InvestMacro

By JustMarkets

At the end of Monday, the Dow Jones (US30) decreased by 0.12%, while the S&P 500 (US500) was up 0.08%. The NASDAQ Technology Index (US100) closed positive 0.07%. The broad market rose on Monday and extended last Friday’s rally on expectations of a Fed rate cut in September after the June Personal Consumption Expenditures Price Index, the Fed’s preferred gauge of inflation, declined as expected. Rising shares of chip companies also boosted the overall market on Monday after ON Semiconductor reported better-than-expected second-quarter earnings per share.

Stock investors will continue to pay attention to technology stocks as key earnings reports are due this week. This week, companies such as Microsoft (MSFT) will report on Tuesday, Meta (META) on Wednesday, and Apple (AAPL) and Amazon (AMZN) on Thursday.

The US economic news on Monday was weaker than expected and negatively impacted stocks after the Dallas Fed’s survey of overall manufacturing activity unexpectedly fell by 2.4 to 17.5, weaker than expectations for a rise to 14.2.

The major central banks will meet this week to decide on monetary policy. The Bank of Japan (BoJ) is expected to unveil details of plans to reduce monthly bond purchases after a two-day meeting on Wednesday and possibly signal it will start raising interest rates at its September meeting. The US Federal Reserve is likely to signal its intention to cut interest rates in September after its two-day meeting on Wednesday. Markets are pricing in a 25 bps chance of a rate cut at 4% for this week’s FOMC meeting and 100% for the next meeting on September 17–18. On Thursday, the Bank of England (BoE) is expected to cut the bank rate by 25 bps to 5.00% from 5.25%.

Equity markets in Europe were mostly up on Friday. Germany’s DAX (DE40) fell 0.53%, France’s CAC 40 (FR40) closed down 0.98%, Spain’s IBEX 35 (ES35) lost 0.43%, and the UK’s FTSE 100 (UK100) closed positive 0.08%. According to preliminary data, the French economy grew 0.3% QoQ in Q2 2024, matching the upwardly revised Q1 figure but beating market estimates of 0.2% growth. This was the strongest quarterly growth since Q2 2023.

WTI crude prices fell to $75.6 a barrel on Tuesday, hitting their lowest level since early June, amid lingering concerns about demand from major consumer China. The latest data showed that China’s total fuel oil imports fell by 11% in the first half of 2024. Concerns about the outlook for the Chinese economy intensified after disappointing GDP data and the unexpected rate cut by the PBOC last week to stimulate growth, which negatively impacted the market. In addition, concerns over geopolitical tensions in the Middle East eased slightly after reports that Hezbollah said it was not seeking to provoke a full-scale war with Israel.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) added 2.13%, China’s FTSE China A50 (CHA50) was down 0.39%, Hong Kong’s Hang Seng (HK50) was up 1.28%, and Australia’s ASX 200 (AU200) was positive 0.86%.

The Australian dollar is holding near $0.655 as traders avoid making big bets ahead of the release of key domestic inflation data that could influence the Reserve Bank of Australia’s next move. Markets expect Australia’s annual core inflation rate to remain at 4% in the second quarter, well above the central bank’s target range of 2–3%, bolstering the case for another rate hike in August. Traders currently see a 22% chance of the RBA raising rates by 25 basis points next month, while the likelihood of a rate cut before April next year is ruled out.

Japan’s unemployment rate in June 2024 was 2.5%, compared to market estimates of 2.6%, which had also been recorded in the previous four months. It was the lowest unemployment rate since January.

S&P 500 (US500) 5,463.54 +4.44 (+0.081%)

Dow Jones (US30) 40,539.93 −49.41 (−0.12%)

DAX (DE40) 18,320.67 −96.88 (−0.53%)

FTSE 100 (UK100) 8,292.35 +6.64 (+0.08%)

USD Index 104.57 +0.25 (+0.24%)

• – Japan Unemployment Rate (m/m) at 02:30 (GMT+3);
• – Switzerland KOF Leading Indicators (m/m) at 10:00 (GMT+3);
• – German GDP (m/m) at 11:00 (GMT+3);
• – Eurozone GDP (m/m) at 12:00 (GMT+3);
• – German CPI (m/m) at 15:00 (GMT+3);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
• – US JOLTs Job Openings (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

On Friday, the Dow Jones (US30) Index gained 1.64% (for the week +0.43%), while the S&P 500 (US500) Index gained 1.11% (for the week -1.54%). The NASDAQ Technology Index (US100) closed positive at 1.03% (for the week -3.16%). Market sentiment was fueled by new data showing weakening inflation, which heightened expectations of a potential interest rate cut in September. The PCE, the Federal Reserve’s preferred measure of inflation, matched expectations, although the core rate rose 0.2%, slightly above the 0.1% forecast. All sectors showed gains, led by industrials.

Bitcoin climbed toward the $70,000 mark on Monday, reaching the key level for the first time in six weeks after US presidential candidate Donald Trump doubled down on his support for cryptocurrencies in a keynote speech at the Bitcoin 2024 conference in Nashville over the weekend. Trump said he would make the US the “crypto capital of the world” and promised to maintain the country’s current level of bitcoin ownership. Moreover, Republican Senator Cynthia Lummis has introduced a legislative proposal to create an official US strategic reserve of 1 million BTC over the next five years, representing nearly 5% of total BTC.

Equity markets in Europe were mostly up on Friday. The German DAX (DE40) rose by 0.65% (for the week +3.82%), the French CAC 40 (FR40) closed 1.22% higher (for the week -0.74%), the Spanish IBEX 35 (ES35) added 0.18% (for the week +0.15%), and the British FTSE 100 (UK100) closed positive 1.21% (for the week +1.59%) on Friday. European equity markets were set for gains on Monday amid hopes that the US Federal Reserve and the Bank of England will open the door to monetary easing.

WTI crude oil prices rose to $77.5 a barrel on Monday, cutting more than 1% of the previous session’s drop on fears of a possible full-scale war in the Middle East. Israel vowed a strong response to Hezbollah on Sunday, accusing the Iranian-backed group of killing 12 children and teenagers in a rocket attack on a soccer field in the Golan Heights. Hezbollah, however, “strongly denies” its involvement in the strike. Escalating tensions in the Middle East are creating supply risks and increasing oil prices.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) fell by 5.71%, China’s FTSE China A50 (CHA50) declined by 3.07%, Hong Kong’s Hang Seng (HK50) lost 2.54% over five trading days, and Australia’s ASX 200 (AU200) was negative -0.63%.

Vietnam’s annual inflation rate rose to 4.36% in July 2024 from a three-month low of 4.34% in the previous month. Prices rose mainly for medical services (8.13% vs. 8.04% in June) and transportation (4.4% vs. 3.03%), while the cost of postal and telecommunication services fell at a slower pace (-1.06% vs. -1.18%). Meanwhile, annual core inflation, which excludes volatile goods, was 2.61%, remaining at its lowest level in nearly two years.

The offshore yuan stabilized at 7.26 per dollar after hitting a two-month high last week. Traders took a cautious stance ahead of a key Politburo meeting, which was expected to indicate near-term policy measures following the Third Plenum reforms. China recently surprised markets by lowering key interest rates and conducting a surprise credit operation, indicating that the central bank intends to provide stronger monetary stimulus to support the economy.

The debate over whether Australia’s central bank needs to tighten policy at the end of the cycle will likely be resolved with quarterly inflation data release this week. The RBA has raised rates by a smaller amount than other countries to hold down job growth while worrying about the ability of heavily indebted households to cope. If the RBA fails to meet its goal of returning price growth to its 2%-3% target late next year, further rate hikes are likely to be needed – and that’s a big risk of plunging the weak economy into recession.

S&P 500 (US500) 5,459.10 +59.88 (+1.11%)

Dow Jones (US30) 40,589.34 +654.27 (+1.64%)

DAX (DE40) 18,417.55 +118.83 (+0.65%)

FTSE 100 (UK100) 8,285.71 +99.36 (+1.21%)

USD Index 104.32 -0.04 (-0.04%)

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) added 0.20%, while the S&P 500 Index (US500) was down 0.51%. The NASDAQ Technology Index (US100) closed negative 0.93%. Stocks continued to decline on Thursday amid weakness in chip stocks and selloffs in several individual stocks driven by negative earnings surprises. In addition, the market continues to worry about weakening economic growth despite Thursday’s slightly stronger-than-expected US economic reports.

The US real GDP grew 2.8% (annualized) in the second quarter, beating expectations of 2.0% and up from the 1.4% growth in the first quarter. The GDP report helped ease market fears of lower consumer spending and a slowing economy. Looking ahead, markets expect US GDP to decline to 2.0% in Q3 and 1.6% in Q4. In addition, personal consumption rose 2.3% in Q3, exceeding expectations of 2.0% and up from Q1’s 1.5% increase. The US weekly initial jobless claims declined by 8,000 to 235,000, indicating a modest strengthening of the labor market compared to expectations of a decline to 238,000. June durable goods orders excluding defense and aviation, an indicator of corporate capital spending in the US, rose 1.0%, stronger than expectations of 0.2%.

Equity markets in Europe were declining yesterday. Germany’s DAX (DE40) fell by 0.48%, France’s CAC 40 (FR40) closed down 1.15%, Spain’s IBEX 35 (ES35) lost 0.58%, and the UK’s FTSE 100 (UK100) closed positive 0.40%. European equities closed sharply lower on Thursday, extending the sell-off from the previous session amid weak corporate results. ASML shares continued their bearish momentum and closed 4% lower, representing a 20% decline over the past two weeks

WTI crude oil prices recovered from earlier losses to reach $78.28 per barrel on Thursday, helped by stronger-than-expected economic growth in the US and lower crude inventories. Despite these factors, oil prices remain near six-week lows due to concerns over lower oil imports and refinery activity in China amid sluggish economic growth.

The US natural gas (XNGUSD) prices fell to $2.05/MMBtu after the EIA reported a larger-than-expected increase in storage inventories. The US utilities added 22 billion cubic feet (Bcf) of gas to storage last week, beating market expectations of a 15 Bcf increase. Gas storage levels are now 16.4% above the 5-year average. Natural gas prices are set to decline for a second week due to higher production.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) fell by 3.28%, China’s FTSE China A50 (CHA50) was down 0.74%, Hong Kong’s Hang Seng (HK50) lost 1.77%, and Australia’s ASX 200 (AU200) was negative 1.29%.

The offshore yuan weakened to 7.25 per dollar after hitting a more than two-month high in the previous session, likely due to a technical correction. Earlier, the yuan’s appreciation was attributed to state bank intervention, which took advantage of the weakening US dollar by aggressively selling the dollar and buying yuan in offshore and domestic markets to support its appreciation.

The Monetary Authority of Singapore (MAS) left monetary policy on hold for July 2024, extending the pause for the 5th consecutive time amid moderate imported inflation. The Central Bank said it will maintain the prevailing pace of appreciation of the SGD nominal effective exchange rate (S$NEER), with no change to its breadth and the level at which it is pegged. MAS noted that the city-state’s core inflation, the Consumer Price Index for all goods, declined to 2.8% y/y in Q2 2024 from 3.0% in Q1. At the same time, it maintained estimates for core inflation at 2.5–3.5% this year, noting a further slowdown in Q4 to around 2% in 2025.

Tokyo Japan’s core consumer price index rose to 2.2% year-on-year in July 2024, accelerating for the third straight month to the highest level since March, confirming the need for the central bank to normalize policy. The latest data also matched market expectations and followed a 2.1% rise in June. Next week’s BoJ meeting is expected to discuss the need to raise interest rates to defend the yen and combat inflationary pressures. Tokyo’s inflation data is widely seen as a leading indicator of nationwide price trends.

S&P 500 (US500) 5,399.22 −27.91 (−0.51%)

Dow Jones (US30) 39,935.07 +81.20 (+0.20%)

DAX (DE40) 18,298.72 −88.74 (−0.48%)

FTSE 100 (UK100) 8,186.35 +32.66 (+0.40%)

USD Index 104.39 0 (0%)

• – Japan Tokyo Core CPI (m/m) at 02:30 (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 the end of Tuesday, the Dow Jones Index (US30) decreased by 1.25%, while the S&P 500 Index (US500) was down 2.31%. The NASDAQ Technology Index (US100) closed negative 3.64%. Stocks fell yesterday amid disappointing earnings from Tesla and Google and weakness in chip maker stocks. Next week, companies such as Microsoft (MSFT) will report on Tuesday, Meta (META) on Wednesday, and Apple (AAPL) and Amazon (AMZN) on Thursday. Nvidia (NVDA) is expected to report earnings on August 28. The stock market is also concerned about the outlook for corporate earnings after the election. Vice President Kamala Harris performs better than President Biden and appears to have a better chance of defeating Donald Trump.

The market consensus expects second-quarter earnings for S&P 500 companies to rise 9% YoY. About a quarter of the companies in the S&P 500 have already reported, and most of them beat earnings forecasts.

The US economic reports released on Wednesday were weak and negative for the US economy, although they were at least dovish for Fed policy. S&P’s preliminary US manufacturing PMI for July fell 2.1 points to 49.5, much weaker than expectations of an unchanged 51.6. The US manufacturing PMI fell below the 50.0 level for the first time since December 2023, indicating weakness in the US manufacturing sector.

As some of the markets expected, the Bank of Canada (BoC) cut its key interest rate by 25 bps to 4.5% at its July 2024 meeting, extending the 25 bps rate cut from the June meeting. The Bank of Canada’s Board of Governors noted that oversupply in the Canadian economy has helped slow inflation in recent months, justifying a looser monetary policy. The central bank also noted that, combined with indicators suggesting excess supply, lower interest rates could help slow mortgage and housing cost growth, contributing most to inflation.

Equity markets in Europe were declining yesterday. Germany’s DAX (DE40) fell 0.92%, France’s CAC 40 (FR40) closed down 1.12%, Spain’s IBEX 35 (ES35) lost 0.02%, and the UK’s FTSE 100 (UK100) closed negative 0.17% on Wednesday. European equity markets opened lower on Thursday, following a global equity sell-off as disappointing earnings reports from mega-large tech companies in the US triggered massive sell-offs. On the corporate front, earnings are expected from Nestle, Roche, AstraZeneca, Sanofi, and Stellantis, among others.

The preliminary Eurozone manufacturing PMI for July fell 0.2 points to 45.6, weaker than expectations for a 0.3 point increase to 46.1. The preliminary Eurozone Services PMI for July fell 0.9 points to 51.9, weaker than expectations for a 0.1 point increase to 52.9.

WTI crude oil prices fell to $77 per barrel on Thursday, hitting their lowest since early June, as the prevailing negative sentiment in global stock markets put pressure on risk assets. In addition, the prospects of an impending ceasefire agreement between Israel and Hamas brokered by Egypt, Qatar, and the US put downward pressure on oil prices. Meanwhile, EIA data showed a 3.74 million barrel decline in inventories last week, the fourth consecutive decline, exceeding forecasts for a 2.05 million barrel drop.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) fell 1.11%, China’s FTSE China A50 (CHA50) declined 0.32%, Hong Kong’s Hang Seng (HK50) lost 0.91%, and Australia’s ASX 200 (AU200) was negative 0.09%. Asian equity markets fell sharply on Thursday, following losses on Wall Street overnight, as disappointing earnings from mega-large companies triggered a sell-off in technology and artificial intelligence stocks. Japanese stocks led the decline in regional markets, which were also pressured by a rising yen amid bets of a Bank of Japan rate hike next week.

The People’s Bank of China (PBOC) unexpectedly cut its one-year lending rate, known as the medium-term lending facility (MLF), by 20 bps to 2.3% from 2.5% on July 25. It was the first cut in almost a year and the biggest since April 2020. The central bank stepped up support for the weakening economy following the Third Plenum in mid-July, weaker-than-expected second-quarter GDP data, and mixed economic data in June just days after cutting the key short-term rate.

S&P 500 (US500) 5,427.13 −128.61 (−2.31%)

Dow Jones (US30) 39,853.87 −504.22 (−1.25%)

DAX (DE40) 18,387.46 −170.24 (−0.92%)

FTSE 100 (UK100) 8,153.69 −13.68 (−0.17%)

USD Index 104.33 -0.12 (-0.12%)

• – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – US GDP (q/q) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 18:00 (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.