Friday's Markets Update (July 19, 2024)

19 Jul 2024 by rate3

On Friday, stocks tumbled, led down by tech. A major IT outage and mixed earnings reports contributed to the decline. The S&P and Nasdaq faced their worst week since April, while the Dow bucked the trend. Investors are shifting towards smaller companies due to potential Fed rate cuts and China trade tensions. On global markets, EU stocks dropped sharply on growing worries about tariffs as oil tumbled due to temporarily easing Middle East tensions. On crypto markets, it looks like we are experiencing the 'BTC Conference Rally.' The conference starts in a week, so BTC and ETH might accelerate during this period and then bounce down on aggressive profit-taking.

Crypto

Trump criticized El Salvador's president during his RNC speech, accusing him of sending criminals outside of a country. Trump questioned the drop in El Salvador's murder rate and claimed it was due to them exporting their criminals to America, rather than attributing it to successful crime prevention efforts. However, some commentators saying, it might be just a glitch. (source)

World Markets

European stocks dropped sharply again today, marking a fifth straight day of losses. Tech stocks, especially chipmakers, were hit hard by potential trade restrictions and a global tech outage. ASML and Infineon suffered big losses, while automakers also declined. 1Y trend: "Up"

Currencies

The Chinese yuan weakened as investors waited for details on the government's economic plans. President Xi Jinping emphasized market-oriented reforms based on "lifting restrictions and implementing effective regulations" and high-quality growth. China aims to double its economy by 2035. However, the yuan is pressured by a strong dollar. 1Y trend: "Up"

Commodities

Gold prices fell as the dollar strengthened due to positive economic data. However, expectations of interest rate cuts by the Fed are very high (98% chance of the Sept's cut), supporting gold's overall upward trend. 1Y trend: "Up"
Oil prices dropped sharply to around $80.5 due to a stronger dollar, China's weak economy, and hopes for a Gaza ceasefire. These factors outweighed tightening supply concerns. 1Y trend: "Up"
Uranium prices are in a correction despite to a growing supply concerns. Russia, a major supplier, is sanctioned, and Kazakhstan, the top producer, increased taxes. Meanwhile, demand is rising as countries like the US, China, and Japan expand nuclear power (20 countries announced plans to triple their nuclear power by; China is building 22 of 58 global reactors). 1Y trend: "Up"
Lithium prices plummeted to 3-years low due to oversupply. Increased production, government subsidies, and new reserves worsened the glut. Chile plans to double output, adding pressure. Meanwhile, EU and US tariffs on Chinese EVs hurt battery demand, further impacting lithium prices. 1Y trend: "Down"
Aluminum prices are on 3-moths-low due to oversupply from China. Better weather boosted Chinese production, while weak domestic demand forced manufacturers to export excess aluminum. 1Y trend: "Up"

On Week 30, key growth, inflation, and spending figures, plus earnings from major companies will be released. Europe and Asia publish manufacturing and services data, with Germany adding confidence indices. Central banks in Canada, Turkey, and China make interest rate decisions, while South Africa reports inflation and South Korea releases GDP.