Weekly Recap: Global Markets Juggle Mixed Signals

The week featured a mix of economic data releases and market activity across major economies. In Germany, business sentiment continued to decline, with the Ifo Business Climate Index reflecting growing pessimism, while the US saw a significant increase in durable goods orders driven by transportation equipment. Japan’s retail sales growth slowed, and China’s manufacturing PMI hit a six-month low, signaling ongoing economic challenges. The US economy showed resilience with a 3% GDP growth in Q2, while gold and oil markets experienced fluctuations. Notably, Nvidia and HP Inc. reported earnings with mixed market reactions, highlighting the continued volatility in the tech and retail sectors.

11:30 am – Germany: Ifo Business Climate (EUR)

The manufacturing sector saw a significant drop, with companies less satisfied with their current situation and reporting declining order backlogs. The service sector also experienced a decline in business climate due to worsening expectations. While the trade sector saw a slight improvement, it was mainly driven by less pessimistic expectations. The construction sector remained stable, with a slight increase in satisfaction offset by declining expectations. Overall, the data suggests that the German economy is increasingly facing challenges, with sentiment deteriorating across multiple sectors.

The ifo Business Climate Index in Germany decreased from 87.0 points in July to 86.6 points, despite surpassing economists’ forecasts, reflecting growing pessimism among companies.

The US Dollar Index had a daily change of +0.18%.

15:30 – USA: Durable Goods Orders m/m (USD)

In July 2024, the US Census Bureau reported a significant increase in new orders for manufactured durable goods, rising by 9.9% to $289.6 billion, driven primarily by transportation equipment. This marks the fifth increase in the past six months, following a 6.9% decline in June. Shipments also saw a 1.1% rise to $291.1 billion, while unfilled orders and inventories experienced modest growth. Notably, nondefense capital goods orders surged by 41.9%, indicating strong demand in this sector. The report highlights ongoing fluctuations in the manufacturing industry, with transportation equipment playing a central role in recent growth.

The EURUSD exchange rate decreased by 0.3%.

09:00 am – Germany: GDP q/q (EUR)

Germany’s GDP contracted by 0.1% in the second quarter of 2024 compared to the previous quarter, reflecting a slowdown in the economy. Year-on-year, GDP saw a modest increase of 0.3%. The decline was driven by a significant drop in capital formation, particularly in machinery and construction, as well as a slight decrease in exports. Despite stable consumption expenditure and a rise in government spending, the overall economic performance was weaker, with notable declines in the construction and manufacturing sectors.

The EURUSD exchange rate saw an increase of 0.2%.

17:00 – USA: CB Consumer Confidence Index (USD)

In August, consumer confidence rose slightly, with the Consumer Confidence Index increasing to 103.3 from 101.9 in July. Consumers were more positive about current business conditions but showed increased concern about the labor market. While optimism about future business conditions improved, expectations for the labor market and income growth were more pessimistic. Inflation expectations dropped to their lowest since March 2020, but concerns about prices and unemployment remained significant. Overall, confidence was higher among older and higher-income consumers, while younger and lower-income groups expressed declining confidence.

The US Dollar Index declined by 0.3%.

17:30 – USA: EIA Crude Oil Stocks Change (USD)

US crude oil refinery inputs increased slightly to 16.9 million barrels per day, with refineries operating at 93.3% capacity. Gasoline production decreased while distillate fuel production rose. Crude oil imports and overall petroleum inventories declined, with crude stocks 4% below the five-year average. US commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 0.8 million barrels from the previous week. Over the past four weeks, total product supply fell by 2.9% year-over-year, with slight increases in gasoline supply but declines in distillate and jet fuel supplies.

The US Dollar Index increased by 0.5%.

15:30 – USA: GDP q/q (USD)

The US economy grew at a 3% annualized rate in Q2 2024, slightly higher than the initial estimate of 2.8%, due to stronger consumer spending. Personal spending increased by 2.9%, up from the previous 2.3% estimate. Gross domestic income (GDI) rose by 1.3%, matching the first-quarter gain. While growth has slowed compared to late 2023, the Federal Reserve is expected to lower interest rates soon, potentially aiding sectors like housing and manufacturing.

The US Dollar Index rose by 0.33%.

15:30 – USA: Unemployment Claims (USD)

In the week ending August 24, 2024, US initial unemployment claims slightly decreased to 231,000, while the insured unemployment rate remained steady at 1.2%. The four-week moving average for claims also declined, reflecting a stable labor market. Despite some state-level variations, overall unemployment claims saw minimal changes, indicating continued stability in jobless benefits claims across the country.

The EURUSD exchange rate saw a daily decline of 0.4%.

02:50 am – Japan: Retail Sales m/m (JPY)

Japan’s retail sales grew by 2.6% year-on-year in July 2024, down from 3.8% in June and below the expected 2.9%. On a monthly basis, sales increased by 0.2%, which was slower than June’s 0.6% rise.

The USDJPY rose by 0.82%.

04:30 am – Australia: Retail Sales m/m (AUD)

In July 2024, retail turnover remained stable month-on-month, with a 0.0% change, but increased by 2.3% compared to July 2023.

The AUDUUSD declined by 0.28%.

15:30 – Canada: GDP q/q (CAD)

In the second quarter of 2024, real GDP grew by 0.5%, slightly up from 0.4% in the first quarter, driven by increased government spending, business investment, and household spending on services.

The USDCAD ticked higher by 0.02%.

16:30 – USA: Core PCE Price Index m/m (USD)

The Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) Index, showed a modest 0.2% increase in July, maintaining the annual inflation rate at 2.5%. This aligns with expectations and reinforces the likelihood of the Fed cutting interest rates at its next meeting. As inflation continues to cool, the focus has shifted to the labor market for signs of potential economic weakness.

04:00 am – China: Manufacturing PMI (CNY)

China’s manufacturing activity hit a six-month low in August, with the PMI at 49.1, indicating continued contraction. Factory prices fell sharply, and orders remained weak, prompting policymakers to shift focus from infrastructure to household stimulus. While retail sales improved slightly, the ongoing property slump and export challenges threaten growth.

Crude Oil
US Crude Oil refinery inputs rose to 16.9 million barrels per day, with refineries at 93.3% capacity. Crude imports averaged 6.6 million barrels per day, and commercial crude inventories decreased by 0.8 million barrels. Total petroleum inventories dropped by 3.1 million barrels, while product supply averaged 20.6 million barrels per day, down 2.9% from last year.

Crude Oil closed the week with more than 3% decline.

Gold
Gold has surged 22% this year, driven by central bank purchases, geopolitical tensions, and physical demand. Recent gains are also fueled by expectations of Federal Reserve rate cuts, with future gold momentum depending on the pace and size of these cuts.

The precious metal Gold (XAUUSD) concluded the week on Friday with a 0.33% weekly decline.

Stock Market

• S&P 500 declined by 0.4%
• DJIA was up by 0.6%
• NASDAQ 100 declined by 1.39%

Top Gainers

• BranchOut Food Inc. (BOF) 207.69%
• MEDIROM Healthcare Technologies Inc. (MRM) 113.31%
• VOXX International Corporation (VOXX) 88.66%

Top Losers

• NuCana plc (NCNA) -52.65%
• Paltalk, Inc. (PALT) -41.21%
• Sunlands Technology Group (STG) -39.06%

Wednesday, August 28: HPQ (HP Inc.)
Wednesday, August 28: NVDA (NVIDIA Corp.)
Thursday, August 29: GAP (Gap Inc.)

HP Inc. shares declined in after-hours trading after the company reported third-quarter earnings of $0.83 per share, missing the expected $0.86. Despite this, revenue grew by 2.4% to $13.52 billion, surpassing forecasts. The company projected lower-than-expected earnings for Q4 2024. HPQ returned $900 million to shareholders through dividends and buybacks and increased its share repurchase authorization to $10 billion.

HPQ grew by 1.46% from the previous week.

Nvidia exceeded Wall Street expectations in the second quarter with $30 billion in revenue, driven by strong demand for its AI chips. Despite this, shares fell 6% in after-hours trading due to high pre-earnings expectations. Nvidia announced that its next-generation Blackwell chips will ship in the fourth quarter, contributing to anticipated strong sales. The company dominates the AI chip market, controlling 90%, which has fueled a significant stock (NVDA) rally, doubling its value this year.

Nvidia had a weekly decline of 7.73%.

Gap Inc. (GAP) exceeded sales expectations in the second quarter, with net sales rising 5% to $3.7 billion and comparable sales increasing 3% across its brands, including Old Navy and Athleta.

The stock price experienced an intraday decline of 7%, but compared to the previous day, GAP rose by 1.65%.

Gap was down by 8.9% compared to the previous week.

The week showcased a mix of economic data and market activity across major economies, highlighting continued challenges and volatility. While Germany’s business sentiment deteriorated, the US saw a robust increase in durable goods orders. Japan and China’s economic indicators pointed to ongoing struggles, with retail sales growth slowing in Japan and manufacturing activity contracting in China. Despite this, the US economy showed resilience with solid GDP growth in Q2. In the markets, gold and oil faced fluctuations, and company earnings, particularly from Nvidia and HP Inc., reflected the ongoing volatility in tech and retail sectors.