Market Digest: Bears Roared, Rally Awaited
Where the Market Stands
Summer’s escapade is over and the bear market has woken up with a bang. Yesterday, shore‑up positivity was wiped out as the U.S. market opened after Labor Day, and the squeeze continued throughout the trading day.
- S&P 500 slid more than 2% – the worst decline since August.
- Nasdaq 100 fell over 3% – the largest one‑day dip since July.
- Nvidia tumbled 10% – a record single‑day market‑cap loss for an S&P stock.
- Japan’s Nikkei fell 4%. Taiwan’s Taiex slid over 5%.
What Drove the Decline?
Data gave the market a subtle shove downwards. The ISM Manufacturing PMI was 47.2, just below the expected 47.5, but it marked the first month‑over‑month rise since March. Heavy‑metal pricing climbed, and new orders hit their lowest since last May – not enough to justify a 2% wall‑street wobble, yet enough to make traders nervous about any future downside surprises.
Crude, Currency and Bonds: The Full Spectrum
- Oil was a double‑drop: Brent and WTI fell around 5%, with WTI minus $70/barrel – a record slump since last October.
- In the FX playbook, the USD and JPY bought the safe haven bob, while higher‑beta G10s like AUD, NZD, NOK and GBP ran into stiff headwinds.
- U.S. Treasuries saw demand spike, especially on the longer end, but new corporate issues – a record day of IG bond sales – kept gains in check.
The dip is a buying opportunity in the long haul, as the path of least resistance still heads up. Economic and earnings growth remain healthy, and the Fed’s “put” provides cushion. Dips, in my view, remain medium‑run buying chances – but “Mr Market” definitely gives us a better angle for 2024’s final stretch.
What’s Ahead – A Calendar of Pain
Expect the U.S. market to focus heavily on next week’s data:
- JOLTS Job Openings: The July reading is expected to dip to 8.1 M from 8.184 M, tightening after the Fed’s Beige Book release.
- Factory orders and the Fed Beige Book will also hit the feeds.
- The Bank of Canada is scheduled to announce policy with a possible 25 bp cut – only the third in a row – and may further cut in October/December.
- Eurozone and UK PMIs (services & composite) are due, but they’re unlikely to move the needle dramatically.
All eyes on whether the labor market continues to soften—and how that impacts policy expectations. In short: keep an eye on surprises; the quiet markets are still fragile after yesterday’s fall.
