Five Things to Start Your Week

Good afternoon. Our Alpha Portfolio is at +11.09% YTD.

• Leading: Turning Point Brands at +39.4%

• Lagging: Crocs at -8.5%.

Market Snapshot

The US market displayed a mixed performance, with financials such as MUFG (+1.54%) showing gains, while tech giants faced downturns. Major companies like Apple and Microsoft showed some resilience, but the broader tech sector was impacted negatively.

European stocks were volatile, with notable declines in countries like the Netherlands, where ASML fell sharply by -17.50%. Germany also experienced a downturn, with SAP decreasing by -3.85%. France saw modest declines, with TTE down by -1.56%.

Asian markets experienced significant fluctuations. In Taiwan, TSM saw a substantial drop of -11.52%. Chinese tech giants like BABA (-5.50%) and PDD (-6.59%) also faced significant declines. Japan had mixed results, with SONY down by -3.37%, but financial institutions like MUFG saw gains.

Commodities

• Crude Oil: Prices remained stable due to ongoing demand and supply adjustments by OPEC+.

• Natural Gas: US natural gas prices continued to fall due to higher production and excess storage.

Foreign Exchange

• US Dollar: Strengthened, driven by higher yields and economic data.

• Japanese Yen: Weakened against the dollar.

• Euro: Slightly weakened following mixed economic signals from the region.

Muted Reaction

Markets are delivering a fairly muted reaction after Joe Biden ended his reelection campaign and endorsed Vice President Kamala Harris. The dollar is sliding slightly, havens like Treasuries and the Swiss franc edged higher, while European stocks rebounded from their worst week this year.

China Shock

While markets wait for political answers, central banks may be the more pressing issue. The US Federal Reserve and Bank of England are both due to deliver decisions next week, but all the action was in China on Monday, where the central bank increased support for the economy with surprise interest-rate cuts. The moves come after a lack of short-term stimulus from a major Communist Party meeting disappointed investors, but the modest reductions failed to excite markets, and Chinese stocks fell.

Newsworthy

This is what’s caught our eye over the weekend.

• A brief history of Kamala Harris and her politics.

• Ukraine and key bondholders reach a $20 billion debt restructure deal.

• Tech rout deepens in Asia as Morgan Stanley says take profits.

• Ladbrokes owner Entain names industry veteran Isaacs as CEO.

• ECB cut bets not fully misplaced, but not baseline, official says.