Can markets continue to tough it out?

Can markets continue to tough it out?
  • Markets in August
  • Global market indices
  • Currencies
  • Fixed Income
  • Commodity sector news
  • Global Macro Updates
  • Key events in September

Markets in August

August was a generally tough month for equities with the global stocks rally appearing to have hit a wall as lower trading volumes caused greater swings in prices. The S&P is on track to lose its five-month positive streak and even the Nasdaq 100 is likely to have its worst month this year. Bond markets were somewhat volatile in August as yields surged on signs of stronger-consumer demand fuelling expectations that central banks are likely to be leaving interest rates higher for longer than expected. Yields on 10 year benchmarked Treasures, Gilts and Bunds hit multi-year highs in August. These higher yields have put downward pressure on global stock markets as they appear less attractive when valuations have grown substantially in many countries.

However, the US economy, despite being surprisingly resilient and growing 2.1% on an annualised basis in Q2 (revised down from initial estimates of 2.4%) after increasing at a 2.1% annualised rate in Q1, does appear to be slowing. Business activity in August was down with job growth falling to 1.51 job openings for every unemployed person in July, the lowest ratio since September 2021. The Conference Board’s Consumer Confidence Index was also down in August, falling to 106.1 from a downwardly revised 114.0 in July. Nevertheless, employers are largely hoarding labour after difficulties hiring during the pandemic. This is keeping wage growth still higher than the Fed would like, helping to drive consumer spending, with retail sales up 0.7% month-over-month in July of 2023, marking a fourth consecutive rise, and beating market forecasts of a 0.4% increase.

Meanwhile Europe is still struggling with inflation and growth concerns. Although real GDP in the Eurozone was 0.3% on a quarterly basis and 0.6% on an annual basis, business activity appears to be slowing with Eurozone’s flash composite purchasing managers’ index, falling to 47.0 for August from 48.6 in July. Inflation is also once again likely to cause worries for the ECB, with CPI in Germany rising to 6.4% in August from a year earlier. Spain also saw a jump up in inflation to 2.4% in August, up from 2.1% in July, a second month of acceleration. The ECB will be watching the core CPI number across the Eurozone closely. As ECB President Christine Lagarde said at the Jackson Hole Symposium last week, future ECB decisions will depend on the inflation outlook, the dynamics of core price growth and the strength of monetary-policy transmission. However, despite hopes that the ECB may hold during its meeting on 14 September, rising inflation in Germany and still high core inflation may add to the case for another 25 basis point rise at the next ECB meeting on 14 September.

Global Market Indices


S&P 500 -1.99% MTD and +17.14% YTD
Nasdaq 100 -1.87% MTD and +41.35% YTD
Dow Jones Industrial Average -1.99% MTD and +5.14% YTD
NYSE Composite -2.15% MTD and +5.86% YTD


Stoxx 600 -2.59% MTD and +8.06% YTD
DAX -3.37% MTD and +14.14% YTD
CAC 40 -1.78% MTD and +13.76% YTD
FTSE 100 -2.93% MTD and +0.29% YTD
IBEX 35 -0.94% MTD and +16.06% YTD
FTSE MIB -2.46% MTD and +21.98% YTD


MSCI World Index -3.20% MTD and +13.07% YTD
Hang Seng -7.95% MTD and -6.56% YTD

Mega cap stocks had a mixed August with Alphabet, Amazon, and Nvidia, all up and Microsoft, Apple, Meta Platforms, and Teslaall down on the month. Nvidia in particular had a wild month as its shares reached an all time high in August after it reported $10.32 billion in data centre revenue, which was up 171% year over year. Tesla had a 3 to 1 stock split on 25 August.

Energy stocks had a generally good August with the sector gaining 1.1% so far this month. Apa Corp (US), Phillips 66, Marathon Petroleum, Baker Hughes Company, BP, Energy Fuels, ExxonMobil, and Shell all up. Occidental Petroleum Corporation is neutral and Chevron and Halliburton are down.

Materials and Mining stocks had a poor August on concerns over slowing global growth keeping commodity prices at low levels. Mining stocks Freeport-McMoRan, Newmont Mining, Nucor Corporation, and Sibanye Stillwaterareall down. Materials stocks performed poorly in August with Albemarle Corporation, Mosaic, Celanese Corporation, CF Industries Holdings, and Yara International all down.

Mining group Sibanye Stillwater, in its 1H2023 report, said its profits fell 37%, it cut its interim dividend almost 62% after it was hit by production issues in the US, social unrest in France, and lower PGM prices, and it moved into a small net debt position due to Rand falling against the USD.


Oil prices were generally up in August due to tighter-than-expected US crude supplies, while growing concerns about the Chinese economy, the world’s largest importer of oil products, and its continuing manufacturing slowdown, limited gains. Although slowing growth in China, Europe and the US is worrying markets, supply is likely to continue to remain tight as Saudi Arabia, the world’s biggest oil exporter, is largely anticipated to extend its voluntary output cut into October. Supplies may also be threatened by hurricanes in the Gulf coast affecting oil production there. In addition, the military seized power in Gabon, an OPEC member, on Wednesday, which could hit the country’s crude supplies and tighten the market further.

Gold prices firmed towards the end of August as markets took signals of a slowing US economy to heart with growing expectations that the Fed will pause in September. Gold was battered earlier in August as yields surged due to rising borrowing needs. However, gold is likely to have fallen almost 1% overall this month due to a rising US dollar and the yield surge.

Industrial metals such as copper and aluminium had a difficult month as investors worried about slowing growing demand, particularly from China and uncertainty over the stimulus on offer from the government there. Aluminium was down almost 40% from last year in August and copper on track for its first monthly decline in three months.


The dollar was largely up in August, supported by rising yields, putting additional pressure on US exporters and emerging market economies. However, it fell to a two-week low against the Euro on Wednesday after ADP data showed that US private payrolls rose less than expected in August, adding to expectations that the Federal Reserve would stop raising interest rates. The GBP is-0.93%MTD and +5.13% YTD against the USD. After inflation fell to 6.8% in July with core inflation remaining the same as June at 6.4%, the Bank of England is expected to raise rates another 25 basis points in September. This suggests that Sterling could continue to outperform. The EUR-0.64%MTDand +2.07%YTD against the USD.


Bitcoin -6.65% MTD and +64.42% YTD
Ethereu -8.06% MTD and +42.13% YTD

Cryptocurrencies were hit this month by a surge in global yields. They started to rise as yields climbed down on weakening business activity data.

Fixed Income

US Treasuries 10 year yield to 4.11%.
German 10 year yield to 2.54%. 
UK 10 year yield to 4.42%. 

US Treasury yields were up in August as the Fed chair Jerome Powell reiterated his hawkish message at the Jackson Hole Economic Symposium. However, as the US economy slows down and the labour market loosening, easing concerns for future Federal Reserve interest rate hikes, Treasury yields are still likely to fall.

Markets, having spent most of August thinking that the ECB may hold in September, given that growth in the Eurozone economy, particularly in Germany, is slowing are now having a brief rethink as inflation jumped up in Germany and Spain. Traders will be looking to Eurozone CPI numbers and ECB Monetary Policy Meeting Accounts later on today.

Inflation in the UK remains well above target at 6.8% but has slowed significantly from its 11.1% peak in October. Growth has also slowed providing conditions for bonds to thrive. The BoE is widely expected to raise interest rates another 25 bps at its meeting on 21 September.

Note: As of 5:30 pm EDT 30 August 2023

Global macroupdates

Can the Fed be neutral? During the Jackson Hole Economic Symposium, the gathering of select global central bank heads and policymakers in Wyoming, USA, Fed Chair Jerome Powell made clear that the Fed may need to lift interest rates further to finish the job of lowering inflation. However, the conditions are ripe for a policy pause with much depending on the Fed’s favourite gauge, the Personal Consumption Expenditures (PCE) and monthly employment numbers later this week. There are otherwise continuing signs of a weakening labour market, as private payrolls rose by only 177,000 jobs last month and job openings are at their lowest in over two years, slowing growth; S&P Global said its flash US Composite PMI index, which tracks manufacturing and service sectors, fell to a reading of 50.4 in August from 52 in July, biggest drop since November 2022, and retail sales are falling as is consumer confidence. The Fed will likely be trying to understand if the neutral rate has risen as real interest rates are now positive or if further monetary policy restraint will be required given the Fed’s apparent concern over services inflation.

Which way for Europe? A sentiment gauge published by the European Commission slid to 93.3 from 94.5 in July. That’s the fourth monthly decline. Slowing PMIs, particularly in Germany, along with rising inflation there and in Spain, may split ECB policymakers further with more dovish members seeking to suggest that rate rises are negatively affecting the Eurozone economy and more hawkish members focused on rising inflationary pressures and the need to contain them. Whether or not the ECB is at peak will largely depend on what the core inflation rate is and whether wage pressures, particularly in the service sector, may accelerate, further feeding into core inflation. For markets the question is whether the ECB will take a wait-and-see approach, with a pause in September and a reconsideration in October.

Is the UK stagflation bound? As noted by the Financial Times, there appears to be a range of contradictory indications about the direction the British economy is actually going. Consumer confidence is up with GfK Consumer Confidence showing an improvement in August, rising to -25 in August, up by five points from -30 in July. There is also rising wages, excluding bonuses, up 7.8% in April to June. However, growth appears to be slowing with the S&P Global/CIPS flash Composite PMI at 47.9 in August, down from 50.8 in July and the lowest since January, retail sales down by 1.2% from the previous month in July 2023, and a slowing labour market with the unemployment rate for April to June 2023 increased by 0.3 percentage points on the quarter to 4.2%. The unemployment rate is also up, rising to 4.2% in the three months from June, the highest in nearly two years. The housing market is also not looking good with mortgage rate approvals falling by nearly 10% between June and July. Retail sales were also down 1.2% in July, but that may just have been due to an overly wet weather month. What remains to be seen is whether the entire UK economy will remain under water if the Bank of England, in its bid to contain still too high inflation, remains on its policy tightening projectory beyond the Autumn and puts even further brakes on economic activity.

Key events in September

4-7 Sep 2023 43rd ASEAN Leaders’ Summit. The participants will discuss economic, political, security and sociocultural developments in Southeast Asian countries in Jakarta, Indonesia.

5-16 Sep 2023 G77+China Summit. The heads of state and government of the G77, a coalition of developing nations, will meet in Havana, Cuba for a summit with the theme "Current development challenges: Role of Science, Technology and Innovation".

9-10 September 2023 G20 Summit. This year’s summit theme, “One Earth, One Family, One Future,” will see climate action take high priority. ​​India is likely to continue to push for better Global South representation in multilateral institutions. The African Union may also be made a permanent G20 member at the summit, after receiving support from United States’ President Joe Biden.

13-30 September 2023 Opening of the 78th UN General Assembly. The Russia-Ukraine conflict will likely remain top of the agenda at the annual meeting.

13 September 2023 European Commission State of the Union. European Commission President von der Leyen will outline the main priorities and flagship initiatives for the year to come. This will be the last address in this legislative mandate, ahead of the 2024 European elections.

13-14 September 2023 Belt and Road Summit, Hong Kong. The Summit gathers senior government officials and business leaders from countries and regions along and beyond the Belt and Road to exchange insights on multilateral co-operation and explore business opportunities.

14 September 2023 ECB meeting and monetary policy decision. The ECB is expected to continue to raise rates as ECB President Christine Lagarde has said “there is still much more ground to cover.” However, much will depend on whether previous increases have filtered through enough to the economy, and if slowing growth, especially in the largest Eurozone economy, Germany, increases reluctance among policymakers to continue tightening.

19-20 September 2023 US Federal Reserve Monetary Policy meeting. The Fed will remain data dependent, but with headline inflation likely to continue falling, the Fed will be focused on the core PCE. Despite signs of economic slowdown, the labour market loosening, raising hopes that wage inflation may have peaked, consumer demand has remained resilient.

19-20 September 2023 Sustainable Development Goals Summit. Marking the mid-point of the implementation of the 2030 Agenda for Sustainable Development, the SDG Summit will review the implementation of the 2030 Agenda for Sustainable Development and progress on the Sustainable Development Goals.

21 September 2023 Bank of England Monetary Policy Summary and minutes. BoE officials are expected to continue raising rates through the end of Q3 as core inflation will likely remain in uncomfortable territory for policymakers.

28 September 2023 IEA Critical Minerals and Clean Energy Summit, Paris, France. The high-level international meeting will bring together ministers from mineral producing and consuming economies as well as industry, investors and civil society to address supply and sustainability questions. The event will focus on measures to promote the secure, sustainable and responsible supply of raw materials that have a central role in clean energy transitions around the world.

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While every effort has been made to verify the accuracy of this information, EXT Ltd. (hereafter known as “EXANTE”) cannot accept any responsibility or liability for reliance by any person on this publication or any of the information, opinions, or conclusions contained in this publication. The findings and views expressed in this publication do not necessarily reflect the views of EXANTE. Any action taken upon the information contained in this publication is strictly at your own risk. EXANTE will not be liable for any loss or damage in connection with this publication.

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