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Weekly Market Recap | 9/11/23

What happened last week

  • Strong data drove Treasury yields higher and stocks lower in a holiday-shortened trading week.
  • As China signals iPhone bans, $200B of Apple’s market capitalization was erased.
  • Brent crude oil closed the week above $90/barrel for the first time since November last year.

What we’re watching this week

  • August CPI is the most important data
    release this week; wage inflation read-throughs from the UAW negotiations are a related inflation data point.
  • Apple product launch on Tuesday will be in focus.
  • Retail sales data in the US and China will provide an update on consumer spending in the two largest economies.

Horizon’s Investment Management Views

  • Rising Treasury yields due to stronger economic data drove a sell-off in equities; jobless claims fell to their lowest levels since February, and a strong ISM Services print signaled a possible re- acceleration in economic activity. As Russian and Saudi oil production cuts propelled Brent crude over $90/barrel, energy equities were the bright spot. Meanwhile, Apple, the largest holding in the S&P 500 and the NASDAQ 100 sold off almost 6% on news of China banning iPhone use in some government-related sectors. With this in mind, Apple’s annual product launch on Tuesday should draw heightened interest.
  • Suffice it to say that September has not started well for equity bulls. Although recent price action has left much to be desired, a stronger-than-expected economy and rising energy costs are not good reasons to cut equity exposure; instead, these developments are likely to drive near-term volatility and could cause a change to what exposures have been winning and losing recently in global equities.
  • On the inflation thread, the August CPI release will be the week’s major macro highlight. Rising energy prices are expected to increase headline inflation, while core inflation is expected to moderate. CPI won’t sway the Fed’s September decision (no rate change is expected); it could alter policy from November onward. Further, we are watching the labor negotiations in the auto sector for broader potential implications for wage inflation. An ECB policy meeting, US retail sales, and monthly data from China will round out a busy week.
Disclosure

The Nasdaq 100 Index is a basket of the 100 largest, most actively traded companies listed on the Nasdaq stock exchange. Global stocks are represented by the MSCI ACWI Index, which is a stock index designed to track broad global equity-market performance. The S&P 500 Index is is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. The commentary in this report is not a complete analysis of every material fact in respect to any company, industry or security. The opinions expressed here are not investment recommendations, but rather opinions that reflect the judgment of Horizon as of the date of the report and are subject to change without notice. Forward looking statements cannot be guaranteed. We do not intend and will not endeavor to provide notice if and when our opinions or actions change. This document does not constitute an offer to sell or a solicitation of an offer to buy any security or product and may not be relied upon in connection with the purchase or sale of any security or device. Before investing, an investor should consider his or her investment goals and risk comfort levels and consult with his or her investment adviser and tax professional. References to indices, or other measures of relative market performance over a specified period of time are provided for informational purposes only. Reference to an index does not imply that any account will achieve returns, volatility or other results similar to that index. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. It is not possible to invest directly in an index. This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. Horizon Investments and the Horizon H are registered trademarks of Horizon Investments, LLC.

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