August & September Stock Market Lows
- This week,market attention is split between the largely uneventful summit between U.S.
- The recent meeting in Alaska between President Trump and President Putin failed to produce any concrete agreements regarding the ongoing conflict in Ukraine.
- Despite the lack of tangible outcomes, the meeting concluded on amicable terms, with Putin appearing to secure some diplomatic wins.
Market Watch: Trump-Putin Talks Yield No Breakthroughs,Jackson Hole Symposium Looms
Table of Contents
- Frankfurt,Germany
Key Takeaways: A Quiet Week Ahead
This week,market attention is split between the largely uneventful summit between U.S. President Donald Trump and Russian leader Vladimir Putin, and the upcoming central banker symposium in Jackson Hole, Wyoming. The earnings season is drawing to a close, and analysts are bracing for the historically weaker performance typically seen in August and September.
Trump-Putin Summit: “Much Ado About Nothing”
The recent meeting in Alaska between President Trump and President Putin failed to produce any concrete agreements regarding the ongoing conflict in Ukraine. As Dirk Chlench of LBBW succinctly put it, the summit was “Much Ado About Nothing.” Ukrainian President Zelensky is scheduled to meet with Trump and European representatives this Monday for further discussions. Analysts, including Christoph Geyer, a graphic analysis expert, anticipated little progress, believing the lack of results will not significantly impact equity markets.
Despite the lack of tangible outcomes, the meeting concluded on amicable terms, with Putin appearing to secure some diplomatic wins.
Market Stability, But Caution Advised
Despite the geopolitical backdrop, european and U.S. markets have shown resilience. As of this monday morning, the DAX is holding steady at 24,350 points, remaining within reach of its July high of 24,639. The Stoxx Europe 600 is also nearing record levels. In the U.S., the S&P 500 and Dow Jones have recently achieved new historic highs, with the Nasdaq 100 reaching a peak last Wednesday.
Though, Claudia Windt of Helaba cautions against complacency, describing a “certain summer lightness” that might potentially be misleading. A swift resolution to the Ukraine conflict and a mitigation of U.S.protectionist trade policies appear unlikely. Rising U.S. producer prices suggest that inflationary pressures will soon be passed on to consumers.
Earnings Season Fades, Seasonality Concerns Rise
The corporate earnings season is nearing its end. While 66% of DAX companies exceeded expectations for the second quarter, according to Markus Reinwand of Windt, the trend is more positive in the U.S., where 81% of S&P 500 companies surpassed estimates. However, profit revisions remain largely negative for DAX-listed companies.
Analysts note that the positive impact of accommodative monetary policies is diminishing, particularly given current high valuations in U.S. markets. Reinwand highlights a historical pattern: August and September have historically been the weakest months for both the DAX and S&P 500,with gains recorded in onyl 26 out of the last 65 years.
“The Most Arduous Period of the Year”
According to Geyer, the challenging period for markets has already begun and extends into early October.Without significant positive catalysts, coupled with seasonal headwinds and indicators suggesting potential sales pressure, a sustained rally for the DAX appears unlikely.
Key Economic Data Releases
| Date | event | Details |
|---|---|---|
| Wednesday,August 20 | U.S. Federal reserve Meeting Minutes | The report will be closely watched, particularly given the recent two-to-one split vote favoring a rate cut at the last Fed meeting (according to Helaba). |
| Thursday, August 21 – Saturday, August 23 | Jackson Hole Symposium | Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde will be speaking. The 2022 symposium,where Powell signaled a commitment to fighting inflation even at the cost of economic slowdown,triggered a 3% drop in U.S. equities. |
| Thursday,August 21 | Eurozone PMI Composite Index | Commerzbank anticipates a slight decline in the August index,noting that PMI data has recently outpaced other economic indicators. |