US growth stocks bounced strongly last week, buoyed by a number of positive earnings results, the most impressive of which came from key artificial intelligence chip manufacturer NVIDIA[1]. The NASDAQ, synonymous with the US technology sector rose by +2.3% whilst the S&P 500 added a more modest +0.8%. Volatility remained elevated within the US treasury market, the 10-year yield briefly touching its highest level since 2007 before falling back to a broadly unchanged 4.25% on Friday. That was despite Federal Reserve Chairman Jerome Powell reiterating that he expects interest rates will have to remain higher for longer during a speech at the closely monitored Jackson Hole Symposium on Friday[2].

In Europe, equities benefited from a decline in natural gas prices on the Continent[3] with the MSCI Europe ex UK index concluding the week +0.8% higher. The FTSE 100 also climbed, the +1.1% uptick a first weekly advance in the past four weeks. Lower gilt yields were supportive with the 10-year security retreating by 23 basis points (bps) to 4.45%. Moving to Asia, the Nikkei 225 in Japan rose by +0.6% on the back of encouraging economic data whilst in China, the Shanghai Composite slumped by -2.2%. Economic concerns, particularly around potential deflation and unemployment amongst the nation’s youth, alongside deep issues within the property sector continue to weigh heavily on investor sentiment.

As for commodities, oil prices pulled back slightly with Brent Crude falling by -0.3% to $84.46 a barrel. It was a second straight weekly loss, reflective of easing concerns relating to supply and modest weakness in the US Dollar. Gold also benefitted from the US Dollar dynamic with the precious metal adding +0.7% to $1,919 an ounce.

Week Ahead

Source: Refinitiv Workspace, 29/08/23

Past performance is not indicative of future performance.

The value of an investment may fall as well as rise. You may get back less than the amount invested.

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[1] NVIDIA – Second Quarter Fiscal 2024 Financial Results Press Release, 23/08/2023. 29/08/23

[2] Federal Reserve – Inflation: Progress and the Path Ahead, 25/08/2023. 29/08/23

[3] T. Rowe Price – Global Markets Weekly Update 25/08/2023. 29/08/23

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