Weekly Market Recap: Key Economic Insights and Market Movements

The week of August 19-23, 2024, was marked by key economic indicators and market movements. Global markets saw notable shifts across various sectors. Canada’s inflation slowed, US crude oil inventory dropped, and France’s service sector experienced robust growth. Gold prices reached record highs amidst speculation about potential US Federal Reserve rate cuts, while the US stock market saw gains, particularly in the S&P 500. In corporate news, Baidu’s Q2 earnings met expectations, although the stock declined by 3.8% over the week.

Tuesday, August 20
Canada: CPI m/m (CAD)
In July, the Consumer Price Index (CPI) rose 2.5% year-over-year, marking the slowest growth since March 2021, down from 2.7% in June. The deceleration was driven by lower prices for travel services, passenger vehicles, and electricity. On a monthly basis, the CPI increased by 0.4%, with gasoline prices rising 2.4%, contributing to the overall monthly gain. Despite the overall slowdown, some areas, such as shelter and fuel oil, saw continued, though slower, price increases.

The USDCAD saw a daily change of -0.1%.

In the week ending August 16, 2024, US crude oil refinery inputs averaged 16.7 million barrels per day. Crude oil imports rose, but commercial crude inventories dropped by 4.6 million barrels, now 5% below the five-year average. Gasoline and distillate inventories also decreased, while propane/propylene inventories increased. Total petroleum inventories fell by 5.9 million barrels.

Crude Oil marked a daily decline of 1.89%.

France: Flash PMI (EUR)

In August 2024, France’s economy saw its strongest growth since March 2023, driven by a significant service sector expansion, which reached a 27-month high. The HCOB Flash France Composite PMI rose to 52.7, signaling overall economic growth. However, manufacturing continued to decline, with output falling to its lowest level in seven months. Despite the positive boost from the services sector, overall business confidence and employment prospects weakened.

The EURUSD decreased by 0.33% compared to the previous day.

Germany: Flash PMI (EUR)
In August 2024, Germany’s private sector remained in contraction, with the Composite PMI falling to 48.5, a five-month low. The manufacturing sector continued to struggle, while service sector growth slowed for the third consecutive month. Employment dropped at the fastest rate in four years, and new orders declined, reflecting weakening demand and economic uncertainty. Despite easing cost pressures, the outlook for future growth remains pessimistic.

UK: Flash PMI (GBP)

In August 2024, the UK private sector saw its fastest growth since April, with the Composite PMI rising to 53.4, driven by strong performance in both services and manufacturing. Business activity and employment increased while inflationary pressures eased, particularly in the service sector. The data suggests solid economic expansion and improved job creation, with moderated inflation supporting a positive outlook.

The GBPUSD had a daily change of +0.05%.

USA: Unemployment Claims (USD)
In the week ending August 17, 2024, US initial unemployment claims rose by 4,000 to 232,000, while the four-week moving average decreased slightly to 236,000. The insured unemployment rate remained steady at 1.2%, with the number of insured unemployed increasing to 1.863 million, marking the highest level since November 2021

The US Dollar Index increased by 0.39% compared to the previous day.

USA: Flash PMI (USD)
In August 2024, the US private sector continued to grow, with the Composite PMI at 54.1, slightly down from July. The services sector saw solid expansion while manufacturing output declined sharply to a 14-month low. Employment growth stalled, particularly in manufacturing, amid concerns over future demand. Inflation pressures eased, with prices rising at the slowest rate since June 2020, except for a brief dip in January.

USA: Existing Home Sales (USD)
In July 2024, US existing-home sales increased by 1.3%, ending a four-month decline. Sales rose in three of four major regions, with the Midwest remaining steady. Year-over-year, the Northeast and West saw gains, while the Midwest and South experienced declines. Despite the modest improvement, overall home sales remain sluggish.

New Zealand: Retail Sales q/q (NZD)

In the June 2024 quarter, New Zealand’s retail sales volume fell by 1.2%, continuing a downward trend over the past eight quarters. Eleven of the 15 retail industries saw declines, with the most significant drops in electrical goods, motor vehicles, and food services. Retail sales per person also decreased by 1.5%, marking the tenth consecutive quarter of decline.

The NZDUSD had a daily change of +0.3%.

USA: New Home Sales (USD)
In July 2024, US new home sales rose to a seasonally adjusted annual rate of 739,000, marking a 10.6% increase from June and a 5.6% rise from the previous year. The median sales price was $429,800, with a total of 462,000 new houses available for sale, representing a 7.5-month supply at the current sales pace.

The EURUSD exchange rate increased by 0.7%.

Commodities

Crude Oil
US crude oil inventories decreased by 4.6 million barrels to 426 million barrels in the week ending August 16, significantly more than the expected 1.5 million barrel drop. This decline, reported by the US Energy Information Administration, brings stocks to about 5% below the five-year average. Gasoline and distillate fuel stocks also fell by 1.6 million and 3.3 million barrels, respectively, as refinery capacity use increased to 92.3%.

Crude Oil had a 1.0% weekly decline.

Gold
The price of XAUUSD has risen by over 21% this year, reaching a record high with the spot price exceeding $2500 per troy ounce. This recent increase has been attributed to investor anticipation that the US Federal Reserve may start lowering interest rates in September, along with growing geopolitical tensions that have boosted demand for this safe-haven asset.

The precious metal Gold (XAUUSD) concluded the week on Friday with a 0.18% weekly increase.
Stock Market

• S&P 500 increased by 1.36%
• DJIA was up by 0.5%
• NASDAQ 100 increased by more than 1.0%

Company Earnings
Thursday, August 22, BIDU (Baidu Inc.)

Baidu’s Q2 2024 results show steady revenue at CN¥33.9 billion and a 5.3% increase in net income to CN¥5.49 billion, with EPS rising to CN¥15.70. Revenue met analyst expectations, while EPS slightly exceeded them. The company is forecasted to grow its revenue by 5.4% annually over the next three years, lower than the 10% industry average.

The stock price saw a 3.8% weekly decrease.

The week of August 19-23, 2024, presented a mixed economic landscape with varying degrees of growth and contraction across global markets. While key indicators such as Canada’s CPI and US crude oil inventories revealed significant economic shifts, the stock market showed resilience, led by gains in major U.S. indices. Despite positive earnings reports, some companies like Baidu faced stock declines, highlighting the complex interplay of market forces. Overall, the week’s data underscored ongoing challenges and opportunities within the global economic environment.