InvestMacro

By JustMarkets

The Dow Jones Index (US30) fell by 1.29% yesterday, while the S&P 500 Index (US500) went down 0.78%. The NASDAQ Technology Index (US100) closed negative 0.70%. Stocks initially opened higher on Thursday, with the Dow Jones Industrials Index (US30) setting a new record high amid a rebound in chip maker stocks after Taiwan Semiconductor Manufacturing Co, a supplier of chips to Apple (AAPL) and Nvidia (NVDA), reported better-than-expected second-quarter results and raised revenue growth estimates for 2024. But by the end of the trading day, stock indices gave up their early gains and retreated, with the S&P 500 (US500) posting a two-week low and the Nasdaq 100 (US100) falling to a three-week low. Falling shares of technology companies and large-cap banks weighed on the overall market.

Dovish comments from Chicago Fed President Goolsbee supported stocks yesterday when he said the Fed may have to cut interest rates soon to avoid a sharp deterioration in a labor market that has been cooling in recent months. Weekly US initial jobless claims rose by 20,000 to 243,000, indicating a weaker labor market than expectations of 229,000.

Equity markets in Europe traded mixed on Thursday. Germany’s DAX (DE40) decreased by 0.45%, France’s CAC 40 (FR40) closed up 0.21%, Spain’s IBEX 35 (ES35) was up 0.38%, and the UK’s FTSE 100 (UK100) closed positive 0.21%.

German producer prices fell by 1.6% y/y in June 2024, softer than the 2.2% decline in the previous month and in line with market estimates. This is the 12th consecutive month of producer price deflation, but the softest on record, amid falling energy prices (-5.9%), particularly natural gas (-14.8%) and electricity (-11.0%). UK retail sales in June 2024 declined 1.2% on the previous month, following a 2.9% rise in May, worse than market prognoses expecting a 0.4% drop.

On Friday, WTI crude oil prices fell to $82 per barrel, extending losses from the previous session, driven by a broad sell-off in risk assets and a stronger US dollar. On Thursday, US stocks and commodities declined and the dollar recovered as investors took a more cautious stance in assessing the global economic outlook.

The US natural gas prices (XNGUSD) rose more than 3.5% to above $2.1 per mmbbl, rebounding from a 10-week low after the EIA reported a smaller-than-expected injection into storage. The US utilities added 10 billion cubic feet (Bcf) of gas to storage last week, below the expected 28 Bcf increase, bringing total inventories to 3,209 Bcf, 16.9% above the 5-year average.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) was down 2.36%, China’s FTSE China A50 (CHA50) was up 0.46%, Hong Kong’s Hang Seng (HK50) was up 0.22% and Australia’s ASX 200 (AU200) was negative 0.27%.

A growing number of economists are pushing back the timing of interest rate cuts to the RBNZ’s August meeting. Earlier in the week, data emerged that the country’s annual inflation rate fell to a three-year low of 3.3% in the second quarter, down from 4% in the previous period. This spurred expectations of three rate cuts by the Reserve Bank of New Zealand, with markets estimating an overall rate easing of 70 basis points before the end of the year.

The increase in Australian jobs in June points to a tight labor market, adding to concerns about a possible interest rate hike by the Reserve Bank of Australia (RBA). However, the unemployment rate rose to 4.1% from 4%. The probability of a rate hike by the Central Bank in August now stands at 20%, up from 12% earlier this week. The RBA is also expected to ease policy much later than other major central banks. Against the kiwi, the Australian dollar is set to rise for a fifth consecutive week amid growing divergence in the monetary policy outlook between New Zealand and Australia.

According to preliminary data, Malaysia’s economy grew to an annualized rate of 5.8% in Q2 2024, significantly higher than the growth of 4.2% in Q1. This was the highest GDP growth since Q4 2022, helped by expansion in all sectors. The services sector accelerated (5.6% vs. 4.7% in Q1), aided by wholesale and retail trade.

S&P 500 (US500) 5,544.59 −43.68 (−0.78%)

Dow Jones (US30) 40,665.02 −533.06 (−1.29%)

DAX (DE40) 18,354.76 −82.54 (−0.45%)

FTSE 100 (UK100) 8,204.89 +17.43 (+0.21%)

USD Index 104.19 +0.45 (+0.43%)

• – Japan National Core Consumer Price Index at 02:30 (GMT+3);
• – UK Retail Sales (m/m) at 09:00 (GMT+3);
• – German Producer Price Index (m/m) at 09:00 (GMT+3);
• – Canada Retail Sales  (m/m) at 15:30 (GMT+3);
• – US FOMC Willaams Speaks at 17:40 (GMT+3);
• – US FOMC Bostic Speaks at 19:45 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

Stock indices traded mixed on Wednesday, with the Dow Jones Industrials (US30) setting a new record high and the Nasdaq 100 (US100) falling to a two-week low. The Dow Jones Industrials (US30) Index gained 0.59%, while the S&P 500 (US500) Index fell by 1.39%. The NASDAQ Technology Index (US100) closed negative 2.77%. Positive corporate news boosted the broad market on Tuesday. Stock declines in chip companies and technology mega-companies negatively impacted the broader market. Nvidia stock fell by 7%, Qualcomm and AMD lost 8%, ARM fell nearly 10%, and ASML’s ADR decreased by 11%. In addition, larger technology stocks, Apple and Microsoft, lost more than 2% each. Shares of chip companies declined on concerns that the US may adopt tougher restrictions on Chinese trade and semiconductor technology. Bloomberg reported Wednesday that the Biden administration has told allies it is considering the toughest trade restrictions against chipmakers if they continue to give China access to advanced semiconductor technology.

Equity markets in Europe traded mixed on Wednesday. Germany’s DAX (DE40) was down 0.44%, France’s CAC 40 (FR40) closed down 0.12%, Spain’s IBEX 35 (ES35) was up 0.13%, and the UK’s FTSE 100 (UK100) closed positive 0.28%. European stocks have been suffering heavy losses for the past 2 sessions, as chip stocks have been under pressure due to reports that the US is considering tightening restrictions on chip exports to China. Donald Trump’s comments about Taiwan having to pay the US for defense also added to geopolitical concerns in the sector.

The UK labor market report was mixed. In the three months to May 2024, the number of people employed in the United Kingdom rose by 19,000 after falling by 139,000 in the previous period and exceeded market estimates. This marked the first rise in job creation in the three months to December 2023. Average weekly earnings, including bonuses in the UK for the three months to May 2024, rose 5.7% year-on-year to £689 a week, down 5.9% in each of the previous two periods and in line with estimates of 5.7%.

WTI crude oil prices climbed above $83 a barrel on Thursday, extending gains from the previous session, thanks to a larger-than-expected drawdown in US crude inventories. According to the EIA, the US crude oil inventories fell by 4.87 million barrels in the week ended July 12, marking the third straight week of decline and exceeding the market estimates for a 0.8 million barrel decline. It is the longest stretch of inventory declines since September.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) was down 0.43%, China’s FTSE China A50 (CHA50) added 0.46%, Hong Kong’s Hang Seng (HK50) was up 0.06% and Australia’s ASX 200 (AU200) was positive 0.73%.

Australia added more jobs than expected in June amid strong job openings and a high participation rate, although the unemployment rate rose to 4.1% from 4%. The Reserve Bank of Australia is expected to keep interest rates unchanged in August. Still, some traders continue to bet on another rate hike amid persistent inflationary pressures and a tight labor market. The RBA is also expected to ease policy much later than other major central banks.

S&P 500 (US500) 5,588.27 −78.93 (−1.39%)

Dow Jones (US30) 41,198.08 +243.60 (+0.59%)

DAX (DE40) 18,437.30 −80.73 (−0.44%)

FTSE 100 (UK100) 8,187.46 +22.56 (+0.28%)

USD Index 103.74 −0.53 (−0.51%)

• – Japan Trade Balance (m/m) at 02:50 (GMT+3);
• – Australia Unemployment Rate (m/m) at 04:30 (GMT+3);
• – UK Average Earnings Index (m/m) at 09:00 (GMT+3);
• – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
• – UK Unemployment Rate (m/m) at 09:00 (GMT+3);
• – Eurozone ECB Interest Rate Decision at 15:15 (GMT+3);
• – Eurozone Monetary Policy Statement at 15:15 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – Eurozone ECB Press Conference at 15:45 (GMT+3);
• – Eurozone President Lagarde Speaks (m/m) at 17:15 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

Stock indices closed higher on Tuesday, with the S&P 500 and Dow Jones Industrials setting new all-time highs. The Dow Jones Index (US30) gained 1.85%, while the S&P 500 Index (US500) rose by 0.64%. The NASDAQ Technology Index (US100) closed positively, 0.20%. Positive corporate news boosted the broad market on Tuesday.

Bank of America (BAC) closed higher by more than 5% after reporting a second-quarter net interest income of $13.86 billion, better than the consensus of $13.81 billion, and estimating fourth-quarter net interest income of $14.50 billion, above consensus of $14.33 billion. Morgan Stanley (MS) closed higher by more than 1% after reporting second-quarter net sales of $15.0 billion, above the consensus expectation of $14.27 billion.

US retail sales for June were unchanged m/m, stronger than expectations for a 0.3% m/m decline. Additionally, June retail sales excluding autos rose 0.4% m/m, stronger than expectations of 0.1% m/m.

Bitcoin (BTC/USD) climbed above the $65,000 mark, hitting its highest level in nearly a month amid renewed bullish sentiment toward digital assets. Data showed that daily net inflows into 11 US spot bitcoin ETFs totaled $422.67 million on July 16, the highest since June 5 and extending the positive momentum to eight consecutive days.

Equity markets in Europe were mostly down on Tuesday. Germany’s DAX (DE40) fell by 0.39%, France’s CAC 40 (FR40) closed down 0.69%, Spain’s IBEX 35 (ES35) lost 0.47%, and the UK’s FTSE 100 (UK100) closed negative 0.22%.

The UK’s annualized inflation rate for June 2024 was 2%, the same as in May and at the 2021 low, although market estimates pointed to 1.9%. The annual rate of core inflation in the UK in June 2024 was 3.5%, holding steady for the second consecutive month and at its lowest level since October 2021. The data matched market estimates, with the annualized CPI services rate at 5.7% for the second consecutive month.

WTI crude oil prices hovered near $80.8 a barrel on Wednesday, trying to break a four-day slide as lingering demand concerns in top consumer China were offset by a decline in US inventories. China’s second-quarter GDP growth and June retail sales came in below expectations, dragged down by the ongoing real estate market crisis and job insecurity. Meanwhile, the IMF estimates moderate global economic growth over the next two years, including a slowdown in the US, stabilization in Europe, and increased consumption and exports in China.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) rose by 20%, China’s FTSE China A50 (CHA50) gained 0.10%, Hong Kong’s Hang Seng (HK50) fell by 1.60% and Australia’s ASX 200 (AU200) was negative 0.23%. On Tuesday, China’s Central Bank injected the largest amount of cash into the Chinese banking system since January to offset the impact of the tax season and maintain ample liquidity. That will support Chinese indices.

The offshore yuan settled at 7.285 per dollar, holding near a one-week low as investors digested Chinese President Xi Jinping’s recent speech at the Third Plenum. Xi urged the Communist Party to maintain “unwavering faith and commitment” to its strategic program amid a challenging domestic and international environment characterized by sluggish economic growth and geopolitical tensions. He also emphasized that Beijing intends to prioritize technology, advanced manufacturing, and other critical sectors necessary for China’s long-term sustainability.

The New Zealand dollar rose to $0.606 on the back of inflation data. New Zealand’s annual inflation rate slowed to 3.3% in the second quarter, the lowest in three years, from 4% in the previous period. However, the latest figure remains outside the Reserve Bank’s target range of 1–3%. The Central Bank expects inflation to return to the target range later this year and will only consider cutting rates once it is satisfied that inflation will remain within that range.

S&P 500 (US500) 5,667.20 +35.98 (+0.64%)

Dow Jones (US30) 40,954.48 +742.76 (+1.85%)

DAX (DE40) 18,518.03 −72.86 (−0.39%)

FTSE 100 (UK100) 8,164.90 −18.06 (−0.22%)

USD Index 104.24 +0.05 (+0.05%)

• – New Zealand Consumer Price Index (m/m) at 01:45 (GMT+3).
• – UK Consumer Price Index (m/m) at 09:00 (GMT+3);
• – UK Producer Price Index (m/m) at 09:00 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – US Industrial Production (m/m) at 16:15 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

At Monday’s close, the Dow Jones (US30) Index was up 0.53%, while the S&P 500 (US500) Index was up 0.28%. The NASDAQ Technology Index (US100) closed positive 0.40% yesterday. The Russell 2000 Index also gained 1.8% as investors continued to refocus on small-company stocks. The energy, financials, and industrial sectors outperformed the market, while utilities, consumer staples, and healthcare stocks were the biggest fallers. Federal Reserve Chairman Jerome Powell said yesterday that the central bank won’t wait until inflation reaches 2 percent before cutting interest rates because it operates with “long and variable lags.” That raised the likelihood of the first-rate cut in September, which is a positive for indices. Investors are now awaiting Tuesday’s US retail sales data and Fed officials’ comments for more clues on the future course of monetary policy. Markets have already all but priced in September’s rate cut, with two more cuts expected before the end of the year.

The Bank of Canada’s Business Outlook Survey emphasized continued pessimism among Canadian companies, attributing it to weak sales expectations and high equipment costs holding back investment. In addition, Canada’s unemployment rate rose in June to its highest level since January 2022, accompanied by an unexpected 1.4k jobs decline versus an expected 22.5k increase, adding to the Bank of Canada’s concerns about the impact of higher interest rates on the labor market.

Bitcoin (BTC/USD) surged to $65,000 on Tuesday, hitting its highest level in nearly a month, as US presidential candidate Donald Trump picked Sen. J.D. Vance as his running mate. The Ohio Republican said he owns more than $100,000 worth of bitcoin and has been critical of regulatory actions taken by the US Securities and Exchange Commission (ІSEC) against the crypto industry. Bitcoin has risen more than 10% since Friday, helped largely by the prospect of a second Trump presidency.

Equity markets in Europe were mostly down on Monday. Germany’s DAX (DE40) fell by 0.84%, France’s CAC 40 (FR40) closed down 1.19%, Spain’s IBEX 35 (ES35) lost 0.96%, and the UK’s FTSE 100 (UK100) closed negative 0.85%. Disappointing economic data from China, negative corporate news, and quarterly results dampened investor sentiment.

WTI crude oil prices fell to $81.5 a barrel on Tuesday, declining for the third consecutive session. Demand uncertainty in top consumer China and a rising dollar pressured oil prices. Data released Monday showed China’s oil imports fell month-on-month and year-on-year to 46.45 million tons in June amid weak domestic demand.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) was not trading yesterday, China’s FTSE China A50 (CHA50) added 0.36%, Hong Kong’s Hang Seng (HK50) was down 1.52% and Australia’s ASX 200 (AU200) was positive 0.73%.

Hong Kong stocks fell by 1.3% in Tuesday morning trading, declining for a second day and moving away from their highest level in 3 weeks amid a retreat in all sectors. Disappointingly, Q2 Chinese GDP data continued to weigh on sentiment. Meanwhile, Goldman Sachs cut China’s 2024 GDP forecast to 4.9% from 5%, and JPMorgan cut its forecast to 4.7% from 5.2%. Investors’ attention turns to the Third Plenum, a high-level leadership conference scheduled for July 15-18, where they will await policy decisions. However, the focus is expected to be long-term economic and social issues.

The Australian dollar will remain positive against other currencies as the Reserve Bank of Australia (RBA) is expected to ease policy much later than other major central banks. Due to ongoing domestic inflationary pressures, markets are also looking at the possibility of another rate hike by the RBA this year. Investors are now awaiting Australian employment data later this week to gauge the state of the labor market.

The New Zealand dollar fell to $0.605, at its lowest level in two weeks, as investors await second-quarter inflation data that could influence the Reserve Bank of New Zealand’s (RBNZ) policy trajectory. Economists expect New Zealand’s consumer inflation to slow to 3.5 percent in the second quarter, the lowest rate on record.

S&P 500 (US500) 5,631.22 +15.87 (+0.28%)

Dow Jones (US30) 40,211.72 +210.82 (+0.53%)

DAX (DE40) 18,590.89 −157.29 (−0.84%)

FTSE 100 (UK100) 8,182.96 −69.95 (−0.85%)

USD Index 104.26 +0.17 (+0.16%)

• – German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – Eurozone Trade Balance (m/m) at 12:00 (GMT+3);
• – US Retail Sales (m/m) at 15:30 (GMT+3);
• – Canada Consumer Price Index (m/m) at 15:30 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

At Thursday’s close, the Dow Jones Index (US30) was up 0.08%, while the S&P 500 Index (US500) decreased by 0.88%. The NASDAQ Technology Index (US100) closed negative 1.95%. Stocks found early support on Thursday on the Fed’s favorable June US CPI report, which lowered bond yields and reinforced speculation that the Fed could cut interest rates this year. However, a rotation out of technology stocks on Thursday pulled the S&P 500 away from a new record high and pressured the broader market. Shares of Tesla (TSLA) fell more than 8%, putting pressure on tech stocks after it postponed its robot cab unveiling to October.

June US CPI declined to 3.0% y/y from 3.3% y/y in May, better than expectations of 3.1% y/y. June CPI, excluding food and energy, declined to a 3-year low of 3.3% y/y from 3.4% y/y in May, which was better than expectations of no change at 3.4% y/y. US weekly initial jobless claims fell by 17,000 to a 6-week low of 222,000, indicating a stronger labor market than expectations of 235,000. The trade surplus with the US increased to $31.78 billion in June from $30.81 billion in the previous month. In the first half of 2024, the surplus totaled $435 billion, with exports rising 3.6% to $1.71 trillion and imports increasing 2.0% to $1.27 trillion. Markets rate the odds of a 25 bps rate cut at 9% for the next FOMC meeting on July 30–31 and 93% for the September 17–18 meeting.

The Canadian dollar strengthened to 1.36 per US dollar in July, hitting an eight-week high. This was due to a weaker dollar after a decline in US inflation boosted bets that the Fed would cut rates in September. These developments balanced the outlook for the Fed and the Bank of Canada. Canada’s macroeconomic backdrop also supports bets that the Bank of Canada will continue to lower borrowing costs.

Equity markets in Europe were mostly up on Thursday. Germany’s DAX (DE40) rose by 0.69%, France’s CAC 40 (FR40) closed higher by 0.71%, Spain’s IBEX 35 (ES35) climbed 0.89%, and the UK’s FTSE 100 (UK100) closed positive 0.36%.

WTI crude oil prices rose to 82.9 dollars per barrel on Friday, rising for the third consecutive session amid positive market sentiment following the release of lower-than-expected inflation data in the United States, the world’s largest oil consumer. The June slowdown in US consumer price growth boosted expectations of a Federal Reserve rate cut, with traders now estimating the probability of a rate cut in September at 93%, up from 73% on Wednesday. In addition, signs of strong summer demand are supporting oil prices.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) gained 0.94%, China’s FTSE China A50 (CHA50) added 0.55%, Hong Kong’s Hang Seng (HK50) jumped 2.06%, and Australia’s ASX 200 (AU200) was positive 0.93%.

Japan’s 10-year government bond yield fell to around 1.05%, hitting a two-week low, as investors reassessed the Bank of Japan’s monetary policy outlook in light of the yen’s surge. On July 11, the yen rose 2.6% to 157.42 per dollar, which traders attributed to likely government intervention. The Bank of Japan is under pressure to raise interest rates again in July to defend its currency and narrow the gap between domestic and foreign yields. The Central Bank is also expected to announce its plans to reduce bond purchases this month after it met with market participants this week to determine the actual pace of bond buying cuts.

China’s trade surplus in June 2024 rose to 99.05 billion US dollars from 69.80 billion US dollars in the same period a year earlier, beating market expectations of 85 billion US dollars. It was the biggest trade surplus since July 2022, as exports rose and imports fell. Exports rose by 8.6% from a year earlier, the fastest pace in 15 months and beating estimates for 8% growth, while imports unexpectedly fell 2.3%, missing estimates for 2.8% growth and after rising 1.8% in May.

Singapore’s economy grew at a 2.9% annualized rate in the second quarter of 2024, beating market estimates that expected 2.7% growth. The preliminary estimate also followed an upwardly revised 3% growth in the previous quarter, the fastest growth rate in a year and a half.

S&P 500 (US500) 5,584.54 −49.37 (−0.88%)

Dow Jones (US30) 39,753.75 +32.39 (+0.082%)

DAX (DE40) 18,534.56 +127.34 (+0.69%)

FTSE 100 (UK100) 8,223.34 +29.83 (+0.36%)

USD Index 105.01 −0.12 (−0.11%)

• – China Trade Balance (m/m) at 06:00 (GMT+3);
• – US Producer Price Index (m/m) at 15:30 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By Murray Gunn | Global Rates & Money Flows editor

I have spent much of my career among professional traders. By nature, traders are a betting crowd; if they can’t bet on the markets, they’ll bet on something else.

A monthly highlight on trading floors was always the ‘NFP Sweepstake,’ where everyone would pay some money to guess what the U.S. Non-Farm Payroll (NFP) number would be. The winner, who would take the whole pot, was the guess that came closest to the actual number. A good strategy, therefore, would be to try and be either the highest or lowest number because, sometimes, NFPs do surprise.

That was the case last month when NFPs came in showing that 272,000 jobs were added in May compared with a consensus forecast of 185,000. Momentum in the U.S. labor market is waning, though. From January 2021 to December 2022 the average NFP number was 490,000 jobs added each month. From January 2023, the monthly average has halved to 241,000. The unemployment rate has increased from 3.4% in April 2023 to 4.1% now and jobless claims are rising.

The chart above shows annualized percentage change in those in the U.S. engaged in full-time employment. Full-time employment has been shrinking on an annualized basis since February this year, and you can see that every one of the eight recessions (the shaded areas on the chart) since 1970 has been accompanied by a negative reading. On three occasions, this metric has dipped into negative territory without a recession occurring.

I’m no expert bookie, but it seems to me that those odds tilt towards favoring a recession. What do you think?

The U.S. jobs market remains the most important economic variable on the planet given the importance of the U.S. consumer to economic activity. Regardless of where in the world you live or invest, staying ahead of the trends in the U.S. stock market and economy is worth your while. Elliott Wave International has a free must-read issue on U.S stocks that I suggest you check out, on www.elliottwave.com.

By JustMarkets

At the end of Wednesday, the Dow Jones Index (US30) rose by 1.09%, and the S&P 500 Index (US500) gained 1.02%. The NASDAQ Technology Index (US100) closed yesterday 1.18% positive. The S&P 500 and Nasdaq 100 indices hit new all-time highs, while the Dow Jones Industrials Index hit a 7-week high. The strength in chip maker stocks led tech stocks and the broader market higher Wednesday after Taiwan Semiconductor Manufacturing Co (TSMC), the sole supplier of cutting-edge chips to Nvidia and Apple, reported better-than-expected second-quarter sales. In addition, Apple shares rose to a record high on news that the company intends to ship 10% more new iPhones this year.

Today, the US will release its inflation report for June. Economists expect consumer inflation to rise 0.1% month-over-month and fall slightly to 3.1% from 3.3% year-over-year. The core rate, which excludes food and energy prices, is expected to be unchanged at 3.4% year-on-year. Economists note that if the June CPI report meets expectations, the Fed will likely start a rate cut cycle in December. This could give the US dollar temporary confidence. At the same time, economists note that any downward deviation of the index (especially the core index) by more than 0.2% will sharply increase the probability of the first rate cut in September, especially given the recent weak economic data. A further slowdown in inflation could convince more market participants to bet on two Fed rate cuts by December. Such a situation would pressure the US dollar but send a green signal for precious metals and stock indices.

Equity markets in Europe were mostly down on Wednesday. Germany’s DAX (DE40) rose by 0.94%, France’s CAC 40 (FR40) closed higher by 0.86%, Spain’s IBEX 35 (ES35) climbed 1.59%, and the UK’s FTSE 100 (UK100) closed positive 0.66%.

Germany’s annualized inflation rate for June 2024 eased to 2.2%, down from 2.4% in the previous month, in line with preliminary estimates. Commodity prices slowed (0.8% vs. 1% in May), while energy costs declined faster (-2.1% vs. -1.1%). Looking at the consumer price index harmonized across EU countries, the annual rate fell to 2.5% from 2.8%, and the monthly rate was 0.2%, unchanged from May.

The UK economy grew by 0.4% month-on-month in May 2024 after stagnating in April. Construction grew at the fastest pace in almost a year. UK industrial production rose by 0.2% month-on-month in May 2024, recovering from a 0.9% fall in the previous month and matching market expectations. Manufacturing output rebounded (0.4% vs. -1.4% in April).

WTI crude oil prices rose to 82.7 dollars per barrel on Thursday, rising for the second consecutive session thanks to a larger-than-expected decline in US crude inventories. According to the EIA, the US crude oil inventories fell by 3.444 million barrels in the week ended July 5, a larger-than-expected decline of 3.0 million barrels. Gasoline inventories also fell more than expected. In addition, OPEC reaffirmed its forecast for strong growth in global oil demand in 2024. The EIA forecasts global oil demand to reach 104.7 million bpd by 2025, slightly higher than the projected supply of 104.6 million bpd, indicating a future deficit.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) was up 0.61%, China’s FTSE China A50 (CHA50) was down 0.51%, Hong Kong’s Hang Seng (HK50) was down 0.29% for the day, and Australia’s ASX 200 (AU200) was negative 0.16%.

The Australian dollar exchange rate surpassed $0.675, hitting its highest level in six months amid growing expectations that the Reserve Bank of Australia (RBA) may raise interest rate again if inflation picks up. Markets still see a 20% chance of further RBA policy tightening in August while ruling out the possibility of a rate cut this year.

S&P 500 (US500) 5,633.91 +56.93 (+1.02%)

Dow Jones (US30) 39,721.36 +429.39 (+1.09%)

DAX (DE40) 18,407.22 +171.03 (+0.94%)

FTSE 100 (UK100) 8,193.51 +53.70 (+0.66%)

USD Index 105.01 -0.12 (-0.11%)

• – UK GDP (m/m) at 09:00 (GMT+3);
• – UK Industrial Production (m/m) at 09:00 (GMT+3);
• – UK Manufacturing Production (m/m) at 09:00 (GMT+3);
• – UK Trade Balance (m/m) at 09:00 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
• – US FOMC Member Bostic Speaks at 18:30 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.