InvestMacro

By JustMarkets

At Friday’s close, the Dow Jones Index (US30) increased by 0.5% (+0.65% for the week), while the S&P 500 Index (US500) added 0.99% (+0.85% for the week). The NASDAQ Technology Index (US100) closed positive by 1.90% (+1.67% for the week) on Friday.

Core PCE data is the Fed’s preferred inflation gauge. The 0.5% decline from the May reading only reinforced hopes that the Fed has likely ended the current rate hike cycle. Combined with labor costs rising at the slowest pace in two years, this may explain some of the weakness in the US Dollar late last week. There is a lot of US labor market data coming out this week, including the NFP report. This data will provide another snapshot of the state of the US economy. Average hourly earnings will again be a key indicator for the Fed, as strong wage growth has been cited as a problem in the ongoing fight against inflation.

Equity markets in Europe were mostly up on Friday. Germany’s DAX (DE40) rose by 0.39% (+2.13% for the week), France’s CAC 40 (FR40) gained 0.15% (+0.96% for the week), Spain’s IBEX 35 (ES35) declined by 0.09% (+2.86% for the week), and the UK’s FTSE 100 (UK100) closed positive by 0.02% (+0.40%for the week).

This week, the Bank of England will hold a monetary policy meeting on Thursday. Analysts at HSBC expect the Bank of England to maintain a hawkish stance and raise the rate by 50 basis points to 5.50%. At the same time, JP Morgan believes that even though the Bank of England still has a lot of work to do, an increase of 25 basis points is expected.

Interest rate hikes by the US Federal Reserve and the European Central Bank are holding back gold and silver prices. However, Fed Chairman Jerome Powell and ECB President Christine Lagarde were cautious in their press conferences, reinforcing expectations that interest rates are close to peaking. This means that once the US and ECB central banks complete their tightening cycle, precious metals will receive fundamental support. Analysts predict that late 2023 and all of 2024 will be a bullish period for gold and silver on the back of a declining dollar index.

Crude oil prices (WTI and Brent) continued their upward movement. Many factors contributed to this, but primarily the weakening of the US dollar. This week will start with the release of key data from China, the NBS PMI, which is expected to push oil prices higher. In connection with the recent announcement of OPEC+ on the extension of production cuts for August, whether the organization will decide to continue the reduction in September has been raised again. Market experts are inclined to believe that the production cut will continue.

Asian markets grew steadily last week. Japan’s Nikkei 225 (JP225) gained 0.34% for the week, China’s FTSE China A50 (CHA50) jumped by 6.12%, Hong Kong’s Hang Seng (HK50) gained 5.56% for the week, and Australia’s S&P/ASX 200 (AU200) closed positive by 1.23% for the week.

On Friday, traders saw two major surprises from Japan. First, the Bank of Japan adjusted its yield curve control policy slightly and made it more flexible in its management. Second, inflation in Tokyo unexpectedly rose to 3.2% in July. But despite this, the BoJ lowered its long-term inflation forecasts, thus keeping the possibility for further easing.

S&P 500 (F)(US500) 4,582.23 +44.82  (+0.99%)

Dow Jones (US30) 35,459.29 +176.57 (+0.50%)

DAX (DE40)  16,469.75 +63.72 (+0.39%)

FTSE 100 (UK100) 7,694.27 +1.51 (+0.020%)

USD Index  101.70 -0.07 (-0.07%)

• – Japan Industrial Production (m/m) at 02:50 (GMT+3);
• – Japan Retail Sales (m/m) at 02:50 (GMT+3);
• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• – China Manufacturing PMI (m/m) at 04:30 (GMT+3);
• – China Non-Manufacturing PMI (m/m) at 04:30 (GMT+3);
• – German Retail Sales (m/m) at 09:00 (GMT+3);
• – Switzerland Retail Sales (m/m) at 09:30 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – Eurozone GDP (q/q) at 12:00 (GMT+3);
• – Eurozone GDP (q/q) at 12:00 (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 JustMarkets

At yesterday’s stock market close, the Dow Jones Index (US30) closed down by 0.67%, while the S&P 500 Index (US500) fell by 0.64%. The NASDAQ Technology Index (US100) closed negative by 0.55% on Thursday.

The latest US GDP data showed that the economy grew by 2.4% for the second quarter after growing 2.0% in the first quarter. Analysts had expected growth of 1.8%. Gross Domestic Product increased due to solid consumer spending and robust business investment. Combined with other data showing stronger than expected durable goods orders and a decline in unemployment claims, boosted confidence that the Federal Reserve can curb inflation and avoid a recession.

Meta Platforms (META) rose more than 4% after the social media giant reported second-quarter guidance and results that beat Wall Street estimates, driven by strong advertising growth. UBS raised its target on META shares to $400 from $335. Shares of eBay (EBAY), meanwhile, fell by 10% after its earnings forecast for the current quarter missed analysts’ estimates and overshadowed better-than-expected second-quarter results.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) rose by 1.70%, France’s CAC 40 (FR40) gained 2.05%, Spain’s IBEX 35 (ES35) added 1.08%, and the UK’s FTSE 100 (UK100) closed positive by 0.21%.

The European Central Bank raised interest rates by 25 basis points to 4.25% in line with expectations while emphasizing that inflation is expected to remain high for a longer period despite the recent decline. During the press conference, Lagarde emphasized the weaker economic outlook for the euro area economy in the near term but remained optimistic about a recovery in growth in the medium term. Lagarde remained evasive when asked about the possibility of a rate hike in September. This is a dovish sign, given that the ECB president has previously been quite hawkish when pushing for future rate hikes.

On Thursday, gold posted its sharpest one-day drop since late June, reacting to the US Federal Reserve getting back on the path of monetary tightening by announcing a 25 basis point rate hike in July and again pledging to stick to a hawkish policy to bring inflation to its long-term 2% target. Also influential was the European Central Bank’s quarter-point rate hike and a signal that the ECB may pause in September, a potentially dovish development that pushed the dollar higher against the euro, exacerbating gold’s decline.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) rose by 0.68%, China’s FTSE China A50 (CHA50) gained 0.20%, Hong Kong’s Hang Seng (HK50) ended the day up by 1.41%, and Australia’s S&P/ASX 200 (AU200) ended Thursday positive by 0.73%. At the open on Friday, Japan’s Nikkei 225 index (JP225) suffered sharp losses after somewhat aggressive statements from the Bank of Japan, while Chinese stocks posted gains on hopes of additional stimulus measures.

Japanese government bond yields rose sharply on Friday, hitting the top end of the Bank of Japan’s benchmark range. The BOJ kept interest rates ultra-low on Friday and said that while it will continue yield curve control (YCC) operations, it will manage the yield curve with “greater flexibility.” The statement said it is appropriate to enhance the sustainability of monetary policy easing under the current framework by conducting more flexible yield curve control and responding promptly to both upside and downside risks to economic activity and prices in Japan. The move marks a step toward potentially ending the ultra-soft monetary conditions that Japanese equities have enjoyed for nearly a decade.

Australian retail sales unexpectedly fell in June, suggesting that consumers are easing off in response to 12 interest rate hikes by the Reserve Bank of Australia (RBA). Sales fell by 0.8% from the previous month.

China’s top housing official has increased pressure on financial regulators and lenders to step up efforts to revive the country’s struggling real estate sector.

S&P 500 (F)(US500) 4,537.41 −29.34  (−0.64%)

Dow Jones (US30) 35,282.72 −237.40 (−0.67%)

DAX (DE40)  16,406.03 +274.57 (+1.70%)

FTSE 100 (UK100) 7,692.76 +15.87 (+0.21%)

USD Index  101.81 +0.93 (+0.92%)

• – Japan Tokyo Core CPI (m/m) at 02:30 (GMT+3);
• – Japan BoJ Interest Rate Decision at 06:00 (GMT+3);
• – Japan BoJ Monetary Policy Statement at 06:00 (GMT+3);
• – Japan BoJ Outlook Report at 06:00 (GMT+3);
• – Japan BoJ Press Conference at 09:00 (GMT+3);
• – Germany Consumer Price Index (m/m) at 15:00 (GMT+3);
• – Canada GDP (m/m) at 15:30 (GMT+3);
• – US PCE 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 JustMarkets

At yesterday’s stock market close, the Dow Jones Index (US30) increased by 0.23%, while the S&P 500 Index (US500) was down by 0.02%. The NASDAQ Technology Index (US100) closed positive by 0.12% on Wednesday.

The US Central Bank raised rates by 25 bps to 5.50%, the highest in 22 years. But the market was fully ready for such a decision, so there were no surprises here. The main focus of investors was directed to the FOMC press conference.

The main theses of the Fed Chairman Jerome Powell’s speech:

• Core inflation remains high (current Core CPI 4.8%);
• The FOMC is committed to returning inflation to the 2.0% target to achieve price stability (current CPI 3.0%);
• Inflation is not projected to reach the 2.0% target until 2025;
• Another rate hike at the next meeting is possible, but it will depend on incoming economic data;
• A rate cut this year is not the baseline scenario;
• The FOMC is no longer forecasting a recession in the US;
• Asset reduction (quantitative tightening – QT) will continue.

According to the FedWatch Tool, there is only a 22% chance that the US Fed will raise interest rates in September. For investors, this is a green flag for further growth of stock indices.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) fell by 0.49%, France’s CAC 40 (FR40) lost 1.35%, Spain’s IBEX 35 (ES35) rose by 0.85%, and the UK’s FTSE 100 (UK100) closed negative yesterday by 0.19%.

Another drop in Germany’s leading indicator, the IFO index, confirms that the economy has returned to a downtrend. According to economists, the German economy is stuck in the zone between stagnation and recession (so-called “slow recession”) and is in dire need of a new reform program. China’s weaker-than-expected opening, the looming recession in the US and Europe, and the continued tightening of monetary policy seem to be taking their toll on German company sentiment. Germany is likely to face a longer period of subdued growth – the current valuation component is as low as it was at the end of 2020, with both the current indicators and the expectations component down.

The ECB will hold a monetary policy meeting today. Analysts expect the ECB to raise rates by 0.25%. However, the focus will be on the Central Bank’s plans for September, and markets are divided on whether there will be another rate hike or whether the ECB will hit the pause button. ECB President Christine Lagarde is likely to reiterate that future decisions will be based on incoming economic data. Last time the ECB said that inflation is projected to stay too high for too long, so given the strong labor market, there is room for the ECB to raise rates further.

The Energy Information Administration (EIA) reported yesterday a 600,000 barrel drop in US crude oil inventories. Oil prices rose in Asian trading on Thursday, recovering most of the previous session’s losses. Analysts believe that there are concerns in the oil market about the reliability of oil supplies in sufficient volume. Oil prices are therefore expected to rise in the coming months, following tensions in global markets after supply cuts by the world’s largest producers.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) was down by 0.04%, China’s FTSE China A50 (CHA50) decreased by 0.04%, Hong Kong’s Hang Seng (HK50) lost 0.36% on the day, while Australia’s S&P/ASX  00 (AU200) was positive by 0.85% on Wednesday. But most Asian stocks returned to the upside on Thursday as interest in risk-oriented markets was boosted by the Federal Reserve downplaying the likelihood of a US recession this year.

While aggressive interest rate hikes in the US appear to be nearing an end, Japan’s central bank faces a tough decision tomorrow on whether to take another step towards phasing out its controversial yield control program. Although inflation has been holding above its 2% target for more than a year, BOJ Governor Kazuo Ueda has vowed to keep monetary policy soft until he is confident the economy can withstand global headwinds and allow companies to continue raising wages next year. The BOJ is expected to keep the policy rate at minus 0.1% and maintain its yield curve control (YCC) targets at the two-day meeting that ends on Friday. However, the board may discuss making minor policy changes, such as widening the range of premiums around the 10-year yield target, if it feels the costs of YCC are starting to outweigh the benefits.

S&P 500 (F)(US500) 4,566.75 −0.71  (−0.016%)

Dow Jones (US30) 35,520.12 +82.05 (+0.23%)

DAX (DE40)  16,131.46 −80.13 (−0.49%)

FTSE 100 (UK100) 7,676.89 −14.91 (−0.19%)

USD Index  101.01 −0.34 (−0.33%)

• – Eurozone ECB Interest Rate Decision at 15:15 (GMT+3);
• – Eurozone ECB Monetary Policy Statement at 15:15 (GMT+3);
• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US GDP (q/q) at 15:30 (GMT+3);
• – Eurozone ECB Press Conference at 15:45 (GMT+3);
• – US Pending Home Sales (m/m) at 17:00 (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

At yesterday’s stock market close, the Dow Jones Index (US30) increased by 0.07%, while the S&P 500 Index (US500) added 0.28%. The NASDAQ Technology Index (US100) closed positive by 0.61% on Tuesday.

The US consumer confidence rose to a two-year high in July on the back of a continued robust labor market and lower inflation, improving the economy’s near-term outlook. The Consumer Confidence Index jumped to 117 in July from 110.1 in June. That’s the highest level in two years. But consumers still fear a recession next year after the Federal Reserve sharply raised interest rates.

Microsoft (MSFT), beating Wall Street forecasts for fiscal quarter revenue and profit Tuesday, laid out an aggressive spending plan to meet the demand for new artificial intelligence services. The company’s spending surged as it built new data centers to support artificial intelligence, while its capital expenditures will continue to rise. The company’s stock fell about 4% on the report. Alphabet (GOOG) for the second quarter exceeded Wall Street’s expectations. Alphabet’s results were driven by robust demand for cloud services and an uptick in advertising. The company’s shares jumped by 8% in after-hours trading. Snap (SNAP) yesterday reported weaker-than-analysts-expected third-quarter guidance as it has to compete with tech giants in advertising, sending shares down -18%. The Snapchat app attracts hundreds of millions of users thanks to its simple photo filters and a new chatbot with artificial intelligence. However, the company has struggled to consistently grow revenue and catch up with competitors.

The International Monetary Fund on Tuesday slightly raised its global growth estimates for 2023, given robust economic activity in the first quarter, but warned that persistent challenges were worsening the medium-term outlook. The IMF now forecasts global real GDP growth at 3.0% in 2023, up 0.2% from its April forecast, but left its 2024 forecast unchanged, also at plus 3.0%.

Equity markets in Europe traded flat yesterday. Germany’s DAX (DE40) rose by 0.13%, France’s CAC 40 (FR40) fell by 0.16%, Spain’s IBEX 35 (ES35) declined by 0.38%, and the UK’s FTSE 100 (UK100) closed up by 0.17%.

Goldman Sachs (GS) lowered its 2023 eurozone growth forecast following weaker economic activity data.

The Bank of England on Tuesday forecast the Bank’s net loss will be just over 150 billion pounds ($193 billion) over the next ten years as it winds down its quantitative easing (QE) program, up from the 100 billion pounds forecast in April. These losses will have to be financed by the government at a time when public finances are already under pressure from rising interest rates and inflation.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) lost 0.06%, China’s FTSE China A50 (CHA50) jumped by 3.41%, Hong Kong’s Hang Seng (HK50) jumped by 4.10% on the day, and Australia’s S&P/ASX 200 (AU200) was positive by 0.46% on Tuesday. Senior Chinese officials said yesterday they would take additional measures to support the economy, which in turn sparked a sharp rally in local stocks.

Australia’s inflation rate continues to decline. For the last month, the annual consumer price index decreased from 5.6% to 5.4% (forecast 5.4%). Analysts believe that this decline should be enough to keep the Reserve Bank of Australia (RBA) from another rate hike in August. But according to economists, it will be much more difficult to reduce inflation further, and it is very likely that the RBA will make another rate hike in September.

The IMF forecasts growth in Japan’s economy but warns of inflationary pressures. Japan’s economy is expected to grow by 1.4% in 2023, faster than the 1.0% growth last year, as the lifting of pandemic restrictions stimulates consumption. IMF economists believe Japan’s ultra-soft monetary policy will remain accommodative in the near term, but the Bank of Japan should be ready to start raising interest rates given inflation risks.

S&P 500 (F)(US500) 4,567.46 +12.82 (+0.28%)

Dow Jones (US30) 35,438.07 +26.83 (+0.076%)

DAX (DE40)  16,211.59 +20.64 (+0.13%)

FTSE 100 (UK100) 7,691.80 +13.21 (+0.17%)

USD Index  101.29 -0.06 (-0.06%)

• – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3).
• – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3).
• – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – US CB Consumer Confidence (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 JustMarkets

At Monday’s close of the stock market, the Dow Jones Index (US30) closed up by 0.52%, while the S&P 500 Index (US500) added 0.40%. The NASDAQ Technology Index (US100) closed positive by 0.19% on Monday. The Dow Jones Index (US30) extended its daily winning streak to its eleventh consecutive gain, helped by a rally in energy. Energy stocks were supported by a rise in oil prices to an April high amid bets that OPEC supply cuts will tighten market conditions.

The Federal Reserve begins its two-day meeting on Tuesday. A 0.25% rate hike is expected as early as tomorrow, which is already fully factored into the price. Morgan Stanley analysts believe Wednesday’s expected rate hike could likely be the final rate hike, predicting a peak federal funds rate of 5.375% this year.

Equity markets in Europe traded flat yesterday. Germany’s DAX (DE40) increased by 0.08%, France’s CAC 40 (FR40) fell by 0.07%, Spain’s IBEX 35 (ES35) declined by 0.29%, and the UK’s FTSE 100 (UK100) closed 0.19% higher.

The fall in economic indicators across Europe poses a difficult task for the European Central Bank: to make another rate hike in September or to switch to full data dependence. For the ECB, there are now three main options:

• The ECB continues to signal that if the core level of inflation is maintained, further tightening is likely. Such signaling is likely to trigger a hawkish market reaction with interest rate expectations rising.
• The ECB maintains a fully data-dependent regime, with a willingness to hike but no clear bias towards tightening. In this scenario, the market reaction could be moderately dovish.
• The Central Bank assumes that clear progress has been made toward the inflation target, and it is unclear whether further rate hikes are needed. In this scenario, market reaction is likely to be very dovish.

The middle scenario is the closest considered by analysts, which could put pressure on the euro against the dollar in the near term.

Gold’s rally appears to be weakening ahead of this week’s policy meetings between the US Federal Reserve, the European Central Bank, and the Bank of Japan. Gold is highly sensitive to US government bond yields and the dollar index. Hawkish comments from the US Fed will give temporary support to the dollar, which will be negative for precious metals. But in the medium and long term, banks expect the dollar and government bond yields to fall, so gold still has good growth prospects in the higher time frames.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) increased by 1.23%, China’s FTSE China A50 (CHA50) fell by 0.54%, Hong Kong’s Hang Seng (HK50) lost 2.13% on the day, and Australia’s S&P/ASX 200 (AU200) was negative by 0.10% on Monday.

Chinese state-owned banks unexpectedly conducted currency intervention to support the yuan against the dollar. The People’s Bank of China (PBoC) set the yuan (CNY) discount rate at 7.1406. It is allowed to trade plus-minus 2% of this rate. This applies to CNY, which is traded on China’s exchanges. There is also an offshore yuan (CNH). Its trading range is unlimited, so significant fluctuations in the exchange rate compared to CNY tend to trigger a reaction from the PBoC.

S&P 500 (F)(US500) 4,554.64 +18.30 (+0.40%)

Dow Jones (US30) 35,411.24 +183.55 (+0.52%)

DAX (DE40)  16,190.95 +13.73 (+0.085%)

FTSE 100 (UK100) 7,678.59 +14.86 (+0.19%)

USD Index  101.40 +0.33 (+0.32%)

• – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – US CB Consumer Confidence (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 George Prior 

China’s raft of new measures to bolster its economy strengthens the case for global investors’ continued attraction to the country, says the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The bullish analysis from Nigel Green of deVere Group comes as China’s economic planning agency announced Monday a series of measures to encourage investment.

Beijing’s series of policies is ahead of a key Politburo meeting this week which will review China’s first half economic performance.

In the 17-point statement, the National Development and Reform Commission vowed to lure more private capital to become involved in the construction of important national projects and major industrial supply chain ventures.

The moves come after last Thursday’s announcement from the People’s Bank of China and the State Administration of Foreign Exchange to confirm that they have modified their cross-border financing rules to allow companies to borrow more from international investors.

Nigel Green says: “Will these measures work? Yes, because they strengthen the case for global investors’ recently renewed enthusiasm for China – which is robust, despite the economic red flags.

“Weaker international demand, which has triggered the drop in exports, comes at a time when the economy is under pressure from a weak property sector and a disappointingly slow Covid rebound after controls were dropped at the start of the year. In addition, youth unemployment is at its highest level on record.

“But despite these challenges, it remains an appealing destination for investors.”

One of the most compelling reasons why investors are attracted to China is its massive market potential.

“With a population of over 1.4 billion people and a growing middle class, China offers a vast consumer base for businesses to tap into. The rising incomes and increasing urbanization have fuelled demand for various products and services, providing ample opportunities for investors across sectors such as technology, healthcare, and consumer goods,” says the deVere CEO.

The People’s Republic also has a proven ability to navigate and adapt to economic challenges. “Despite recent headwinds, including trade tensions and the pandemic, China has shown remarkable resilience.”

The country’s emphasis on research and development, coupled with significant investments in emerging technologies like artificial intelligence, 5G, and biotechnology, has propelled China to the forefront of technological advancements, affirms Nigel Green.

He notes: “Investors recognise this immense potential in these sectors and are eager to capitalise on the nation’s technological prowess, which offers unique opportunities for high returns on investment.”

Investors are also fully aware of China’s economic model which is gradually shifting from export-driven growth to one fuelled by domestic consumption. This transition presents investors with a new set of opportunities as the Chinese population becomes increasingly affluent and consumption-oriented.

Companies that cater to the evolving tastes and preferences of Chinese consumers stand to benefit immensely from this paradigm shift, prompting investors to focus on sectors such as e-commerce, entertainment, and luxury goods.

Nigel Green concludes: “Beijing’s proactive policies, such as stimulus measures and targeted reforms, have effectively supported economic growth and stabilized market conditions in the past and we expect the new measures will do the same. This track record instils confidence in global investors, as they believe that China can effectively address and overcome future obstacles.

“The new policies will further help investors see beyond the short-term and look for the long-term potential in China.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

By JustMarkets

At Friday’s stock market close, the Dow Jones Index (US30) closed at the opening level (+2.11% for the week), while the S&P 500 Index (US500) added 0.03% (+0.61% for the week). The NASDAQ Technology Index (US100) closed positive by 0.20% on Friday (-0.42% for the week). The Nasdaq’s decline in recent days is attributed to the expiration of one-month options and the pending rebalancing of the multi-trillion dollar Nasdaq 100. In recent days, indices have begun to trade multi-directionally, indicating a rotation of funds between sectors. There is now a flow of funds from the technology sector into the banking and healthcare sectors.

American Express’s (AXP) shares fell nearly 4% after the credit card giant missed quarterly earnings expectations and posted a weak full-year profit outlook. Consensus estimates suggest the current reporting season will be a flop. Real GDP growth is expected to deteriorate towards the end of the year.

Equity markets in Europe traded flat on Friday. The German DAX (DE30) decreased by 0.17% (+1.02% for the week), the French CAC 40 (FR40) added 0.65% (+1.62% for the week) on Friday, the Spanish IBEX 35 (ES35) increased by 0.55% (+1.66% for the week), the British FTSE 100 (UK100) closed positive by 0.23% (+3.08% for the week).

The ECB will hold a monetary policy meeting this week. The ECB is expected to raise the rate by 0.25%. But the focus will be on the central bank’s plans for September, and markets are divided on whether there will be another hike or whether the ECB will hit the pause button. ECB President Christine Lagarde is likely to reiterate that future decisions will be based on incoming economic data. Europe’s economic outlook is deteriorating rapidly, with GDP falling in a number of key economies, business activity falling, and manufacturing declining. The only thing holding the economy together is a strong labor market.

Crude oil prices rose for the fourth week in a row. On Friday and Saturday, Russia continued to attack Ukrainian food export businesses in southern Ukraine and escalated tensions after pulling out of an UN-brokered safe sea corridor agreement to transport Ukrainian grain. Moscow has set a condition for the grain deal in the form of lifting some sanctions but is deliberately destroying Ukraine’s port infrastructure, confirming its reputation as a terrorist state.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) fell by 0.87% for the week, China’s FTSE China A50 (CHA50) fell by 0.64%, Hong Kong’s Hang Seng (HK50) ended the week down by 1.29%, and Australia’s S&P/ASX 200 (AU200) ended the week positive by 0.15%.

On Monday, Hong Kong stocks fell amid signs that foreign investors are cutting their bets on China’s biggest companies as Beijing refrains from major stimulus measures amid a deteriorating economy.

Japan’s trade balance data last week showed a trade surplus in June, which could lead to wage growth going forward if demand for Japanese goods remains strong. Wage growth tends to be accompanied by rising prices, meaning inflation will continue to rise slowly, which is crucial for the Bank of Japan before it changes its loose monetary policy. At the same time, Japan’s top financial diplomat suggested on Friday that the central bank may change its approach to monetary stimulus at its policy meeting because of “signs of change” in corporate behavior regarding wage growth and price increases.

New Zealand recorded a small trade surplus in June, mainly due to lower volumes and values of imported gasoline and diesel. Imports and exports totaled about $16.3 billion, with exports exceeding imports by only $8.8 million. These figures are better than Westpac’s forecast of a $450 million monthly deficit. However, they do not change the overall picture of an alarming annual deficit. On a seasonally adjusted basis, the country’s trade deficit for the second quarter totaled $2.3 billion.

S&P 500 (F)(US500) 4,536.34 +1.47 (+0.032%)

Dow Jones (US30) 35,227.69 +2.51 (+0.01%)

DAX (DE40)  16,177.22 −27.00 (−0.17%)

FTSE 100 (UK100) 7,663.73 +17.68 (+0.23%)

USD Index  101.09 +0.21 (+0.20%)

• – New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
• – Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
• – Australia Services PMI (m/m) at 02:00 (GMT+3);
• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• – Japan Services PMI (m/m) at 03:30 (GMT+3);
• – Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
• – Germany Manufacturing PMI (m/m) at 10:30 (GMT+3);
• – Germany Services PMI (m/m) at 10:30 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – UK Services PMI (m/m) at 11:30 (GMT+3);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
• – US Services PMI (m/m) at 16:45 (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

As of Thursday’s stock market close, the Dow Jones Index (US30) added 0.47%, while the S&P 500 Index (US500) decreased by 0.68%. The NASDAQ Technology Index (US100) fell sharply yesterday by 2.05%. The Dow Jones Index (US30) has posted nine straight days of gains, the longest streak of gains since 2017.

Shares of Tesla (TSLA) fell more than 9% at the open yesterday and were on track for the biggest one-day percentage drop after the electric car maker reported second-quarter gross profit fell to a four-year low and CEO Elon Musk hinted at further price cuts. Netflix (NFLX) was down by 8% from the open after the streaming video company’s quarterly revenue missed estimates. Analysts at Barclays raised their price target on shares of Nvidia (NVDA) by $100 to $600 per share ahead of its second-quarter earnings report. Barclays joined HSBC and Rosenblatt, who also raised their price targets. Analysts believe Nvidia could deliver another strong earnings report above expectations amid GenAI demand.

The Labor Department said initial claims for state unemployment benefits fell 9,000 to 228,000. Economists had forecast 242,000 claims in the past week. That increased the likelihood of a more hawkish stance from the Fed next week. On Thursday, the Conference Board said its leading economic index, a gauge that anticipates future economic activity, fell by 0.7% in June to 106.1. Other data on Thursday showed US secondary home sales fell to a five-month low in June.

Equity markets in Europe traded higher on Thursday. Germany’s DAX (DE40) increased by 0.59%, France’s CAC 40 (FR40) added 0.79% yesterday, Spain’s IBEX 35 (ES35) closed positive by 0.72%, and the UK’s FTSE 100 (UK100) closed up by 0.76%.

According to the survey, the European Central Bank will raise interest rates by 25 basis points on July 27. But this decision is already factored into the price, so the main focus of attention will be on the ECB’s future plans. The hawkish attitude of officials will hint at another rate hike in the fall.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) fell by 1.23%, China’s FTSE China A50 (CHA50) fell by 0.25%, Hong Kong’s Hang Seng (HK50) lost 0.13%, while Australia’s S&P/ASX 200 (AU200) ended the day positive by 0.02%.

Technology chip giant TSMC reported lower profits and provided a gloomy outlook. China’s National Development and Reform Commission, China’s economic planner, unveiled new measures aimed at boosting spending in the auto and consumer electronics sectors. Fund managers have become less optimistic about China’s economic recovery this year amid weak performance and limited policy support. Economists at Bank of America (BAC) warned that local stocks could test 11-year lows as the post-COVID economic recovery falters.

S&P 500 (F)(US500) 4,534.87 −30.85 (−0.68%)

Dow Jones (US30) 35,225.18 +163.97 (+0.47%)

DAX (DE40)  16,204.22 +95.29 (+0.59%)

FTSE 100 (UK100) 7,646.05 +57.85 (0.76%)

USD Index  100.77 +0.49 (+0.49%)

• – Japan National Core Consumer Price Index at 02:30 (GMT+3);
• – UK Retail Sales (m/m) at 09:00 (GMT+3);
• – Canada Retail Sales (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.