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- Avanzai Weekly Recap - 08/29
Avanzai Weekly Recap - 08/29
Guillermo Malena
August 29, 2024
AI Generated Weekly Market Summary - August 29th 2024
The past week has seen notable movements across various asset classes, with forex pairs like GBPUSD and JPYUSD showing strong gains, while cryptocurrencies faced significant declines. Commodities presented mixed results, with gold maintaining its upward trajectory, while crude oil struggled. Equity markets demonstrated resilience, particularly the S&P 500, which has gained 24.13% YTD. Sector performance within the S&P 500 highlighted the strength of the Financials sector, while the Energy sector lagged. The elevated VIX index suggests increased market uncertainty, indicating potential risk aversion among investors. Overall, the market landscape reflects a complex interplay of recovery and volatility, with certain asset classes and sectors thriving while others face headwinds.
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Key Market Indicators
Asset Class | 1D | 7D | 30D | 3M | YTD | 1Y | 3Y |
|---|---|---|---|---|---|---|---|
EURUSD | 0.12% | 0.20% | 3.35% | 2.99% | 5.76% | 3.98% | -3.61% |
JPYUSD | 0.38% | 0.79% | 6.04% | 9.17% | 3.52% | 1.88% | -22.57% |
GBPUSD | 0.50% | 1.25% | 3.28% | 4.03% | 9.14% | 5.99% | -2.72% |
DX-Y.NYB | 0.54% | -0.41% | -2.89% | -3.47% | -4.10% | -2.38% | 8.63% |
BTC-USD | -5.37% | -7.16% | 8.14% | -2.15% | 40.79% | 36.31% | 160.45% |
ETH-USD | -8.30% | -11.06% | 5.23% | -27.03% | 7.77% | 11.66% | 51.88% |
Gold (GC=F) | -0.60% | 0.89% | 3.07% | 6.75% | 30.01% | 28.63% | 37.67% |
Crude Oil (CL=F) | -1.34% | 2.07% | -4.35% | -4.35% | -17.90% | -8.71% | 8.41% |
Copper (HG=F) | -2.02% | 0.10% | -0.36% | -11.28% | 10.14% | 9.51% | -3.97% |
Natural Gas (NG=F) | 3.99% | -3.56% | -2.75% | -23.02% | -25.11% | -29.18% | -54.69% |
S&P 500 (^GSPC) | -0.60% | 0.39% | 1.27% | 6.81% | 24.13% | 24.34% | 25.10% |
Dow Jones (^DJI) | -0.39% | 0.93% | 0.61% | 7.82% | 17.72% | 17.90% | 16.69% |
NASDAQ (^IXIC) | -1.12% | -0.36% | -0.25% | 4.89% | 26.07% | 25.91% | 17.46% |
Russell 2000 (^RUT) | -0.65% | 1.80% | -2.92% | 6.42% | 17.25% | 15.46% | -1.14% |
VIX (^VIX) | 10.89% | -2.51% | 4.58% | 18.24% | 33.46% | 18.41% | -9.18% |
In the past week, forex pairs like GBPUSD and JPYUSD showed strong gains, while cryptocurrencies faced significant declines. Commodities presented mixed results, with gold maintaining its upward trajectory, while crude oil struggled. Equity markets demonstrated resilience, particularly the S&P; 500, which has gained 24.13% YTD. The elevated VIX index suggests increased market uncertainty, indicating potential risk aversion among investors.
Sector Performance
Sector | 1D | 7D | 30D | 3M | YTD | 1Y | 3Y |
|---|---|---|---|---|---|---|---|
XLC | -0.66% | 0.03% | 1.32% | 5.51% | 27.04% | 28.48% | 4.22% |
XLY | -0.97% | -0.10% | -1.80% | 5.22% | 5.34% | 8.66% | 2.18% |
XLP | -0.42% | 0.81% | 5.68% | 8.04% | 13.24% | 12.68% | 15.01% |
XLE | -0.64% | 0.80% | -3.69% | -1.29% | -3.85% | 1.53% | 86.90% |
XLF | 0.25% | 1.95% | 2.67% | 9.43% | 28.28% | 30.21% | 16.68% |
XLV | 0.12% | 0.65% | 4.12% | 10.00% | 16.92% | 15.47% | 15.59% |
XLI | -0.05% | 0.91% | 1.02% | 5.84% | 22.30% | 19.34% | 23.95% |
XLB | -0.43% | 1.34% | 0.66% | 2.55% | 12.25% | 12.10% | 9.34% |
XLRE | -0.35% | 1.76% | 5.12% | 16.05% | 17.25% | 16.52% | -6.78% |
XLK | -1.38% | -0.44% | 0.28% | 4.57% | 27.41% | 26.47% | 40.21% |
XLU | 0.00% | 0.13% | 3.46% | 5.39% | 15.47% | 17.93% | 9.88% |
In the recent week, the Financials sector (XLF) has shown strong performance, leading with a 1.95% increase, while the Consumer Discretionary sector (XLY) has struggled, declining slightly. Over the past month, the Consumer Staples sector (XLP) has emerged as a top performer with a 5.68% gain, while the Energy sector (XLE) has faced challenges, dropping 3.69%. Year-to-date, the Communication Services sector (XLC) has excelled with a remarkable 27.04% increase, indicating strong investor interest, while the Energy sector remains in negative territory.
Correlation Table
Asset Class Pair | Previous Correlation | Current Correlation | Change |
|---|---|---|---|
DX-Y.NYB and GC=F | 0.59 | -0.81 | -1.40 |
DX-Y.NYB and ETH-USD | -0.58 | 0.77 | 1.36 |
JPYUSD=X and BTC-USD | 0.54 | -0.77 | -1.31 |
JPYUSD=X and ETH-USD | 0.36 | -0.95 | -1.30 |
JPYUSD=X and GC=F | -0.72 | 0.47 | 1.19 |
The most significant changes in correlations include a notable decrease in the correlation between the US Dollar Index (DX-Y.NYB) and Gold (GC=F), which shifted from a positive correlation of 0.59 to a strong negative correlation of -0.81. This shift suggests that as the dollar strengthens, gold prices are likely to decline, reflecting a typical inverse relationship. Conversely, the correlation between the US Dollar Index and Ethereum (ETH-USD) has increased from -0.58 to 0.77, indicating that Ethereum has become more positively correlated with the dollar, possibly due to increased institutional interest or market dynamics favoring crypto during dollar strength.
ETF Universe Performance
In the past month, the top 10 performing ETFs in the universe have shown impressive returns, reflecting a positive trend in the market. The best performer was the XLRE ETF, which focuses on real estate, achieving a remarkable performance of approximately 5.64%. Following closely were XLU, a utilities sector ETF, with a return of about 5.34%, and SCHH, which tracks U.S. housing, with a performance of around 5.30%. Other notable performers included IYR (5.13%), VNQ (4.98%), and XLP (4.78%).
Insights Summary
The current market landscape reflects a complex interplay of recovery and volatility, with certain asset classes and sectors thriving while others face headwinds. The performance trends indicate a cautious optimism among investors, but the elevated VIX suggests that market participants remain wary of potential disruptions. The analysis of sector performance within the S&P; 500 reveals a clear rotation towards Financials and Communication Services, while traditional defensive sectors like Utilities and Real Estate show mixed results. The correlation changes highlight evolving dynamics in cross-asset trading strategies, suggesting that traders may need to adjust their portfolios to account for these shifts. Overall, the market sentiment appears to be bullish across most asset classes, with some caution in commodities and specific forex pairs.
That is all for this week folks! Make sure to subscribe to receive next week’s update. 🤝
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