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Stephen Lennon’s Market Review September 3rd

03 September 2018




It was good week for stock markets in the US as all 3 of the major benchmark indices posted gains and in doing so, capped off their best August performance in years. August has traditionally been one of the worst months for equity markets (along with September!) however strong monthly gains from Apple & Amazon helped the NASDAQ Index to its best August return since 2000, ending the month up over 5.7%. The DJIA & S&P 500 also finished the month up 2.1% & 3.0% respectively capping their best August since 2014.

Conversely, emerging markets are continuing to come under pressure and last week was no different. With a drop of over 20% in 2 days last week, the Argentinian Peso replaced the Turkish Lira as the worst performing currency in emerging markets this year. Struggling currencies have helped to drive the MSCI EM index to a loss of over 3 % so far this year.

In fixed income markets, the focus was very much on Italy last week. On Friday, Fitch Ratings changed its outlook on Italy to negative from stable. The grade is currently just 2 notches above junk status and the move sent the yield spread between Italian & German government bonds to its widest level in 12 months. Elsewhere more uncertainty around Brexit led to a spike in the 10 Year UK Gilt yield, rising 15bps to 1.43%.



Trade talks between the US & Canada aimed at revamping the NAFTA agreement ended on Friday with no agreement however talks are due to resume this week. Trump has threatened to exclude Canada completely in a series of tweets over the weekend.



Argentina’s central bank hiked its benchmark rate from 45% to 60% on Thursday, the highest in the world, in a last-ditch effort to support the Peso after it plunged to a record low against the US Dollar. The currency has lost over 50% of its value vs the Greenback this year on the back of concerns about the country’s rising debt crisis.


Invesco staff portraits, photographed at their office in Sandyford, Dublin on Monday, 13 February 2017.
Photography by Brendan Duffy.

By Stephen Lennon, Performance Analyst

Stephen is based in our Dublin Office having joined Invesco in October 2015. He previously spent 2 years working with AIB and has a total of 3 ½ years’ experience in the financial services industry. Stephen is a graduate of Trinity College Dublin, where he graduated with an Honours degree in Business & Economics and is currently undertaking the CFA Program.

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