This Week
The highlight of the economic week will be US nonfarm payrolls data on September 5, which could provide further cues on the likelihood of Fed rate cuts. Geopolitics is also in focus with Chinese, Russian and Indian leaders among others meeting for the Shanghai Cooperation Summit in China from August 31 – September 1 inclusive. OPEC + will also meet on September 7th to discuss October production levels. Traders will also be focusing on the US September 5th deadline for Russia (and Ukraine) to make progress towards a trade deal. Trump threatened potential “economic war” against Russia if efforts are not made, which include possible sanctions and tariffs which may restrict Russian oil exports further.
Stocks
SNOWFLAKE
Snowflake’s price surged 19.46% to hit a more than three year peak last week after blowout earnings. The AI software company posted better than expected earnings on August 27, with revenue recording over $1.1 billion - up 32% year on year. Growth was fuelled by the adoption of the company’s AI Data Cloud. Analyst sentiment was very positive following the release with Brokerages such as Needham and Cantor Fitzgerald both raising Snowflake’s price target.
EXXON
Exxon’s stock price rose 3.1% to a six week high. The oil company beat earnings expectations in July but more recent catalysts include news that Exxon intends to boost its production in Guyana and the Permian Basin. Last week reports stating that Exxon had confidential talks with Russia’s Rosneft oil company about rejoining the Sakhalin oil and gas project in Russia encouraged positive sentiment. Last week’s increase in oil prices also supported the stock.
Commodities
Crude Oil
Crude oil prices increased 0.44%, with the commodity rising to a two week high after reports suggested that Ukraine continued to curtail Russian oil output due to its attacks on Russian oil refineries. Oil prices were also supported by falling inventories in the US showing that demand remains firm for the commodity. Oil pared some gains late in the week as traders considered OPEC+’s likely production increases at its September 7th meeting.
Gold
Gold prices surged 2.33%, trading not far from the precious metal’s all time high. The metal was sought on a safe haven basis due to President Trump’s move to fire Fed Governor Cook, raising Fed independence concerns. Market data and Fed Chair Powell’s earlier speech at the Jackson Hole symposium also reinforced expectations that the Fed is likely to opt for a rate cut next month and at least one additional cut before the end of the year.
Copper
Copper prices grew 1.1% to reach a one month high last week driven by positive economic data and supply constraints. US GDP growth was revised slightly higher increasing optimism that industrial demand for copper will remain strong in construction and manufacturing. Solid data from China suggested similar sentiment regarding Chinese demand. Important exporter Chile’s Codelco also lowered its copper output guidance for 2025.
AUD/USD
The AUD/USD pair climbed 0.82% to a two week peak as the greenback weakened following Fed Chair Powell’s Jackson Hole speech which signaled a likely rate cut in September. RBA Meeting Minutes for August were more cautious about future rate cuts, supporting the Aussie. Positive data from Australia last week also contributed to the currency’s strength, while broadly rising commodity prices underpinned the commodity linked Australian dollar.
Recap
Last week the S&P 500 decreased 0.1%, the Nasdaq declined 0.2% and the Dow Jones fell 0.2%.
US stock indices hit fresh record highs amid positive data rising increasing expectations of a Fed September rate cut and positive earnings from NVIDIA. President Trump stated he expected moves from Russia and Ukraine towards a peace deal, while Trump also moved to fire Fed Governor Cook for alleged mortgage fraud, although it was unclear whether he had the authority. Crude oil prices hit a two week high and ended the week slightly higher and Natural Gas prices posted a ten day peak. Gold prices ended the week sharply higher, while silver prices also surged as markets priced in rate cuts. Platinum prices finished in the green at a one week high, but palladium ended the week lower.