InvestMacro

By JustMarkets

As of Wednesday’s stock market close, the Dow Jones Index (US30) increased by 0.31%, while the S&P 500 Index (US500) added 0.24%. The NASDAQ Technology Index (US100) closed positive by 0.03% yesterday.

Investment bank Credit Suisse raised its year-end growth target for the S&P 500 (US500) from 4050 to 4700 points as the risk of a near-term recession in the US declines and forecasts larger earnings for major technology companies. The Index is now at 4545 points.

Netflix’s (NFLX) quarterly report disappointed investors – revenue in the second quarter fell short of analysts’ expectations. Tesla (TSLA) reported quarterly gross profit in line with Wall Street estimates. NFLX and NFLX prices were little changed on the report’s release. Tesla CEO Elon Musk has signaled that he will cut electric car prices again, even as his all-out price war with rivals cuts into the company’s own margins.

Equity markets in Europe traded flat on Wednesday. Germany’s DAX (DE40) decreased by 0.10%, France’s CAC 40 (FR40) added 0.11% yesterday, Spain’s IBEX 35 (ES35) closed negative by 0.08%, and the UK’s FTSE 100 (UK100) closed up by 1.80%.

Bank of England Deputy Governor Dave Ramsden said he sees room to increase the pace of the central bank’s balance sheet reduction by accelerating the so-called quantitative tightening program. Ramsden said the Bank of England would reduce its holdings of bonds and corporate loans by a total of 100 billion pounds by October. The Bank of England is currently reducing its securities portfolio at a rate of about £80 billion a year as assets mature, and it is actively selling debt. It has about £802 billion of debt left.

Oil prices fell on Wednesday even as government data showed US crude stockpiles last week fell by only a third of expected levels. Gasoline consumption also came in below expectations for mid-July.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 1.24% for the day, China’s FTSE China A50 (CHA50) fell by 0.13%, Hong Kong’s Hang Seng (HK50) declined by 0.33%, and Australia’s S&P/ASX 200 (AU200) ended the day 0.55% positive.

Bank of Japan Governor Kazuo Ueda said yesterday that there is still some way to go before the central bank’s 2% inflation target is reached in a sustainable and stable manner, dampening speculation of a hawkish policy shift next week.

In Australia, the unemployment rate remained at 3.5%. The economy added 32,600 jobs over the past month, above the forecast of 15,000. Job growth in June left the employment-to-population ratio at a record high of 64.5%, reflecting resilience in the labor market. This is not good news for the RBA as the RBA’s goal now is to increase unemployment to reduce inflation.

China kept its benchmark lending rates unchanged in July at 3.55%. The five-year LPR, on which many lenders base their mortgage rates, was also unchanged from the previous reading of 4.2%. BofA Global Research on Thursday cut China’s economic growth forecast for this year to 5.1% from 5.7% due to disappointing gross domestic product (GDP) growth and a lack of response from the People’s Bank of China.

S&P 500 (F)(US500) 4,565.72 +10.74 (+0.24%)

Dow Jones (US30) 35,061.21 +109.28 (+0.31%)

DAX (DE40)  16,108.93 −16.56 (−0.10%)

FTSE 100 (UK100) 7,588.20 +134.51 (+1.80%)

USD Index  100.28 +0.34 (+0.34%)

• – Japan Trade Balance (m/m) at 02:50 (GMT+3);
• – China PBoC Loan Prime Rate at 04:15 (GMT+3);
• – Australia Unemployment Rate (m/m) at 04:30 (GMT+3);
• – Switzerland Trade Balance (m/m) at 09:00 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US Existing 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 ForexTime 

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By George Prior

The Bank of England will raise interest rates again next month despite UK inflation cooling, predicts the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The warning from deVere Group’s Nigel Green comes as fresh figures reveal that UK inflation fell to 7.9% in June, from 8.7% the month before.

He says: “Despite the data showing that the battle against inflation in the UK is being won, we expect the Bank of England will confirm it’ll continue with its aggressive interest rate hiking agenda at the monetary policy meeting on August 1.

“Although the consumer price index fell to 7.9% last month, amid lower petrol prices and a slowdown in the pace of growth for food, beverages and other basics, the central bank officials will likely argue that there is still work to be done.

“We believe the Bank will insist that although inflation is certainly coming down, it is doing so very, very gradually. It remains sticky – still the highest in the G7 – and a long way from the 2% target.

“They will say prices are still far too high and rising at a quicker pace than they have done in the past. In addition, they are likely to cite strong wage growth in the three months to May.”

He continues: “Against this backdrop, we expect the Bank of England to increase interest rates for a 14th consecutive time at its next policy meeting – and we wouldn’t be surprised if there were a second consecutive 50 basis point hike.”

Another interest rate hike could “pile on more misery” for households, homeowners, and businesses.

Higher interest rates lead to increased borrowing costs, making mortgages more expensive. Homeowners with variable-rate mortgages are likely to face higher monthly payments. Rising interest rates will also reduce disposable income as loan repayments increase, affecting household spending and overall economic activity.

Businesses reliant on borrowing may face higher interest expenses, which can affect their profitability and ability to expand or invest. In addition, higher interest rates can reduce consumer spending, affecting businesses dependent on consumer demand.

Hiked interest rates typically negatively impact the value of existing fixed-income investments, such as bonds, as newer issuances offer higher yields.

The higher rates also historically lead to stock market uncertainty and increase volatility, as investors reassess the attractiveness of different investments. Sectors sensitive to interest rates, such as housing, cars, and financial sectors, could experience greater impacts than others.

Nigel Green concludes: “We believe that although the battle to tame inflation seems to be being won, with the lowest reading in 16 months, the Bank of England is highly unlikely to be dissuaded from its course of rate hiking action for the time being.”

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 Tuesday’s stock market close, the Dow Jones Index (US30) increased by 1.06%, while the S&P 500 Index (US500) added 0.71%. The NASDAQ Technology Index (US100) closed positive by 0.76% yesterday. On Tuesday, stock indices posted strong gains as investors welcomed positive quarterly results from a number of major corporations, including Wall Street banks. At the same time, weaker-than-expected US retail sales data raised the stakes for weakening inflation in the country, which in turn should prompt the Federal Reserve to take a less hawkish stance in the coming months. There is a high probability that the US Fed will end its tightening cycle as early as its July meeting.

Morgan Stanley (MS) jumped by 6% after second-quarter results beat both top and bottom lines forecasts. Charles Schwab Corp (SCHW) topped the growth leaderboard, up more than 12% after posting better-than-expected quarterly results. Quarterly results from companies like Tesla (TSLA) and Netflix (NFLX) are expected today. Tesla’s quarterly results will likely focus on margins following the electric carmaker’s recent price cuts, while Netflix’s quarterly results will focus investor attention on subscriber growth.

Canada’s inflation rate fell to 2.8% from 3.4% year-over-year. Core inflation (which excludes food and energy prices) fell from 3.7% to 3.2% y/y. The sharp decline in inflationary pressures precludes further policy tightening by the Bank of Canada.

Equity markets in Europe were mostly up on Tuesday. Germany’s DAX (DE30) increased by 0.35%, France’s CAC 40 (FR40) gained 0.38% yesterday, Spain’s IBEX 35 (ES35) closed positive by 0.19%, and the UK’s FTSE 100 (UK100) closed up by 0.64%.

ECB officials are becoming less hawkish in their statements. If earlier almost all officials in one voice said about at least two rate hikes of 0.25% at each of them, now the tone of speech has changed, and now some politicians expect one rate hike of 0.25%, and the September decision will depend on incoming data. Apparently, the decline in global inflation, along with weak Eurozone GDP reports, made the officials reconsider their plans for further policy tightening.

Gold rose sharply yesterday after US retail sales rose less than expected in June, putting pressure on US Treasury yields and the US dollar. The US dollar’s overreaction to lower inflation and retail sales suggests that the market is in no mood to buy the dollar amid a growing view that the Fed is close to ending its tightening cycle. The market expects rate cuts from around mid-2024, with nearly five rate cuts by the end of next year. For gold and silver, this is a fundamental strengthening factor for the coming months.

Crude oil prices rose sharply on Tuesday after Chinese officials said the government would soon implement more pro-consumption policies, as data this week showed the country’s economy barely grew in the second quarter.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was up by 1.16% for the day, China’s FTSE China A50 (CHA50) decreased by 0.29%, Hong Kong’s Hang Seng (HK50) fell by 1.21%, and Australia’s S&P/ASX 200 (AU200) ended Tuesday positive by 0.42%.

New Zealand’s inflation rate fell from 6.7% to 6% on an annualized basis. Over the last quarter, the consumer price index posted a 1.1% increase, the lowest since the first quarter of 2021. The RBNZ said in its monetary policy review last week that it expects core inflation to fall, although it did not comment on when this might happen. Nevertheless, there will be additional inflationary pressures in the next quarter as the government’s fuel tax and public transport subsidy exemptions expire on July 1.

S&P 500 (F)(US500) 4,554.98 +32.19 (+0.71%)

Dow Jones (US30) 34,951.93 +366.58 (+1.06%)

DAX (DE40)  16,125.49 +56.84 (+0.35%)

FTSE 100 (UK100) 7,453.69 +47.27 (+0.64%)

USD Index  100.04 +0.10 (+0.10%)

• – New Zealand Consumer Price Index (q/q) at 01:45 (GMT+3);
• – UK Consumer Price Index (m/m) at 09:00 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – US Building Permits (m/m) at 15:30 (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 RoboForex.com

At Monday’s stock market close, the Dow Jones Index (US30) increased by 0.22%, while the S&P 500 Index (US500) added 0.39%. The NASDAQ Technology Index (US100) closed positive by 0.93%.

The Business Activity Index of New York State companies fell slightly in July, despite rising orders and easing inflationary pressures. The Federal Reserve Bank of New York’s General Business Conditions Index fell by 1.1 to 5.5 points. A value above zero indicates growth. The median forecast in a survey of economists suggested a drop of 3.5.

Investors are awaiting quarterly results from Bank of America (BAC) and Morgan Stanley (MS) today. Sentiment toward the biggest banks strengthened last week after JPMorgan Chase & Co (JPM) and Wells Fargo (WFC) reported better-than-expected quarterly results, though Citi was among those whose earnings fell short of analysts’ expectations. Tesla (TSLA ) is up more than 3% after starting production of its Cybertruck in Texas, with the electric vehicle maker expected to ship about 2,000 units this year. Tesla’s quarterly report is expected this Wednesday. Ford Motor (F) shares, meanwhile, fell more than -5% after the F-150 Lightning suffered a $10,000 price cut amid increased competition from Rivian Automotive Inc (RIVN) and Tesla Cybertruck. Shares of telecom giant AT&T (T) fell by -6% after banks Citi and JPMorgan downgraded them to “neutral” from “buy” amid concerns that the company and others will have to incur significant costs to remove old copper cables used for telephony and other related purposes, which some say could pose an environmental hazard.

Equity markets in Europe were mostly down on Monday. Germany’s DAX (DE30) decreased by 0.23%, France’s CAC 40 (FR40) lost 1.12% yesterday, Spain’s IBEX 35 (ES35) closed at its opening price, and the UK’s FTSE 100 (UK100) closed down by 0.38%. Sentiment in Europe was affected by data indicating a significant slowdown in economic growth in China, which is the main export market for major European companies. A number of speeches by ECB officials are expected this week. The comments will show what the central bank is thinking ahead of its next policy-setting meeting later this month.

Asian markets were mostly falling yesterday. Japan’s Nikkei 225 (JP225) was down by 0.09% for the day, China’s FTSE China A50 (CHA50) fell by 1.25%, Hong Kong’s Hang Seng (HK50) was not trading yesterday due to Typhoon Talim, and Australia’s S&P/ASX 200 (AU200) ended Monday negative 0.06%. Hong Kong’s Hang Seng Index fell sharply on Tuesday, catching up with the losses of its Asian peers after data showed a significant slowdown in China’s economic growth in the second quarter. Shares of major technology companies also suffered losses after strong gains last week. Baidu Inc (BIDU), Alibaba Group Holding Ltd (BABA), and Tencent Holdings Ltd – China’s BAT trio – lost between 1.8% and 3% drop. The weak economic data also raised the likelihood of additional stimulus measures from Beijing. There is information that the People’s Bank of China (RBA) may cut interest rates further and reduce its bank reserve requirements in the third quarter in an attempt to boost growth.

The RBA’s June monetary policy report showed that Australia’s central bank decided to leave interest rates unchanged because the policy was clearly restrictive, and there was a risk that a contraction in household finances could lead to a sharp downturn and higher unemployment. However, the bank maintained a warning that some tightening may be needed to contain inflation. The board considered raising the money rate by 25 basis points to 4.35% but then decided to pause

S&P 500 (F)(US500) 4,522.79 +17.37 (+0.39%)

Dow Jones (US30) 34,585.35 +76.32 (+0.22%)

DAX (DE40)  16,068.65 −36.42 (−0.23%)

FTSE 100 (UK100) 7,406.42 −28.15 (−0.38%)

USD Index  99.89 −0.02 (−0.02%)

• – Australia RBA Meeting Minutes (m/m) at 04:30 (GMT+3);
• – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US Retail Sales (m/m) at 15:30 (GMT+3);
• – US Industrial Production (m/m) at 16:15 (GMT+3).

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By JustMarkets

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.