Weekly Market News 13th August

Last week commenced in a frenzy of panic on the markets, with Asian markets down 10% by the time we woke up last Monday. It was all thanks to a worrying data point (which we’ll dig into later- keep reading!) which suggested that the US unemployment rate might be up and the economy weakening. Thankfully, things rallied and calmed a little by the end of the week, offering some hope that it was just another blip. Let’s take a further look. 

BTS this week at Propelle

We’ve been juggling holidays, trips to the olympics and childcare this week, with a few team members taking advantage of the weather and summer period. (And speaking of the Olympics, we knew it wasn’t one to be missed as it’s the first to achieve gender parity in athletes competing- with 50% of the approximately 10,500 athletes women!) The team on the ground (those  not currently on holiday) have been continuing the ongoing battle we mentioned last time with the Google Play Store, but there seems to be a solution on the horizon. It’s been a massive help that some Propelle women are Googlers! , We’ve also been knee deep in financial compliance – building an FCA regulated business is not at all easy!

Propelle Upcoming Events

Our next monthly webinar is all about money and sustainability. So think sustainable banking, sustainable pensions and sustainable investing. What does sustainability even mean? Well it’s all about how you can put your money towards good causes whilst you’re also making it work for you. Of the Propelle women we surveyed we found that 95% said they would choose to invest their money inline with the values and beliefs. We have some incredible speakers joining us, including Smera Ashraf, Head of Global Wealth UK at Aviva.

So join us on the 21st of August to take a deeper dive into the world of money and sustainability and see how you might be able to do good with your money, whilst also doing good for yourself!

Last Week’s Major Indexes

Before we dive in…

Indices are lists of major sections of a market. Basically, they give a gauge of the health of a certain financial market. Often when the UK market is strong, the FTSE 100 index (measuring the 100 biggest companies on the London Stock Exchange) will keep moving up. Conversely when markets are bad they fall. You’ll see below the value of the index, as well as how much it changed last week, with a percentage.

FTSE 100 (UK): 8,215.47 +2.58%

S&P 500 (US): 5,344.16 +3.75%

Euro Stoxx 50 (Europe): 4,696.33 +0.45%

Nasdaq (US): 6,745.30 +6.57%

Dow Jones (US): 39,497.54 +1.17%

Source: Yahoo Finance

N.B these figures are accurate for market close on Friday 9th August 2024

Mini Market Deep Dive

Disney announces first ever profits on their streaming services

Disney has had a tough time in recent years, from changing CEOs to a lack of profits on their much awaited streaming service. They announced last week however that their overall profits were back up in the positive, and their streaming services turned the first ever profits, much to the delight of investors. Ending with the small bit of bad news: sales to their parks and resorts are down, which some will fear could be an indication of the lack of spending by consumers at the moment and a reflection on a weaker market sentiment. 

Source: Financial Times

Little Learn of the week

Nonfarm Payrolls

You’ll likely know that Propelle founder Ayesha Ofori is a former wealth adviser from Goldman Sachs (GS). She was telling us recently that in her first week at GS she remembers what she calls a frenzy among the analysts, when the Nonfarm Payroll figures were released. At that time she didn’t know what the fuss was about and wondered why something about “non-farmers” and their “payroll” was such a big deal. Even today, Nonfarm Payroll is still a big deal for markets. Nonfarm payroll sounds pretty abstract and not something that could cause such an intense market drop as it did last week. But oh boy, it did. Here’s why it matters…

Non- Farm Payroll is essentially the amount of individuals employed at any one time in the USA, who don’t work on (you guessed it) farms. Jobs on farms are excluded due to their seasonal and transitory nature skewing the data. Roles in non-profit organisations, private households and active military are also excluded from the figures. It’s an important piece of data because it helps economists and investors to understand the state of employment, and in turn the health of the economy of the USA. If the figures have fallen, it might suggest that unemployment is climbing and therefore the economy is weakening and a recession could be looming. As the US is such a dominant global player in financial markets, a US recession could have impacts globally. Investors would want to watch out for this as it might signify a change in direction for their investments. 

Stat / Chart of the Week

15%

This is how much Bitcoin fell last Monday alone, after a rough weekend on the stock markets. Bitcoin, and other crypto currencies, have always been notoriously volatile but as they have become more widely used, some might fear the ongoing ups and downs that they can deliver to investors, as well as the wider impacts these shocks can have. 

Source: Reuters

Fear & Greed Chart

The Fear & Greed Index is a way to gauge stock market movements and whether stocks are fairly priced. The theory is based on the logic that excessive fear tends to drive down share prices, and too much greed tends to have the opposite effect. It’s made up of seven different indicators that measure some aspect of stock market behaviour. 

This matters to us in the UK because it helps us to understand where general sentiment of the US market sits, which is often closely tied to the movements of other global stock markets, including the UK’s FTSE 100.

The gauge sat at 24, putting us by a whisker, still into the ‘extreme fear’ section. This is mostly due to the big shock in the US markets and has already improved over the week, with the barometer falling as low as 19. 

Source: CNN

Q&A of the week

Where our members ask us any questions they have. Big or small. Complex or not. We’re here to help.

When should I sell my investments- because the markets have fallen!

We get it, we’ve seen the worry from the last week and likely you’ve all felt the worry if you’ve got investments and watched them take a quick trip into the red. We talk a lot about the long term time horizon and how important it is to think about investing as something that lasts 5 years or longer, but we don’t often talk about the moments when you should sell. Truth is, a lot of the answer is ‘it depends’. Firstly, it depends on the type of investing strategy you have. If you’re going more passive with the likes of funds, a lot of the selling decisions are made for you, so it’s likely you personally dont have to do anything. You might then only sell a fund when reaching goals or looking to diversify or rebalance very overweight investments. If you’re a more active investor, it will depend on the strategy you’ve chosen. Some investors will track charts and data to identify specific selling moments, whilst others will keep a close eye on earnings reports and their profits. We mostly follow fund based strategies here at Propelle to keep things simple (don’t complicate things if you don’t have to) and keep the worry levels in tougher market times much lower! (With actively managed funds, there are experts monitoring the goings on and they’re likely more experienced to make those tough calls if they’re needed). 

What to look out for in financial markets next week

Below we list announcements for public companies (if you’ve invested in them you might want to keep an eye on what they’re up to) and key economic dates that may affect your investments. 

Wednesday 14th: US CPI– the US’ inflation reading, which might give some indication as to how quickly they’re going to lower their interest rates

Thursday 15th: UK GDP– this shows how much the economy has grown 

It’s a relatively quiet week for companies’ earnings but a big one for economic announcements that could affect investments once again depending on their positivity. 

Source: Nasdaq

Keep an eye out for next week’s update and we’ll dive into more key terms and info we think you should be on top of.

Full Source List: 

Yahoo Finance (Stats),Reuters, Financial Times , Nasdaq