What Investors Are Thinking: The August Scan (3 min read)

August was a tumultuous month for markets. There was panic around yield curve inversions, fears of an escalating US-China trade war and concerns around political crises in countries ranging from the UK to Argentina to Hong Kong. Some markets stabilised towards the end of the month and into September, but not all.


Trump Vs. Fed

The first half of August saw the worst of it. The US yield curve inverted, real 10 US yields turned negative and 30 year US yields fell below 2%.  US stocks were down over 6% at one point, though they ended the month down only 1.6%. An intriguing debate also emerged between President Trump and the Fed around who was the cause for the sell-offs – Trump’s escalating trade war or the Fed’s reticence to ease policy dramatically. This will be one to watch for the months ahead.


Political Crises Abound

If emerging markets weren’t nervous enough around the US-China tussle, Argentina entered crisis mode as the market unfriendly Presidential candidate, Alberto Fernandez, handily beat incumbent President Macri in primary elections. The odds of a debt default shot up and the currency plunged to new lows. Meanwhile, just as UK data and the pound were stabilising, UK Prime Minister Boris Johnson announced at the end of August that parliament would effectively be suspended for five weeks. This saw the pound tumble into September. Finally, Hong Kong protests continued and the economy is teetering on recession.


What Investors were Reading

As for how investors were thinking throughout this period, we can gain insights from what they were reading on the Macro Hive site. In both Americas and Europe, the most read special was on oil markets, which showed investors were not just focused on collapsing yields. That said, the other popular reads for the regions were related to QE, MMT and market liquidity conditions. In Asia, unsurprisingly, the special report on renmimbi took the top spot, followed by the contrarian piece on recession forecasts being overdone.

Perhaps reflecting the state of the financial industry outside of Asia, our unique special written by an anonymous banker bemoaning the lack of opportunities for forty-somethings was widely read in the Americas and Europe.

Opinion Pieces: Most Clicked

We can get more colour by looking at which our curated content was most read or listened to. From our blog picks, the signalling power of the yield curve, housing markets and trade war-induced dollar strength were most popular. From our podcast picks, yield curve topics were again popular, but so was Brexit.

Bilal Hafeez is the Editor of Macro Hive and can be contacted here

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)

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