Volatility was the name of the game in the FX and equity markets in August – Month in Review: August 2024
Macroeconomic Environment Review
The foreign exchange market experienced significant volatility in August, primarily driven by the sharp decline in the USD/JPY pair. Shifting expectations regarding central bank policies, coupled with concerns about the US economy and corporate earnings, fueled the market’s movement. The decline in USD/JPY had a ripple effect across Asian currencies, leading to substantial losses for the US dollar against the Chinese yuan, Singapore dollar, and other regional currencies. In other regions, the euro, British pound, Canadian dollar, and Australian dollar all appreciated against the US dollar, reaching multi-year highs. The potential for further central bank actions in September and the upcoming US presidential election suggests that the market may continue to experience heightened volatility as the year progresses.
The US stock market also experienced a volatile August, initially declining due to weak economic data and concerns about a potential recession. Job growth slowed, manufacturing activity contracted, and investors feared that the Federal Reserve might have delayed interest rate cuts. However, later data, such as stronger retail sales, eased these concerns. Federal Reserve Chair Jerome Powell’s speech at Jackson Hole suggested that the central bank would cautiously approach interest rate cuts, considering the state of the labor market. This hinted at a potential 50 basis point rate cut in September. Despite the initial volatility, the S&P 500 finished the month with gains, driven by sectors like consumer staples, real estate, and healthcare.
Monthly Performance Review
During August 2024, AENAON Systematic Strategies generated the following total returns:
Across the spectrum of our benchmark indices, our strategies’ performance during August was mildly negative. As a comparison, the US S&P 500 equities index gained 2.28%, the Barclay Hedge Fund Index posted a 0.81% advance, the Barclay CTA Index lost -0.65% while the other benchmark indices can be seen on the chart below.
Chart 1: Monthly Performance vs. Benchmark Indices – August 2024
Charts 2, 3 and 4: Inception-to-Date Performance vs. Benchmark Indices
You can always review our updated factsheets at the following Fundpeak links, with monthly performance updates and statistics since inception:
