SUNDAY NIGHT MARKETS: Aug. 28-Sept. 4

Collapse of the markets?

This weekend the question on everyone’s lips is: are we facing a collapse?

Let’s go in order.

On Monday, the week began with a good uptick in the markets. Nasdaq still the master for three consecutive days. All this until Wednesday. Then on Thursday the sharp drop in the nasdaq dragged down all the markets, and they closed in the red on Friday as well.

On Thursday we saw the NASDAQ fall very quickly to lose 5.5 percent. The next day with an initial upward feint it went to -5% again and then climbed back up to about -1%.

The week began with the Tesla and Apple split. It was the first day where you could buy Tesla around $450 and apple at $127. Historically the two weeks before the split the stock goes up and even well and then falls in the two weeks after the split occurs.

In this case Tesla and Apple fell together. And when two giants fall, it is clear that the index is affected. Throw in the fear of a bubble (a rumor that has been circulating for some time now) and the bad memory (too close) of the March market crash did the rest. Nasdaq at -6% and generalized panic selling.

Positive data on the U.S. unemployment rate came out on Friday. A 9.8 percent unemployment rate was expected while the figure was 8.4 percent in August. New employment for the month was 1.37 million instead of the expected 1.4 million. Data that can still be read positively. The market, on the other hand, did not curb its downward movement after the news. For two hours he went down continuously except to get back up and go on to make up almost everything in the finale.

So, was this a market crash? Here are the performances of the most important indexes.

As we can see, the NASDAQ this week lost 3.12 percent. A rediculous thing when compared to the run made from April to now, going from 7500 to over 12000.
Yet in thought is the NASDAQ collapse. To see it drop in one day by 6 percent is actually impressive. This quick decline of his erased from his mind that he had grinded out a decent 4% in the previous three days.
The Italian MIB index also in negative -2.27 percent this week. Japan’s NIKKEI went through a positive week(+1.5%) due to the big initial jump after the news of Buffet’s investments in Japanese companies.

Of particular note is the enormous volatility this week, which in fact saw the VIX on the S&P500 rise as much as 33%! We are approaching the election of the American president. Let us prepare for weeks of high volatility.

What happened this week at MIB?

Let’s take a look at our index. As we said, the MIB is still down, although it had given positive signs in the first three days. Then it adjusted to international markets and fell in the last three days. The ECB will meet on the 10th to decide whether to put more money into the market or lower rates below zero. We will see if the decision that is made will give positivity to our index.

Here are this week’s top 10 performance rankings (MIB):

To emphasize that compared to the U.S. markets, the MIB index has not yet recovered from the February-March slump this year due to COVID, here is the overall ranking of the MIB TOP40s since the beginning of the year. Here are the performances:

As we can see only 10 out of 40 stocks are in the positive since the beginning of the year, which is why there remains a MIB that is still struggling to grow. We are waiting for the ECB’s decision and the Italian government’s measures on the economy. Then we will see how the European markets go.

If you want to learn more about split Apple, Tesla, and falling markets listen to our podcast here.