🦉 This Week in the Markets

Welcome to your weekly market wrap-up.

The weekend is almost here, pour yourself a cup of coffee, take a seat and catch-up with financial markets.

I’ve been doing the reading and scrolling for you, and brought you the most relevant updates.

end of week markets update

1) September has kicked off with some ups and downs. Interestingly, on Wednesday, the S&P500 initially dropped over 1% but then made a stunning comeback, closing more than 1% up.

A strong close after a significant drop often signals a resilient market that can bounce back. Fun fact: October 2022 marked the bottom of the bear market that year.

2) Take a look at the chart below, and you’ll notice that September and October are usually the weakest months of the year. For whatever reason, it's pretty normal to see a 5-10% correction around this time. So, don’t be surprised if we continue to see choppiness.

3) This week’s example of alarmist, attention grabbing news:

‘Recession already here: Here’s why the economy is cracking!’

It’s a perfect reminder of the old saying: “Economists: They’ve predicted five of the last two recessions.”

4) Nike is currently facing one of its worst slumps in decades. Recently, shares had a jaw-dropping 19.2% in just one day. Which is the company’s biggest one-day decline since 2001 and its second-worst in 44 years as a public company.

It feels like just yesterday that Nike was flying high during the pandemic, with its stock skyrocketing and the company looking like a sure thing.

This is a great reminder of why picking individual stocks can be so tricky. Even the biggest names can stumble, just because you invest in a superstar company doesn’t mean you’re safe.

charts

With markets anticipating a drop in interest rates, the 30-year mortgage rate in the US has moved down to 6.20%, the lowest level in 19 months (February 2023). Maybe this is what revives existing home sales.

Gold just hit a new all-time high this week, flying past $2,500 per ounce - it’s on a remarkable run this year.

What’s fueling this surge? Emerging market central banks are buying gold like crazy. With inflation and government deficits on the rise, retail investor are buying gold as a hedge against currency debasement (unlike crypto which is not doing much at the moment).

An oddball data point. Used Rolex watch prices are down big. The resale price in the secondary market has dropped 30% from two years ago.

And finally, some parting wisdom:

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