US STOCKS: S&P(ESZ5) - Tops Out Around 6750, Do Seasonals Finally Kick In ?

On Friday, the standout remained continued outflows from Taiwan equities. Offshore investors sold a further $684mn in local stocks. This bought outflows in the past 5 trading days to over $4bn. It also nearly wipes outs Taiwan's 2025 year to date inflows. Taiwan equities finished last week softer, down 0.82% on Friday, but the US lead is positive to start this week. The SOX rose 2.70% on Friday, while the MSCI IT index gained 1.45%, amid broad based equity market gains in the aftermath of Powell's dovish Jackson Hole speech. This may may stabilize Taiwan market sentiment, with the Taiex struggling to hold above 24000 through the tail end of last week. 

• South Korea inflows were positive on Friday, but this still left a net outflow position for the past 5 trading days. South Korea leader Lee is in the US for a leader's summit with US President Trump at the start of this week.
• The other focus point for tech sensitive plays will be earnings from chip/AI bellwether Nvidia in the US this week.
• In South East Asia, we finally saw an inflow day for Malaysia on Friday, the first since the 24th of July.
• Inflows continued into Indonesia, but Thailand outflow pressures persisted. Outside of Taiwan, Thailand has the weakest flow backdrop for last week within the region. 

Table 1: Asian Markets Net Equity Flows 

Source: Bloomberg Finance L.P/MNI 

Q2 real retail sales were a lot stronger than expected rising 0.5% q/q after 0.8%. This was the fourth consecutive non-negative quarter bringing annual growth to 2.3% y/y from 0.7% and the sector now appears to be recovering. There will be manufacturing, trade and building volumes released before GDP prints on September 18. 

• Nominal retail sales rose 0.1% q/q to be up 2.5% y/y after 1.5% q/q & 1.3% y/y in Q1. Therefore lower prices in the quarter supported real expenditure.
• Statistics NZ reported that 8 out of 15 retail sectors saw an increase in sales in Q2 with electronics, supermarkets and pharmaceuticals driving the rise. Clothing & footwear was the weakest with accommodation, fuel, hardware and food & beverage services also seeing lower sales volumes.

NZ retail sales y/y%

In post-Tokyo trade on Friday, JGB futures closed stronger, +10 compared to settlement levels, after US tsys finished near session highs - after gapping higher following Fed Chairman Powell's dovish speech from the Jackson Hole.

• The major near-term policy signal takeaway from Fed Chair Powell's Jackson Hole keynote (link) is that he only acknowledges that "with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance", but also that the risks appear to have shifted since the July meeting ("The balance of risks appears to be shifting"), as "downside risks to employment are rising.
• (Bloomberg) -- "Bank of Japan Governor Kazuo Ueda said he expects a tight labour market to keep upward pressure on wages, reflecting his view that stable inflation is set to take hold. "Wage growth is spreading from large enterprises to small and medium enterprises," Ueda said Saturday." (link) 
• Today, the local calendar will see Coincident/Leading Index and Dept Sales data.