Tuesday's Markets Update (July 16, 2024)

16 Jul 2024 by rate3

On Tuesday, stocks rose broadly, with the DJ hitting a new ATH. Investors were optimistic about possible Fed rate cuts, disregarding falling retail sales. Industrial stocks like Caterpillar and Boeing led the surge. On global markets, EU stocks are down as traders expected the ECB to diverge from Fed rate policies, while gold set a new price record. BTC and ETH hit resistance at 65K and 3.5K, retreating about 2% after a 2-day 'Trump rally.'

Details

Retail sales rose 2.3% in June, up from a revised 2.6% increase in May. This brings the average annual growth rate to 4.76%. The data marks an all-time high of 52.5% in April 2021 and a low of -19.9% in April 2020. 1Y trend: "Side" (Census)
The housing market index fell to 42 in July, its lowest point this year, as builders' sentiment dropped due to expectations of higher interest rates. The decline was driven by lower mortgage demand and reduced business conditions for constructors, who are also planning to cut home prices. Despite this, expected sales in the next six months edged up slightly. 1Y trend: "Side" (Nahb)
Business inventories rose 0.5% in May, exceeding forecasts, with a 1.6% year-over-year increase. Inventories increased at retailers (0.6%), wholesalers (0.6%), and manufacturers (0.2%). 1Y trend: "Side"

Crypto

Several top venture capitalists, business leaders, and tech executives, including Tyler and Cameron Winklevoss, have donated $8.75 million to a super PAC supporting Donald Trump's presidential campaign. The list also includes notable figures like Douglas Leone (Sequoia Capital), Joe Lonsdale (Palantir Technologies), and Troy Link (Protein Snacks). Elon Musk has publicly endorsed Trump's re-election campaign and may donate $45 million each month to the PAC. Trump has also announced Ohio Senator JD Vance as his running mate, who is a pro-crypto advocate and owns Bitcoin through Coinbase. (source)

World Markets

European stocks dipped for 2nd session as investors weighed regional economic worries and ECB holding its rate this week against potential Fed rate cuts. Travel stocks gained, but mining and luxury brands fell on profit concerns. 1Y trend: "Up"
Eurozone economic sentiment fell in July despite 10 months of gains. This suggests investors are less optimistic about growth, aligning with concerns about the slow recovery. 1Y trend: "Up" (ZEW)
German economic sentiment plunges to a four-month low (ZEW down to 41.8 in July) due to export slump, French instability, and unclear ECB policy. However, current business conditions show slight improvement. 1Y trend: "Up" (ZEW)
The IMF updated forecast: global economy +3.2% (2024) and +3.3% (2025, +0.1% from previous); US +2.6% (2024, vs 2.7%); EU (0.9%, 2024, previous 0.8%, including, Germany +0.2%, UK +0.7%); China +5% (vs 4.6%), India +7% (vs 6.8%), Japan +0.7% (vs 0.9%).

Currencies

The Chinese yuan weakened past 7.27 as disappointing economic indicators, including slower-than-expected growth and a property market downturn, dampened market sentiment. Investors await policy insights from the upcoming Third Plenum leadership conference, which will focus on longer-term economic and social issues. 1Y trend: "Up"

Commodities

Gold hit a record high above $2,460 per ounce as investors bet on central banks slowing down interest rate hikes due to lower inflation. 1Y trend: "Up"