S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
Danske Research notes that a strong US labour market report increased expectations of a more hawkish Federal Reserve, pressuring global equities. The S&P 500 declined while the Stoxx 600 posted a small gain, with cyclicals outperforming and rate-sensitive sectors underperforming. The team highlights that, despite Friday’s weakness, it was broadly a cyclical week, with Financials, Communication and Technology outperforming defensives.
Cyclicals outperform as defensives lag
“A strong US labour market report reignited fears of a more hawkish Fed and pushed equities broadly lower on Friday. The S&P 500 fell 0.4%, while the Stoxx 600 edged 0.1% higher.”
“Cyclicals held up relatively well like it should given the growth implications of stronger labour market data. Industrials, semiconductors and materials outperformed. “
“However, rate-sensitive areas such as biotech, software and real estate lagged and ultimately, higher rates trumped stronger growth expectations for most stocks, with roughly 65% of US stocks finishing lower on the day.”
“Despite Friday’s weakness, this concludes a generally cyclical week. Sector moves have not been dramatic, but the direction has been consistent.”
“Financials, communication and technology have gained around 2% over the past week, while more defensive areas such as energy, consumer staples and healthcare have fallen 0.5-1%.”
“US markets are closed for Labour Day today.”
