August 28, 2023
United States:
US Growth Stocks Trade Is Crowded and Overvalued, Says RBC
The trade in US large-cap growth stocks looks problematic due to crowded positioning and lofty valuations, according to RBC Capital Markets strategist Lori Calvasina.
While poised for the biggest monthly decline so far this year, the Nasdaq 100 is still up 37% in 2023, buoyed by optimism about artificial intelligence developments and hopes that interest rates would peak soon. Growth valuations remain well above their long-term average, Calvasina wrote in a research note.
Europe:
Lagarde Policy Silence Keeps ECB Interest-Rate Debate Raging
Christine Lagarde’s avoidance of a clear signal of intent for European Central Bank policy has just thrown a brighter spotlight on a pivotal week in the euro zone.
While the president observed on Friday that inflation remains undefeated, she didn’t address prospects for the Sept. 14 meeting, giving colleagues scope to publicly debate the need for increasing borrowing costs just as crucial data arrive in coming days.
Asia:
Markets Show China Needs a Stimulus ‘Bazooka’ to Woo Investors
Chinese stocks started Monday by surging after authorities took a raft of steps to bring investors back to one of the world’s worst-performing equity markets. But most of the gains were gone by the end of the session, with foreign funds extending what’s set to be a record outflow this month.
The price action illustrated once again how China’s efforts to boost its markets are struggling in the face of economic worries. Data Sunday showed industrial profits slid 6.7% in July from a year ago, adding to signs that the recovery lost further momentum. While calls for broad stimulus are mounting, authorities have held back given their determination to shift away from the debt-fueled growth model.
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