Mid-week market update: 25 August 2022

In the US the S&P 500 Index closed up 0.3%, with all 11 of the major industry groups rising, led by the energy and real estate sectors. The Nasdaq 100 Index climbed 0.3% as yields steadied above 3% and the Dollar fluctuated. The blue-chip Dow Jones Industrial Average rose 0.2%.

After a blistering rally from mid-June through July, stocks have cooled this month as worries escalate about how aggressively the Fed will raise rates to cool decades-high inflation.

The S&P 500 has surged 13% from its June low on hopes that inflation has started to peak, which would allow the Fed to soften its stance. Bond yields have jumped recently in anticipation that the Fed will continue to lift rates aggressively. That has weighed on tech and growth stocks, whose elevated valuations become targets as borrowing costs rise.

Looking ahead, the Commerce Department’s second estimate of second quarter Gross Domestic Product is due Thursday morning.

Wednesday’s economic data offered a mixed picture, with US pending home sales falling in July to the lowest level since the start of the pandemic, while orders placed with US factories for core capital goods rose by more-than-expected last month.

As such, the disconnect between the magnitude of the recent market bounce since mid-June and the Federal Reserve’s coordinated and aggressive pushback against the pivot narrative may point more towards a ‘bear market rally’, driven largely by short covering/depressed positioning/technical dynamics, all of which seem to be fading. With this in mind, maintaining a bias towards defensive, diversifying assets and defensive, inflation-resilient companies makes sense in the current environment.

Some of the main moves in markets:


  • S&P 500 futures rose 0.40% as of 7.00 am in London. The S&P 500 rose 0.30%
  • Nasdaq 100 futures rose 0.40%. The Nasdaq 100 rose 0.30%
  • Japan’s Topix Index was up 0.50%
  • South Korea’s Kospi Index added 1.00%
  • Australia’s S&P/ASX 200 Index gained 0.70%
  • China’s Shanghai Composite Index climbed 0.20%
  • Hong Kong’s Hang Seng Index surged 1.60%
  • Euro Stoxx 50 futures rose 0.20%


  • The Bloomberg Dollar Spot Index fell 0.20%
  • The Euro was at $0.9992, up 0.30%
  • The Japanese Yen traded at 136.71 per Dollar, up 0.30%
  • The offshore Yuan was at 6.8584 per Dollar, up 0.30%


  • The yield on 10-year Treasuries was at 3.10%
  • Australia’s 10-year yield climbed four basis points to 3.67%


  • West Texas Intermediate Crude rose 0.40% to $95.25 a barrel
  • Gold was at $1,756.92 an ounce, up 0.30%

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