Sean Burgess | PraxisIFM Asset Manager and Co-Founder Emirates HR
US WAGE GROWTH HITS 9-YEAR HIGH
With hourly earnings up 2.9 percent year-over-year whilst the economy added 201,000 jobs over August. This latest round of positive economic data makes it almost a certainty that the Federal Reserve will hike rates by 25 basis points at their meeting later this month. In response, the US dollar strengthened against a basket of its peers with the dollar index hitting a 2-day high on the news.
TRUMP THREATENS TARIFFS ON ‘ALL’ CHINESE IMPORTS
after announcing that tariffs on $200bn worth of Chinese goods would happen “very soon” and could be followed by another $267bn. Major companies, including Apple, Dell and Cisco, have warned that tariffs will end up increasing the cost of their products and hurting the US consumer. All major US indices declined over the week with the tech-heavy Nasdaq suffering the most.
JAPANESE STOCKS ROCKED BY TWO NATURAL DISASTERS
a typhoon and an earthquake, with the market suffering its worst weekly decline in two months. Typhoon Jebi was the strongest storm in 25 years whilst the earthquake on the Northern island of Hokkaido measured 6.6 on the Richter scale, with both causing fatalities. The Nikkei 225 lost 2.4 percent over the week and pushed the index 2 percent into the red year-to-date
OIL PRICES SLIP 2.9 PERCENT,
The first weekly loss since mid-August, as investor sentiment was damaged by a stronger US dollar and weaker energy demand. Expectations of weaker demand are being driven by the anti-trade rhetoric of the US and retaliatory pressures of other nations. However, the oil market is far more concerned with the actual impact on supply of US sanctions on Iran which come into effect later this year.
In other financial news:
- South Africa enters a recession, after the economy shrank 0.7 percent in the second quarter due predominantly to a 29.2 percent decline in the agriculture sector.
- Argentina asks for early release of $50bn loan, from the International Monetary Fund, plus announces a new austerity program in order to stabilise the peso.
- Cryptocurrencies suffer further setbacks, with Bitcoin down 4.5 percent on Thursday, after Goldman Sachs shelved plans for a cryptocurrency trading desk.
- Tesla shares tumble more than 9 percent, after the CEO Elon Musk was recorded smoking marijuana, which is legal in California, live on Joe Rogan’s podcast.