Provides a market round up, a selection of useful data points we use for our investment analysis, and some interesting articles/charts we have noticed recently.
The end of the US Friday session saw stocks give back a portion of the previous week’s strong gains after a prominent “hawkish” Federal Reserve policymaker appeared to dampen hopes that inflationary pressures had peaked. The growth-oriented technology and communication services sectors underperformed within the S&P 500 Index, with the latter dragged down by a sharp decline in Facebook parent Meta Platforms. Subdued summer trading was accompanied by some volatility Friday as USD 2.3 trillion in options expired.
In an interview with The Wall Street Journal on Thursday, St. Louis Fed President James Bullard questioned whether inflation had really peaked despite the surprise downturn in the year-over-year increase in the consumer price index (from 9.1% in June to 8.5% in July) reported the previous week. “The idea that inflation has peaked is…not statistically really in the data at this point,” Bullard told the Journal, while stating that he was likely to vote in favour of another 75-basis-point (0.75 percentage point) increase in the federal funds target rate at the Fed’s next policy meeting.
The local markets ended the week marginally above the prior week despite tumultuous earnings reports from the major utilities companies. AGL Energy closed down 3.9 per cent to $7.84 after the country's largest generator posted an greater-than-expected 58 per cent drop in net profit after tax amid "unprecedented" market volatility.
Energy was the stand out sector once again with Woodside Energy climbed 4.2 per cent to a two-month high of $33.50, Santos added 6.4 per cent to a two-month high of $7.52 and Beach added 3.4 per cent to $1.695. Coalminers were up sharply as well, with Whitehaven advancing 6.2 per cent to an all-time high of $7.36, New Hope adding 4.0 per cent to a 10-year high of $4.93 and Yancoal gaining 6.2 per cent to $5.69.
US 13F season has also provided a lagging glimpse of how some of the worlds largest investors have positioned themselves over the last quarter. Most notable was Scion Asset Management, run by Dr. Michael Burry (of Big Short fame) who's latest filing showed he had sold everything bar one stock. Commentators have speculated whether this is extreme bearishness or simply a period of risk off for an investor who has historically been comfortable with taking large short positions.
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