Quo vadis mercatus?!

The past month was the best month for American trading floors in over 30 years. The S&P500 gained 6.7% over that time, while the Nasdaq Comp. as much as 7.8%! Technology company valuations have been increasing at a surprising pace since the outset of the pandemic. An example is Tesla which market value has increased fivefold since March 18, thus causing its founder (Elon Musk) to join a small group of centimillionaire (in the company of Jeff Bezos, Bill Gates and Mark Zuckerberg).

The previous week provided a lot of excitement for investors. In the equity markets, Thursday and Friday were a sell-off sessions. Market commentators cannot find a clear answer for question why the trading floors have turned red at the moment. The macroeconomic data from the US did not give any reasons for this. Industry sentiment has improved once again, and data from labor market sign a further recovery of the economy (already more than half of those laid off due to COVID-19 have found work again). The unemployment rate in August in the United States fell from 10.2% to 8.4%, and the hourly earnings increased by 0.4% MoM.

Last week’s macro data from Europe could not boast of results like their American equivalents. There is a difference in the PMI (services): the German and French economies are much better at rebuilding economic activity than the Spanish or Italian (August PMI around 48). Retail sales in the euro zone fell by 5.3% MoM (against the consensus of a 1% increase). The July rebound in demand resulted from entering the deferred consumption mode. What further sales will look like will depend on the mood of consumers, or rather their concerns about the autumn development of the pandemic. In this context, it is worth mentioning that in Europe we are seeing increases in the daily incidence exceeding the maximum daily new cases from the peak of the spring wave.

Today’s session in the Far East ended with gains. It is hard to expect a similar finale after the European session – at noon DAX drops by 1.05%, CAC40 is down by 1.3%, FTSE100 has a slight correction of 0.03%. Against this background, the trading floor at Książęca street- WIG20 at 12 p.m. was 1.46% below the mark. There was no trade in the United States on Monday due to Labor Day.

On the currency market we have been observing a depreciation of the zloty in comparison with the main currencies since Wednesday. The weekly change is PLN 0.80, and at the time of writing this comment (at 12 p.m.) the EURPLN exchange rate is 4.4420. The dollar appreciated against the PLN at the peak last week amounted to PLN 0.02, and the current rate is 3.7660. Similar depreciation movements of the PLN could also be observed with the Swiss franc (current rate: 4.0980) and the British pound (rate: 4.9180).

This week we will not know any specific macroeconomic data. The most important point will be the speech of Christine Lagarde, the head of the ECB, on Thursday.