InvestMacro

By JustMarkets 

At Tuesday’s close, the Dow Jones Index (US30) decreased by 0.14%, while the S&P 500 Index (US500) was down 0.16%. The NASDAQ Technology Index (US100) closed negative 0.06%.

Spotify (SPOT) shares are up 2.11% after reporting stronger-than-expected subscriber growth and higher-than-expected gross profit. Tesla’s (TSLA) second-quarter net income fell 45% from a year ago as sales of the company’s electric vehicles declined globally despite price cuts and low-interest financing. Tesla Inc shares fell 3% after the report was released. Alphabet Inc. (GOOG) reported second-quarter financial results on Tuesday that mostly exceeded analysts’ expectations. The company reported adjusted earnings per share (EPS) of $1.89, slightly above the consensus estimate of $1.83. Revenue for the quarter totaled $84.74 billion, which was also above analysts’ average prognosis of $84.16 billion. Google shares rose 2.2 percent after-hours trading. Visa (V)’s third-quarter revenue growth fell short of Wall Street expectations as high borrowing costs curbed consumer spending, sending shares of the world’s largest payment processor down 2.1% in extended trading.

Recently, the market has viewed a Trump victory as favorable for the dollar. A Trump administration would likely pursue tax cuts and stimulative fiscal policy, which would be hawkish for Fed policy and thus favorable for the dollar. In contrast, a victory for Vice President Harris would favor the status quo and would not support the dollar.

Markets are awaiting Friday’s PCE deflator report to see when inflation might fall enough for the Fed to start cutting rates. The PCE deflator is the Fed’s preferred inflation gauge. The consensus on Friday is that the June PCE deflator will fall to 2.4% y/y from May’s 2.6%, and the June core PCE deflator will fall to 2.5% y/y from May’s 2.6%. A decline in the PCE index could support indices that have been corrected for the past few days.

Equity markets in Europe traded flat on Tuesday. German DAX (DE40) rose by 0.82%, French CAC 40 (FR40) closed down 0.31%, Spanish IBEX 35 (ES35) added 0.62%, British FTSE 100 (UK100) closed negative 0.38%. European equity markets opened lower on Wednesday as disappointing earnings reports weighed on investor sentiment. LVMH reported lower sales growth in the second quarter as Chinese consumers curbed spending on luxury goods, while Deutsche Bank recorded a quarterly loss after provisioning for ongoing litigation against its Postbank unit.

WTI crude prices rose to above $77 a barrel on Wednesday after falling for four consecutive sessions, helped by a larger-than-expected decline in US oil inventories. API data showed a 3.9 million barrel decline in inventories last week, marking the fourth straight week of decline and exceeding market estimates of a 2.5 million barrel drop. Renewed optimism over ceasefire talks between Israel and Hamas also put downward pressure on prices after Israeli Prime Minister Benjamin Netanyahu said a ceasefire agreement could take shape.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.01%, China’s FTSE China A50 (CHA50) was down 1.55%, Hong Kong’s Hang Seng (HK50) lost 0.94%, while Australia’s ASX 200 (AU200) was positive 0.50%.

Malaysia’s annual inflation rate unexpectedly came in at 2.0% for June 2024, below market expectations of 2.2%, and stable for the second consecutive month. The reading remained at its highest level since August 2023. Core consumer prices, excluding volatile fresh food and administrative expenses, rose 1.9% y/y in June, maintaining the same pace for a third month and remaining at the highest since December 2023.

Jibun Bank’s Japan Manufacturing PMI unexpectedly fell to 49.2 in July 2024 from 50.0 in the previous month, missing market estimates of 50.5 and indicating the first contraction in factory activity since April. The latest data also marked the fifth contraction in the manufacturing sector this year amid a fresh drop in output. The flash data showed that Japan’s services PMI from Jibun Bank jumped to 53.9 in July 2024 from 49.4 in the previous month. It was the sixth rise in the services sector this year and the sharpest since April, as new orders rose by the most in three months and employment growth accelerated.

S&P 500 (US500) 5,555.74 −8.67 (−0.16%)

Dow Jones (US30) 40,358.09 −57.35 (−0.14%)

DAX (DE40) 18,557.70 +150.63 (+0.82%)

FTSE 100 (UK100) 8,167.37 −31.41 (−0.38%)

USD Index 104.44 +0.12 (+0.12%)

• – 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);
• – 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);
• – Canada BoC Interest Rate Decision at 16:45 (GMT+3);
• – Canada BoC Monetary Policy Statement at 16:45 (GMT+3);
• – US New Home Sales (m/m) at 17:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – Canada BoC Press Conference at 17:30 (GMT+3);
• – FOMC Member Bowman Speaks at 23:05 (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 Industrial Average (US30) was up 0.32%, while the S&P 500 Index (US500) added 1.08%. The NASDAQ Technology Index (US100) closed positive 1.58%.

NVIDIA Corporation (NVDA) closed nearly 5% higher after Reuters reported that the chipmaker is developing a B20 version of its Blackwell GPU specifically for the Chinese market that will comply with US export control requirements. Ahead of Alphabet’s (GOOG) results release, Wedbush said it sees the tech giant’s sentiment as “positive ahead of second-quarter results” as advertising reviews and agency commentary point to the “continued strength of Google search.” Ahead of Tesla’s (TSLA) results release, CEO Elon Musk said humanoid robots will be used internally next year.

Equity markets in Europe were mostly up on Monday. Germany’s DAX (DE40) rose by 1.29%, France’s CAC 40 (FR40) closed positive 1.16%, Spain’s IBEX 35 (ES35) added 0.51%, and the UK’s FTSE 100 (UK100) closed positive 0.53%.

The Bank of England (BoE) urges market participants to prepare for a new cash management regime as excess liquidity is withdrawn from the financial system. Victoria Saporta, BoE executive director of markets, said the Central Bank wants to move from buying assets in exchange for cash reserves to a system of lending cash against those assets. The market has switched to repos as the BoE shrinks its balance sheet by selling bonds and not reinvesting in its maturing bond portfolio. However, the Central Bank now wants banks to use longer-term operations rather than short-term repo (STR) more often.

Morgan Stanley said the oil market deficit is likely to persist through most of the third quarter. However, by the fourth quarter, the market is expected to stabilize. This change is due to the decline in demand that typically occurs after summer and the projected increase in oil production by both OPEC and non-OPEC countries. That said, Morgan Stanley predicts that supply is likely to outstrip demand next year. The investment bank expects the oil price to fall to $75–79 by 2025.

WTI crude oil prices settled at $78.5 a barrel on Tuesday after falling for three consecutive sessions as investors’ attention shifted to US oil inventory data. On Monday, the People’s Bank of China unexpectedly lowered its interest rate to support economic growth, easing fears of a weakening Chinese economy and easing concerns about demand from the main oil consumer.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) was down 1.16%, China’s FTSE China A50 (CHA50) lost 1.08%, Hong Kong’s Hang Seng (HK50) added 1.25%, and Australia’s ASX 200 (AU200) was negative 0.50%.

Hang Seng (HK50) shares fell by 0.4% in Tuesday morning session, bouncing back from an active session the previous day after fresh data showed Hong Kong’s annual inflation rate rose to a 3-month high of 1.5% in June, rising for a second month on the back of lower electricity subsidies. Meanwhile, business sentiment in the city turned negative in Q3 for the first time in 2 years due to concerns over a new security law.

Singapore’s annual inflation rate fell to 2.4% in June 2024 from 3.1% in May, below market estimates of 2.7% and pointing to the lowest rate since August 2021. Annualized core inflation fell to 2.9% from 3.1% in the previous 3 months, falling short of the 3.0% prognosis and indicating the lowest level since March 2022. On a month-on-month basis, CPI fell by 0.2%, the first decline in three months.

The Australian dollar held below $0.665, near its lowest level in three weeks, as China’s surprise move to cut key interest rates pressured the currency. The Australian dollar is widely seen as a liquid proxy for the Chinese yuan, as Australia’s economy relies heavily on exports to China. The local currency has also been pressured recently by weakening commodity prices as Australia is a net exporter of energy and metals.

In Japan, Toshimitsu Motegi, a senior ruling party official, called on the Bank of Japan to more clearly outline its plan to normalize monetary policy through successive rate hikes, adding that excessive yen depreciation was hurting the economy.

S&P 500 (US500) 5,564.41 +59.41 (+1.08%)

Dow Jones (US30) 40,415.44 +127.91 (+0.32%)

DAX (DE40) 18,407.07 +235.14 (+1.29%)

FTSE 100 (UK100) 8,198.78 +43.06 (+0.53%)

USD Index 104.30 -0.10 (-0.09%)

• – Singapore Consumer Price Index (q/q) at 08:00 (GMT+3);
• – US Existing Home Sales (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 fell by 0.93% (for the week +0.37%), while the S&P 500 (US500) Index lost 0.71% (for the week -2.36%). The NASDAQ Technology Index (US100) closed negative 0.81% (for the week -4.11%). Investors continued to take profits after the recent record highs of the major indices. In addition, after an already turbulent week, a global IT system failure affecting services from airlines to banks added to the worries. Presumably, the outage was caused by an update from CrowdStrike that caused problems with Microsoft’s Windows.

US President Joe Biden has withdrawn from the 2024 presidential election. This came after his supporters turned their backs on him for weeks amid his poor debate performance against former president and Republican nominee Donald Trump. Biden has endorsed Vice President Kamala Harris, who has said she is running for president.

Bitcoin rose to around $68,000 on Monday, hitting its highest level since mid-June. The US bitcoin exchange-traded funds received a total of more than $17 billion in inflows in July, setting a new record. BlackRock’s IBIT and Fidelity’s FBTC were the main contributors, with net inflows of about $19 billion and $10 billion, respectively. Betting on Trump’s second presidency also continued to support digital assets in anticipation of a more favorable regulatory environment for them. Trump is scheduled to speak at an industry conference in Nashville, Tennessee, later this month, and some analysts speculate that he will announce plans to include Bitcoin in the US strategic reserves.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) fell by 1.00% (-3.01% for the week), France’s CAC 40 (FR40) lost 0.69% (-1.92% for the week), Spain’s IBEX 35 (ES35) fell by 0.54% (-1.23% for the week), and the UK’s FTSE 100 (UK100) closed negative 0.60% (-1.18% for the week).

While economic growth in the Eurozone remains sluggish, a dominant service sector driven by tourism is keeping price pressures at uncomfortably high levels. This poses challenges for the ECB, so Wednesday’s PMI data will be closely watched after the Central Bank kept interest rates at 3.75% last Thursday and gave no further guidance, saying it “depends on the data.”

On Friday, oil prices settled at their lowest level since mid-June as investors anticipated a possible ceasefire in Gaza, while a strong dollar also had an impact. The war in Gaza has prompted investors to put a risk premium on oil trading as tensions threaten global supplies. If a truce is reached, Iran-backed Houthi rebels may ease their attacks on commercial ships in the Red Sea as the group has declared support for Hamas.

Asian markets traded without any dynamics last week. Japan’s Nikkei 225 (JP225) fell by 3.85%, China’s FTSE China A50 (CHA50) gained 1.26%, Hong Kong’s Hang Seng (HK50) lost 4.31%, and Australia’s ASX 200 (AU200) was positive 0.15%.

The offshore yuan hit its lowest level in more than a week as traders reacted to the latest decision by the People’s Bank of China (PBoC). In a surprise move, key lending rates were cut to new record lows during the July fixing to support the fragile economic recovery. The 1-year prime rate (LPR), the benchmark for most corporate and household loans, was cut 10 basis points to 3.35%, while the 5-year rate, the benchmark for real estate mortgages, was cut 10 basis points to 3.85%. In addition, the Central Bank initiated a ¥58.2 billion reverse repurchase operation and cut the seven-day reverse repo rate by 10 basis points to 1.7% from 1.8%. The decision came shortly after last week’s third plenum and followed a series of economic data indicating that the economic recovery may be losing momentum.

The Australian dollar fell to $0.668, hitting its weakest level in three weeks, as a sharp decline in energy and metals prices pressured the currency. Australia’s economy relies heavily on commodity exports, making the Australian dollar sensitive to changes in commodity prices.

S&P 500 (US500) 5,505.00 −39.59 (−0.71%)

Dow Jones (US30) 40,287.53 −377.49 (−0.93%)

DAX (DE40) 18,171.93 −182.83 (−1.00%)

FTSE 100 (UK100) 8,155.72 −49.17 (−0.60%)

USD Index 104.37 +0.19 (+0.18%)

• – New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
• – China PBoC Loan Prime Rate at 04:15 (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

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.