PCE, rose slightly less than expected, supporting the case for a rate cut this month.

• Fixed Income: The Bloomberg Aggregate Bond Index dipped as Treasury yields rose. The 10-year yield increased by ten basis points, while the two-year yield climbed five basis points. This upward movement was driven by stronger-than-expected GDP data and inflation figures that solidified expectations for a smaller rate cut in September. The yield curve, which remains slightly inverted, shows signs of normalizing as the Fed prepares to potentially ease rates.

• Commodities: The Bloomberg Commodities Index fell 0.25% last week.

  WTI crude oil dropped 1.43%, with prices pressured by reports that OPEC+ might unwind output cuts in the third quarter. Despite reductions in Libya’s oil exports, weak demand and the end of the U.S. driving season weighed on crude. Gold slipped 0.4%, while silver declined 3.2%, and copper also ended the week lower.

Currencies:

• U.S. Dollar: The U.S. dollar index climbed, driven by strong economic data that reduced the likelihood of a large rate cut in September. The dollar found additional support from month-end trading and rebalancing.

• Euro and Japanese Yen: The euro saw its largest weekly drop since April, while the Japanese yen weakened on disappointing local economic data.

U.S. Economic Recap (August 25 - 31, 2024)

• Real Disposable Incomes Up: Real disposable incomes increased for the third consecutive month, lowering near-term recession risks and supporting consumer spending. Headline and core inflation both rose 0.16% month-over-month, slightly softer than expected. While goods prices fell, services prices continued to rise, signaling ongoing inflation pressures.

• Upward Revisions to GDP and Spending: Q2 consumer spending was revised up to 2.9% annualized from 2.3%, and GDP was revised up to 3% from 2.8%. These revisions, along with a softer inflation outlook, strengthened the case for a soft landing. The job market will be key to maintaining this trajectory, with early indicators showing cooling in services employment.

Global Markets Recap

• Europe: European stocks rallied, with the STOXX 600 gaining 1.34%, as markets reacted to positive inflation data and rising hopes for a rate cut from the European Central Bank (ECB). Eurozone inflation hit its lowest level since 2021, bolstering market sentiment. In the U.K., expectations of Bank of England (BoE) rate cuts and tighter fiscal policies also lifted markets.

• Asia: Japanese markets rebounded, ending at weekly and monthly highs despite slowing economic data and rising unemployment. In China, markets dipped slightly as corporate news weighed on sentiment. PDD Holdings (owner of Temu) issued a cautious consumer outlook, while JD.com attempted to offset negative sentiment with share buybacks. The People’s Bank of China (PBoC) held lending rates steady, contributing to the market’s subdued performance. Meanwhile, India extended a historic winning streak, while Hong Kong saw gains, and South Korea and Taiwan had mixed results.

Crypto Recap (August 25 - 31, 2024)

• Sony’s Blockchain Initiative: Sony Block Solutions Labs announced a public testnet for its Ethereum Layer-2 network, Soneium, which aims to integrate blockchain technology with gaming and entertainment. The platform will explore using NFTs for in-game assets and developing new financial models within the entertainment industry.

• Kraken’s Legal Battle: A federal judge denied Kraken’s motion to dismiss the SEC lawsuit, which argues that certain Kraken transactions fall under SEC regulation. The case continues as political pressure mounts on the SEC during the election season.

• Bitcoin Stabilizes: After a sharp drop, Bitcoin stabilized mid-week, though it remains down 5.8% over the last 24 hours. The broader crypto market also faced significant declines, with Ethereum down 8.2%, Solana dropping 7.5%, and Dogecoin falling 6%. The market correction follows last week’s comments from Fed Chair Powell, which may have led to overconfidence among traders.

Here are other key highlights from last week:

• Semler Scientific (Nasdaq) boosted Bitcoin holdings above 1000 BTC.

• CME Group to launch smaller Bitcoin Futures for retail market.

• Mastercard and Swoo unveiled revolutionary crypto cashback program.

• Boson Protocol and Superchief Gallery tokenized $5.1M art collection.

• Binance.US plans for MATIC to POL Migration of Polygon.

Get ready for another busy week in the markets!

This week’s key U.S. Events:

• Monday, September 2:

  • Labour Day Holiday (U.S. Markets Closed)

• Tuesday, September 3:

  • ISM Manufacturing PMI

• Wednesday, September 4:

  • JOLTS Job Openings

• Thursday, September 5:

  • ADP Nonfarm Payrolls

  • Jobless Claims

  • ISM Services PMI

• Friday, September 6:

  • Nonfarm Payrolls

  • Unemployment Rate

  • Average Hourly Earnings

Fed Speakers This Week:

• Friday, September 6:

  • FOMC Member Williams will speak at the Council on Foreign Relations in New York

  • FOMC Member Waller will discuss the economic outlook at the University of Notre Dame.

Earnings Releases:

Key earnings reports expected to influence market sentiment this week are shown below.

Global Economic Events This Week:

• Tuesday, September 3:

  • Switzerland CPI and GDP

  • Australia GDP

• Wednesday, September 4:

  • Bank of Canada (BoC) Interest Rate Decision

  • Reserve Bank of Australia (RBA) Governor Bullock Speech

• Thursday, September 5:

  • U.K. Construction PMI

• Friday, September 6:

  • Canada Employment Change

  • Canada Unemployment Rate

  • Canada Ivey PMI

Trading Tip: Portfolio managers back after Labour Day tend to clean house!

Week 8/25/24 - 8/31/24 Recap

Special Tools and Strategies

Rektember is Here! Are You Ready?

Historically, September has earned the nickname "Rektember" in the crypto world due to frequent market downturns, particularly for Bitcoin. With August closing on a bearish note, the pressure is on to hold key support levels this month.

Crypto traders should brace for potential turbulence as macroeconomic factors, like the upcoming U.S. jobs report, could influence the Federal Reserve's interest rate decisions. With the crypto market still up 175% from its 2023 lows and political uncertainties on the rise, September could be unpredictable.

For beginners, Rektember serves as a reminder of the wild volatility in the crypto market. It’s a time to stay cautious, do thorough research, and only invest what you can afford to lose. Emotional resilience is key as market swings can be dramatic.

In summary, while Rektember’s historical trends suggest caution, the market’s response to upcoming data and geopolitical developments will determine whether this September follows the usual pattern or surprises us. Investors and traders should stay informed and ready to adapt their strategies as new data emerges.

Will it be a bullish September or another Rektember?

Disclaimer: This newsletter is strictly educational. The information this report provides does not constitute investment, financial, trading, or any other advice. You should not treat any of the report’s content as such. Please be careful and do your research.