MARKET CLOSED
Due to the Labor Day holiday, the stock market will be closed today.
CRYPTOS DECLINE
Bitcoin experienced a significant drop, falling to nearly the $58,000 mark and extending a week-long decline of over 10%. This downward trend was mirrored across the broader crypto market, with major currencies such as SOL, BNB, XRP, ADA, and DOGE all registering losses. BTC ETFs saw a total net outflow of $175 million, while ETH ETFs remained stable despite substantial trading volume. Traders are noting the seasonal pattern of September typically being negative for Bitcoin, but there is optimism that potential interest rate cuts by the U.S. Federal Reserve could potentially reverse this trend. Experts highlighted that rate cuts could lead to increased flow of the U.S. dollar, and this could strengthen Bitcoin’s position as a store of value.
BEARISH STANCE
Hedge funds are increasingly betting against bank and financial stocks, with financial stocks being the most net sold sector at Goldman Sachs’ trading desk as of last Friday. This trend indicates a pessimistic outlook on the performance of these companies in the market. Short positions, which anticipate a decrease in asset value, have been favored by hedge funds amidst reports of job cuts and reduced dealmaking in the financial sector. While banking indexes have shown minor gains, financial stocks have been consistently sold for the past several weeks, with global selling predominantly led by North America, developing Asian markets, and Europe. Moreover, despite a rise in total deal values globally, there has been a significant decline in mergers and acquisitions activities, as observed through LSEG data. However, it is worth noting that there has been some modest net buying interest in consumer finance, suggesting varied investment strategies among hedge funds during this period.
PRICE DROP
Base metals, particularly copper and aluminum, are experiencing a decline in prices, with copper dropping by 0.7% to $9,185 a ton and aluminum slipping by 1.4% to $2,411 a ton. Market analysts are finding it challenging to witness any significant breakthrough in terms of trading momentum. Although copper prices have not seen a major decrease recently, there seems to be a limited interest in selling at lower prices. However, the pressure on copper persists due to the increased inventories on the London Metal Exchange resulting from substantial exports from China, weak demand within China, and the strength of the U.S. dollar. Similarly, nickel prices have fallen by 0.5% to $16,620 a ton and are grappling with surpassing the crucial $17,000 a ton mark, which is essential for miners to consider restarting production.
KEY EVENTS HAPPENING THIS WEEK
Tuesday: Construction spending report for July, and S&P final U.S. manufacturing PMI and ISM manufacturing reports for August.
Wednesday: Fed Beige Book, U.S. trade deficit and job openings reports for July, and auto sales report for August.
Thursday: ADP employment report for July, U.S. productivity revision for second quarter, S&P final U.S. services PMI and ISM services report for August, and initial jobless claims report for the week ending on August 31.
Friday: U.S. employment report and unemployment rate report for August, and speeches from New York Fed President Williams and Fed Gov. Christopher Waller.
