The S&P 500 slipped for a fourth consecutive week as the ongoing upwards march in treasury yields continued to weigh on investor sentiment. Energy stocks were amongst the few winners last week with utilities continuing to struggle as they tend to do during periods of rising treasury yields. Fear of another US government shutdown was an additional headwind for the market throughout the week although Congress did ultimately agree to a bill over the weekend. Overall, the S&P 500 and NASDAQ posted weekly returns of -0.7% and +0.1% respectively, confirming their worst monthly performance of 2023.
It was another negative week in general for global equity markets which took their lead from the US. The MSCI Europe ex UK index shed -0.7% whilst the FTSE100 declined by -1.0% with both moves reflective of higher local government yields. Germany’s 10-year Bund yield pushed through 3.0% for the first time in more than a decade before retreating on Friday whilst the equivalent duration security in the UK briefly edged beyond the 4.50% mark. Elsewhere, the Nikkei 225 in Japan fell by -1.7% despite the announcement of a new economic plan by Prime Minister Fumio Kishida whilst in China, the Shanghai Composite closed the week -0.7% lower.
After declining during the prior week, oil resumed its own upwards push with Brent Crude adding +2.2% to $95.41 a barrel. Resilient demand, particularly from China amid tight global supply underpinned last week’s gain. Copper partially reversed its prior weekly loss to record a gain of +0.6% to $8,213 a tonne on hopes that China’s economic recovery may be gathering some momentum. And to finish with gold, the precious metal slumped by -3.7% to $1,857 with the resurgence in the US Dollar remaining a notable headwind.
Week Ahead
| Day | Country | Measure | Period | Forecast | Previous |
| Monday | Europe | Unemployment Rate | August | 0.06 | 0.06 |
| UK | Nationwide House Price Index YoY | September | -5.70% | -5.30% | |
| US | ISM Manufacturing PMI | September | 47.70 | 47.60 | |
| Tuesday | - | - | - | - | - |
| Wednesday | Europe | PPI Inflation YoY | August | -11.60% | -7.60% |
| Europe | Retail Sales MoM | August | -0.30% | -0.20% | |
| Europe | Final Composite PMI | September | 47.10 | 47.10 | |
| UK | Final Composite PMI | September | 46.80 | 46.80 | |
| US | ISM Services PMI | September | 53.60 | 0.55 | |
| Thursday | - | - | - | - | - |
| Friday | US | Non-Farm Payrolls | September | 163K | 187K |
| US | Unemployment Rate | September | 3.70% | 3.80% | |
| US | Wages Growth YoY | September | 4.30% | 4.30% |
Source: Refinitiv Workspace, 02/10/23
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