Thursday's Markets Update (July 18, 2024)

19 Jul 2024 by rate3

On Thursday, the stock market took a sharp downturn, with the DJ ending a week-long rally in a steep correction. Tech stocks led the decline. However, investors continued shifting money from high-flying tech companies to sectors expected to benefit from lower interest rates, especially small-cap stocks. Globally, the ECB held interest rates at 4.25% as Xi Jinping announced a plan to double the Chinese economy by 2035 through innovations. Meanwhile, BTC and ETH continued to consolidate in their narrowing zone of 64K-65K and 3.4K-3.5K due to traders' uncertainty.

Details

Jobless claims unexpectedly jumped to 243K, signaling a weakening labor market. This increase, combined with other data, suggests the Fed might cut interest rates in September. 1Y trend: "Up" (DOL)
Philadelphia manufacturing surged in July, beating expectations. Orders, shipments, and hiring improved significantly. However, both input and output prices rose. Businesses are optimistic about the next six months. 1Y trend: "Up" (Phil)

World Markets

The ECB held interest rates steady in July at 4.25%, as expected. Inflation is slowly cooling but remains above the 2% target. The ECB will keep rates high to fight inflation, but is ready to adjust if needed based on economic data. 1Y trend: "Up" (ECB)
Eurozone construction dropped 2.4% in May compared to the previous year. Overall, construction in the Eurozone has been unstable, with a record high in 2021 and a record low in 2020. 1Y trend: "Down" (Estat)

Currencies

The Chinese yuan weakened past 7.28 as investors waited for economic plans from China's leadership meeting. On the Third Plenum Xi Jinping called on the Communist Party to maintain "unwavering faith and commitment" to his strategic agenda and announced that he wants to double Chinese economy by 2035 through boosting innovation, supporting private businesses, and keeping things stable. However, a stronger dollar is also putting pressure on the yuan. 1Y trend: "Up"