Friday's Markets Update (June 14, 2024)

14 Jun 2024 by rate3

On Friday, the stock market was mixed. Consumer confidence dipped and inflation worries rose, pulling down most sectors while tech stocks continued to shine. On global markets, EU stocks are down, again, while the dollar and gold are up. BTC and ETH keep falling, reaching 65K and 3.3K respectively, with ETH declining faster. Cosmos, Algorand, Polygon, and Avalanche declined by 4% and more.

Details

Consumer confidence dropped to a 7-month low in June (65.6), hurt by inflation fears and shaky income. The University of Michigan survey shows consumers are cautious about the future but see little change in current conditions. 1Y trend: "Up" (SCA)

World Markets

European markets plunged after a week of downfall. Political turmoil following the EU elections, particularly upcoming French elections, spooked investors. Fears of uncontrolled spending by a potentially stronger National Rally hurt stocks, especially financial and luxury brands. 1Y trend: "Up"
India's wholesale inflation jumped to 2.61% in May, exceeding expectations and marking the highest rate in 15 months. This rise was driven by a surge in food prices, particularly vegetables, and a rebound in manufacturing after a long period of decline. Fuel price increases were modest. 1Y trend: "Up" (Nic)
After raising rates in March, the Bank of Japan kept them steady at around 0% to 0.1% in June but hinted at reducing future bond purchases. While the economy shows moderate recovery, some areas remain fragile. Inflation is around the target but driven by external factors. The Bank aims to allow for more flexibility in long-term interest rates. 1Y trend: "Up" (BOJ)
France's inflation rose slightly to 2.3% in May, exceeding forecasts. Food and energy prices climbed, while services and manufactured goods remained mostly steady. Monthly inflation was flat, with rising food costs countered by falling energy prices. EU-harmonized figures showed a similar trend, with a slightly lower annual rate than initial estimates. 1Y trend: "Down" (Insee)

Currencies

The dollar is rising for a second week in a row as investors fear the Fed will maintain high interest rates. This comes despite recent signs of cooling inflation and increased unemployment claims. 1Y trend: "Up"
Brazil's currency weakened to 5.38 due to government plans to increase spending. This follows a recent slump and worries about inflation. The president's decision to prioritize spending over deficit reduction is causing skepticism in the market. 1Y trend: "Up"
The Japanese yen fell to near a 34-year low, again, after the Bank of Japan surprised markets by keeping interest rates steady. 1Y trend: "Up"

Commodities

Gold prices rebounded above $2,310, reversing an earlier dip. This was fueled by lower-than-expected US inflation data, suggesting the Federal Reserve might hold off on raising interest rates. While some Fed officials predict a rate cut, others foresee none this year. 1Y trend: "Up"

On Week 25, data on spending, housing, and manufacturing is key. Central bank decisions around the world are in focus, especially in China where a flood of economic data is expected. Inflation and consumer confidence are also important, particularly in the UK.