Chapter 1: Overview of Global Financial Markets

In the latest update on financial markets, last Friday marked a significant turnaround for the S&P 500 (SP500), which bounced back from its most challenging week of the year to achieve its strongest performance yet. This was the first instance since June 2022 where the index experienced a drop of over 4% one week and then rallied more than 4% the following week.

Concerns regarding economic growth, stemming from a series of lackluster labor market reports and the typical market downturn in September, had fueled the previous week's selloff. However, a shift in sentiment occurred this week as inflation data reinforced the likelihood of an interest rate cut by the Federal Reserve in the upcoming Wednesday meeting. The primary question now revolves around the magnitude of this cut.

Moreover, Wall Street was abuzz with the second U.S. presidential debate featuring Vice President Kamala Harris and former President Donald Trump. Analysts mostly agreed that Harris emerged victorious in the debate. Throughout the week, the S&P 500 gained 4.0%, the Nasdaq Composite surged 6.0%, and the Dow Jones Industrial Average increased by 2.6%.

The U.S. Dollar Index (DXY), which tracks the dollar's value against a selection of currencies, faced declines on Friday as the market continued to absorb the recent inflation data. By week's end, expectations slightly intensified regarding a potential 50 basis point cut in interest rates by the Federal Reserve.

Technical indicators for the DXY have resumed a downward trend, indicating a shift in momentum. The index has notably dipped below its 20-day Simple Moving Average (SMA), signaling a bearish shift. Additional indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) further validate this downward bias. Given these developments, continued declines for the DXY are anticipated in the near term.

Currently, Bitcoin (BTC) remains relatively steady, having just recovered above the $60K mark after bears briefly attempted to push it down to $59.5K. This marks a positive week for BTC, which has seen its price rise by over 10%. The lack of significant volatility is also evident in the derivatives market, which has recorded fewer liquidations. Similarly, the altcoin market has remained stable, with minor fluctuations in most coins; for instance, ETH has increased by 0.5%, BNB by 0.8%, and SOL by 0.3%, while DOT saw a notable rise of nearly 3%.

The infographic above illustrates the distribution of global debt by sector for both mature and emerging markets in Q1 2024. The figures, represented in trillions of U.S. dollars, originate from the May 2024 Global Debt Monitor published by the Institute of International Finance (IIF).

Chapter 2: Weekly Market Insights and Statistics

As we delve into other key statistics, let’s take a look at the notable market performances over the week and year-to-date figures across various sectors.

Nvidia is on track for an even more remarkable year of acquisitions compared to the previous year. The company is actively investing in startups within the AI sector, further embedding its technology into the ecosystem. Just this month, Nvidia has participated in several funding rounds, including:

• You.com (AI search): $50M Series B
• Arsenal Bio (biotech): $325M Series C
• Wombo (content generation): $9M Series A
• Superliminal Medicines (drug discovery): $120M Series A

The smartphone market has long been dominated by Samsung and Apple, both of which are now enhancing their upcoming devices with generative AI features. The accompanying infographic highlights the leading companies by global smartphone market share, derived from the IDC Worldwide Quarterly Mobile Phone Tracker report.

Additionally, open interest in Ether trading on retail derivatives exchanges decreased by 15.7% in August, dropping to $45.8 billion. This decline was largely attributed to increased liquidations caused by downturns in traditional financial indices and concerns regarding the Japanese Yen carry trade. Binance's open interest fell by 21.4% to $14.6 billion, while OKX and Bybit experienced reductions of 23.1% and 25.0%, leading to their open interests of $4.94 billion and $9.53 billion, respectively.

As we reflect on the productivity of micro, small, and medium-sized enterprises (MSMEs), it’s important to note that while larger companies typically enjoy economies of scale, MSMEs excel in administrative services and hospitality sectors. They maintain productivity levels approximately three-quarters that of larger firms, outperforming those in utilities, manufacturing, and ICT. Their agility and local connections enable them to deliver personalized experiences, appealing to travelers.

Finally, China's electricity demand has surged since the 1990s due to rapid industrialization and urban migration. The accompanying chart illustrates the forecasted electricity demand in China compared to the U.S., EU, and India from 1991 to 2025, measured in terawatt-hours (TWh) based on data from the International Energy Agency (IEA).

In conclusion, while global markets face challenges, there are also significant opportunities driven by innovation and adaptability across various sectors.