Market Radar 21. August 2023

Seasonal recommendation: You can restart from October

At the beginning of this market radar, we want to look at the seasonality of the US stock markets in the context of the Jackson Hole meeting in a pre-election year – specifically for the Nasdaq 100. Außerdem wagen wir einen Vergleich von Adyen und Nvidia und wollen herausfinden, ob sich auch Nvidia infolge der am kommenden Mittwoch angekündigten Ergebnisse zu den Quartalszahlen im Kurs halbieren könnte.

August is historically the trading month with the lowest trading turnover on Wall Street. But the closer you look, the more loudly the statistics contradict your own result. Although August is not over yet, we can see a significantly higher trading volume this year than in July. And that, statistically speaking, is systematic.

Thus, the statistics do not contradict themselves, but they read differently in each case: it depends – as in real life – on the eye of the beholder or the section that the user of the statistics cuts out of the overall view.

Let’s take a look at the August dance for the Nasdaq 100 for the last ten years.
In the past ten years, we have only seen a significantly higher trading volume for the Nasdaq 100 than in July twice: in 2015 and 2019.

In August 2015, the trading volume was 1.6 times higher than in July 2015.
In August 2019, the trading volume was also 1.6 times higher than in July 2019.

Although the month of August still has nine trading days to go on Wall Street – today is only August 21 – the trading volume is now about 1.1 times higher than in July.
So it is quite possible that on August 31 we will again see a trading volume that is 1.6 times higher than in July.

The long flanges in the candlestick chart for August 2015 and 2019 are striking. So prices rose towards the end of the month, whereas they had previously fallen in August. This raises the question for the next two trading weeks: Will we see such a long fuse in the Nasdaq 100 again in the monthly candle for August 2023?

Of course, long-time stock market participants notice something else: namely, that we evaluate a four-year cycle with the years 2015, 2019 and 2023. 2015, 2019 and 2023 are also the primary year for the US presidential election.

Do we perhaps see in the calendar a reason why the last days of August were more positive than the previous days of August?

In 2015, the Jackson Hole meeting began on Friday, August 28.
In 2019, the Jackson Hole meeting began on Friday, August 23.

This year, the Jackson Hole meeting will begin on Friday, August 25.

On the day of the Jackson Hole meeting on August 28, 2015, the Nasdaq 100 barely moved. However, the Nasdaq lost more than 10% in three trading days from August 20 to 24, 2015. So we saw a crash-like sell-off in the Nasdaq 100 in the trading week that ended with the start of the Jackson Hole meeting.

On the day of the Jackson Hole meeting on August 23, 2019, the Nasdaq 100 lost over 3% in value. At that time, Jackson Powell, in his speech for the central bank meeting in Jackson Hole, did not bow to the demands of then-US President Donald Trump to hold out the prospect of interest rate cuts in the near future, at least verbally. Donald Trump wrote on Twitter at the time: “My only question is: Who is the greatest enemy of the people, Jay Powell or China’s Chairman Xi Jinping?”.

If there is a crash-like move in the Nasdaq 100 this trading week or if it occurs on the day of Jackson Powell’s speech on August 25, then we can understand this sell-off as a first, but ultimately still somewhat premature, invitation to buy.