Stocks End August Flat After Early Collapse; Bonds & Gold Soar On Rate-Cut Hopes
The S&P 500 traded in a 500+ point band in August (about 10%) as investors first became very concerned that an imminent recession was being ignored by the Fed, before becoming more convinced that a recession may not be that imminent and the Fed is poised to cut rates at its September meeting.
Along the way, the Nikkei dropped 12% in one day (only to reclaim almost all the lost ground by today, Sep-30) and the VIX spiked above 60 before receding back to 15 as uncertainty receded...
Source: Bloomberg
August was a replay of July in terms of macro surprise data (early ugly, late recover)...
Source: Bloomberg
...but August really spooked the markets (after payrolls - recession concerns), sparking a bloodbath in stocks to start the month, stocks (broadly speaking) rallied back to unchanged-ish on the month (flat-ish on the week and the day) with the S&P 500 leading the month while Small Caps lagged...
Source: Bloomberg
Rate-cut expectations rose on the month - mostly driven by the early month panic...
Source: Bloomberg
Treasuries were aggressively bid on the month led by the short-end (2Y -33bps)...
Source: Bloomberg
...which steepened the curve significantly (disinverting 2s30s)...
Source: Bloomberg
Bonds and stocks disagreed notably on the month and the recession odds...
Source: Bloomberg
Gold rallied to new record highs on the month after the early tumble...
Source: Bloomberg
Oil oscillated in a broad range but ended lower on the month...
Source: Bloomberg
The dollar was down hard on the month but staged a decent comeback this week after testing near YTD lows...
Source: Bloomberg
Bitcoin ended the month lower after recovering the early month losses and fading back...
Source: Bloomberg
Finally, it was a big week for the world's most important stock...
Source: Bloomberg
Can NVDA keep the recession risks away single-handedly?