Monday's Markets Update (July 14, 2023)

16 Jul 2024 by rate3

On Monday, the major market indexes rose, with the DJ hitting a new ATH and small-cap stocks surging. Energy, finance, and industrial sectors outperformed, while utilities, staples, and healthcare lagged. The market reaction was influenced by Powell's statement that the Fed will not wait until inflation reaches 2% and will consider cutting rates while working with 'long and variable lags.' Additionally, an assassination attempt on Trump boosted his election chances and the potential for tax cuts and deregulation. In the global markets, gold reached another ATH amid growing geopolitical instability. BTC surged to $65K on Trump's VP pick, pro-crypto Senator J.D. Vance. It was added by easing Mt. Gox worries and BlackRock's CEO showing BTC support.

Details

New York manufacturing contracted slightly more than expected in July (index -6.6). Some bright spots: stable orders, rising shipments, faster deliveries. Jobs and investment remain weak, but businesses are hopeful for a future rebound. 1Y trend: "Down" (NYFed)

World Markets

Euro Area Industrial Production dipped 2.9% in May YoY. On average, it's been at 0.91% since 1991, with a high of 41.4% in April 2021 and a low of -28.4% in April 2020. 1Y trend: "Down" (ES)
Nigeria's inflation rate soared to 34.19% in June, the highest since 1996, due to the removal of fuel subsidies and a weakening currency. Food prices surged to a record high, driven by increases in bread, potatoes, and fish. Other sectors, such as housing and utilities, also saw significant price hikes. Only clothing and recreation showed slight decreases. The annual core inflation rate reached a record high of 27.40%, with consumer prices rising 2.3% month-on-month. 1Y trend: "Up" (NG)

Currencies

The Indian rupee weakened to 83.6, near its record low, due to broad Asian currency weakness and the RBI's limited ability to support it. China's weak data and Japan's yen interventions boosted demand for harder currencies, reducing the RBI's room for action. With India's inflation rate above 5%, the RBI is expected to keep interest rates unchanged in upcoming meetings. 1Y trend: "Up"

Commodities

Gold prices surged to near-record levels above $2,420, following Powell's comments. Powell cited easing inflation pressures and a desire for sustainable progress towards the 2% target. Gold also rose due to concerns over political violence and its impact on market stability, and marked its third consecutive weekly gain amid expectations of a September rate cut. 1Y trend: "Up"