Weekly Market Recap: Global Markets Mixed as Tech Giants See Sharp Share Swings 

In Q2 2024, France’s GDP grew by 0.3%, while Germany’s fell by 0.1%. The euro area maintained 0.3% growth. US job openings exceeded expectations, but nonfarm payrolls added only 114,000 jobs, with the unemployment rate rising to 4.3%. China’s manufacturing sector faced pressure, and Australia’s retail sales showed modest growth. The Bank of Japan raised interest rates, and the Federal Reserve hinted at potential cuts.

Meta Platforms Inc. saw the biggest share rise, nearly 7%, due to AI-driven ad targeting improvements, while Intel Corp. experienced the largest decline, with shares plunging 32% due to struggles in the AI market.

France’s Gross Domestic Product (GDP) q/q

In the second quarter of 2024, France’s GDP grew by 0.3%, consistent with the previous quarter’s growth. A slight rise in gross fixed capital formation and stable household consumption drove this increase. Foreign trade also contributed positively, with stable imports and dynamic exports increasing by 0.6%. Changes in inventories did not impact GDP growth. Overall, final domestic demand and foreign trade were key to sustaining the country’s economic expansion.

Germany’s Gross Domestic Product (GDP) q/q

According to Destatis, Germany’s GDP fell by 0.1% in the second quarter of 2024 compared to the previous quarter, which had seen a 0.2% rise. This decline was attributed to decreased machinery, equipment, and construction investments.

Europe’s Gross Domestic Product (GDP) q/q

In the second quarter of 2024, the euro-area economy exceeded expectations as strong growth in key countries offset Germany’s unexpected contraction. This resilience helped the region maintain its progress despite challenges in its largest economy. According to Eurostat’s preliminary flash estimate, the European Union’s statistical office, the seasonally adjusted GDP rose by 0.3% in both the euro area and the EU during the second quarter of 2024 compared to the previous quarter. This growth matches the 0.3% increase observed in both regions during the first quarter of 2024.

JOLTS Job Openings (USD)

In June, the US Bureau of Labor Statistics reported that the number of job openings came in at 8.1 million, exceeding analysts’ expectations but still lower than the 8.23 million reading of last month. The hires and total separations also showed little change, with 5.3 million hires and 5.1 million separations.

The job openings rate remained at 4.9 percent. There was an increase in job openings in accommodation and food services (+120,000) and in state and local government, excluding education (+94,000). However, the number of job openings decreased in durable goods manufacturing (-88,000) and the federal government (-62,000).

CB Consumer Confidence Index (USD)

The Consumer Confidence Index, measures consumer sentiment on the economy, jobs, and finances. In July 2024, the index rose to 100.3 from 97.8 in June. The Present Situation Index, reflecting current business and labor market conditions, declined slightly, while the Expectations Index, indicating short-term outlook, improved but still below 80. Despite this, concerns about high prices, interest rates, and future economic conditions persist. The survey highlights ongoing consumer caution amid economic uncertainty.

China Manufacturing PMI (CNY)

China’s Manufacturing PMI came in at 49.4. The PMI Quarterly report for July 2024 shows China’s manufacturing sector faced continued downward pressure in Q2 2024, with the PMI dropping below 50 in May and June. Large enterprises slowed, while small and medium enterprises contracted. Manufacturing output and market demand weakened, and industrial product prices fell amid high input costs. Employment in the sector slightly decreased.

China Non-Manufacturing PMI (CNY)

The NBS Non-Manufacturing PMI in China fell to 50.2 in July 2024 from 50.5 in June, in line with market expectations. This signifies the 19th straight month of growth in the service industry, albeit at the most sluggish rate since November.

Australia Retail Sales m/m (AUD)

The most recent release of retail trade data for Australia in June 2024 indicates a 0.5% increase in seasonally adjusted turnover, reaching $36.2 billion compared to the previous month. Retail sales rose by 2.9% compared to June 2023. However, in volume terms, the seasonally adjusted estimate fell by 0.3% in the June quarter of 2024.

Japan BOJ Interest Rate Decision (JPY)

The Bank of Japan (BOJ) has raised its benchmark interest rate to around 0.25%, up from the previous range of 0 to 0.1%. In addition, the BOJ plans to reduce its monthly bond purchase amount to about ¥3 trillion by the first quarter of 2026, roughly half the current pace of bond buying. The USDJPY shows high volatility, with a 16-week streak of reaching lower lows.

USA ADP Nonfarm Employment Change (USD)

In July 2024, the ADP National Employment Report indicated a 122,000 increase in private sector jobs, with annual pay rising by 4.8% year-over-year. This data, derived from anonymized payroll records of over 25 million US employees, shows continued, albeit slowing, job growth and wage gains. The report highlights that goods-producing industries added 37,000 jobs while service-providing sectors added 85,000 jobs. Regionally, the South saw the largest employment gain, with 55,000 new jobs.

Canada GDP m/m (CAD)

In May 2024, Canada’s real GDP grew by 0.2%, led by a 1.0% rise in manufacturing. Goods-producing industries increased by 0.4%, while services edged up 0.1%. Retail trade fell by 0.9%, the largest detractor. Preliminary data suggests a 0.1% GDP increase in June, indicating a 0.5% growth for Q2 2024.

USA Pending Home Sales m/m (USD)

In June, pending home sales in the US increased by 4.8%, with all four regions seeing monthly gains. However, pending home sales declined year-over-year in all regions.

USA Fed Interest Rate Decision (USD)

Meeting economists’ and investors’ expectations, the Federal Reserve recently maintained its interest rates but suggested a potential rate cut in the near future. As reported by Bloomberg, the Fed kept the federal funds rate within the 5.25% to 5.5% range, the highest in over 20 years. They hinted that if economic data continues to indicate easing inflation, a rate cut could be implemented as early as their next policy meeting in September.

UK BoE Interest Rate Decision (GBP)

The Bank of England has lowered interest rates for the first time since early 2020, cutting its main rate by a quarter-point to 5% from 5.25%. The decision was made by a narrow 5-4 vote among its nine-member Monetary Policy Committee. Despite ongoing price pressures in the services sector, which constitutes around 80% of the UK economy, the overall inflation rate has hit the bank’s 2% target.

USA ISM Manufacturing PMI (USD)

In July, the Manufacturing PMI decreased to 46.8 percent from June’s 48.5 percent, indicating a continued contraction in the manufacturing sector. However, despite this decline, the overall economy expanded for the 51st consecutive month, as a PMI above 42.5 percent generally indicates economic growth.

Nonfarm Payrolls

In July, job growth in the US was lower than expected, with only 114,000 jobs added, compared to the estimated 185,000. The unemployment rate rose to 4.3%, its highest since October 2021. Average hourly earnings rose by 0.2% for the month and 3.6% over the year, both falling below expectations.

According to the Energy Information Administration, in the week ending July 26, 2024, US Commercial Crude Oil inventories fell by 3.4 million barrels to 433.0 million, 4% below the five-year average. Overall, commercial petroleum inventories dropped by 2.4 million barrels. Crude Oil registered a 3.4% weekly decline.

Gold concluded the week on Friday with a 2.32% weekly rise amid geopolitical tensions, a weakening US Dollar, and upcoming rate cuts.

• S&P 500 declined by 2.5%
• DJIA was down by 2.5%
• NASDAQ 100 retreated by more than 3.36%

McDonald’s announced its second-quarter earnings on Monday, falling short of Wall Street’s expectations of $6.63 billion. This underscores the difficulties the fast-food leader faces as consumers become increasingly price-conscious. However, McDonald’s saw its share rise by 10%.

Merck & Co.’s shares fell sharply due to disappointing Gardasil HPV vaccine sales in China, overshadowing its better-than-expected second-quarter profit and sales. The decline was driven by distributor issues affecting Gardasil shipments. However, acquisition costs led to a reduced profit outlook for 2024. 

BP announced strong second-quarter results, surpassing market expectations in both profits and revenues. The company also declared a 10% increase in its quarterly dividend and maintained its $3.5 billion share buyback program. However, BP’s shares declined by 3.3%. 

Pfizer raised its 2024 profit forecast, buoyed by strong sales from newly acquired cancer drugs, including $845 million from Seagen Inc. Despite a muted stock reaction, Pfizer’s Q2 earnings and revenue beat expectations. The company is also on track with a cost-cutting program set to save $4 billion this year. Pfizer aims to offset declines in Covid-related sales and is advancing a weight-loss pill to rival Novo Nordisk’s Wegovy. The company beat analysts’ average estimates of 46 cents by reporting second-quarter earnings of 60 cents per share, and its revenue of $13.3 billion exceeded analysts’ expectations. Nevertheless, Pfizer’s stock fell by 1.08%. 

Starbucks reported earnings that met expectations, easing investor fears after a previous slump. Although comparable sales dropped 3% for the second straight quarter, higher spending per visit in the US helped stabilize revenue. Earnings per share were slightly above expectations at 93 cents. Sturback’s stock increased by 2.5%. 

 Meta Platforms Inc. exceeded Q2 sales expectations, reporting $39.1 billion, thanks to AI-driven ad targeting improvements. This success supports CEO Mark Zuckerberg’s investments in AI and the metaverse. User numbers across Meta’s apps hit 3.27 billion, boosting investor confidence and leading to a nearly 7% rise in shares. Meta persists in making substantial investments in AI infrastructure and development despite the difficulty of reconciling long-term investments with immediate returns. Meta concluded the week with a 4.8% increase. 

Apple Inc. (AAPL) reported increased earnings for its third quarter, surpassing analyst expectations. The company earned $21.45 billion, or $1.40 per share, up from $19.88 billion, or $1.26 per share, in the same period last year. Analysts had projected earnings of $1.35 per share. Additionally, Apple’s revenue for the quarter rose by 4.9% to $85.78 billion, compared to $81.80 billion last year. Apple’s shares rose by 0.7%. 

Amazon.com Inc. announced increased spending on artificial intelligence, causing a 7% drop in shares due to lower-than-expected profit projections. The company spent $30.5 billion on capital expenditures in the first half of the year, with plans for more in the second half. While Amazon Web Services (AWS) performed well, 19% sales growth, the e-commerce business faced challenges with softer consumer spending and lower-than-expected revenue from seller services and advertising. Amazon’s stocks plummeted by more than 8%. 

Intel Corp. announced plans to cut over 15% of its workforce and suspend dividend payments due to struggles in the AI market, causing a 19% stock drop. The company projected lower-than-expected quarterly sales of $12.5 billion to $13.5 billion, below analysts’ $14.38 billion estimate. Despite heavy investments in new plants, Intel’s revenue and profits lag behind AI-focused competitors like Nvidia and AMD. The company plans to reduce spending on new facilities next year while aiming to enhance its manufacturing and product offerings. Intel’s shares plunged by 32%. 

Snap Inc. shares fell 17% after disappointing second-quarter sales of $1.24 billion and a lower-than-expected profit outlook. Despite strong user growth, with Snapchat reaching 432 million daily active users, the company faced a weaker brand advertising environment. Snap is investing in AI and machine learning to improve ad targeting, content recommendations, and new product development. The company reported a net loss of $248.6 million, improving from a $377.3 million loss a year earlier. Snap’s shares declined by more than 30%. 

Exxon Mobil reported a second-quarter profit of $9.2 billion, which exceeded expectations. This was attributed to higher oil prices and increased production following its acquisition of Pioneer Natural Resources. The company’s profit of $2.14 per share outperformed analysts’ estimates. This strong performance was driven by record output in Guyana and the Permian Basin despite weaker refining margins. Exxon Mobile’s shares rose by 0.4%. 

Q2 2024 showcased a complex global economic landscape. France saw modest GDP growth, while Germany experienced a slight contraction, reflecting varied economic health within the euro area, which maintained steady overall growth. In the US, job market indicators were mixed, with job openings surpassing expectations but nonfarm payroll growth falling short, leading to a higher unemployment rate.

China’s manufacturing sector continued to struggle, and Australia’s retail performance showed limited gains. Financial markets mirrored these mixed signals, with Meta Platforms enjoying a significant share price boost from advancements in AI, contrasted by Intel’s substantial decline due to challenges in the same field. The period underscores the intricate and varied dynamics shaping the global economy.