Thursday's Markets Update (July 27, 2023)

31 Jul 2023 by rate3

On Thursday, GDP data surprised to the upside, as did the surge in manufacturing orders. This reinforced bears' expectations of the Fed's next rate hike in September. NASDAQ dropped almost to 14K, followed by BTC, which retested 29K support.

Details: The economy grew at an annualized rate of 2.4% in the second quarter of 2023, beating expectations by far (1.8%). Nonresidential fixed investment jumped sharply (7.7% vs 0.6%), led by a rebound in equipment. Consumer spending decelerated (1.6% vs 4.2%) but still exceeded expectations. Public expenditure increased at a slower pace. Net trade weighed down on growth. Residential investment continued to decline.

In June, Durable Goods Orders for manufacturing skyrocketed by 4.7% compared to the previous month (2%), marking the most substantial increase since July 2020. This surge easily surpassed market expectations of a mere 1% rise. The driving force behind this surge was transportation equipment, which saw an impressive surge of 12.1%. Notably, this marks the fourth consecutive month of rising durable goods orders.

Commodities
Natural gas: Prices fell 4% on Thursday due to a combination of factors, including cooler weather expectations, lower gas exports, and increased gas storage.