Tuesday's Markets Update (July 23, 2024)

23 Jul 2024 by rate3

On Tuesday, stock market indexes were mostly unchanged despite slowed manufacturing activity and a sharp drop in home sales. Meanwhile, investors await key earnings reports as some companies, including Coca-Cola, Danaher, GE, Philip Morris, and Lockheed Martin, have reported strong results. In contrast, others, such as UPS and GM, impacted by EV delays, slumped due to poor earnings. On the global market, oil prices hit a one-month low amid continuing ceasefire efforts in Gaza, while the Indian rupee fell to an all-time low, undermined by the Bank of China's rate cut. BTC and ETH uncharacteristically decoupled, with the latter supported by the ETH ETF launch, while the former continued to stay in the red, dipping below 66K.

Details

Manufacturing in the Fifth District (Richmond) continued to worsen in July, reaching the lowest point since May 2020. Shipments, orders, production, investment, and jobs declined, while price pressures eased. Business optimism also faded. 1Y trend: "Down" (FRich)
Existing home sales dropped sharply in June, marking the fourth straight decline. Prices hit a record high, but inventory rose, shifting the market from seller's to buyer's favor. Homes are taking longer to sell, and buyers are more cautious. 1Y trend: "Down" (Nar)

Crypto

The SEC gave a green light for VanEck Ethereum ETF as Grayscale Launches ETH ETFs on NYSE. Major players are jockeying for position amid speculation of a price surge. However, concerns linger as large investors shift assets and dormant accounts reactivate, potentially signaling market volatility. (source)

Currencies

The Indian rupee hit a record low (83.7) in late July, pressured by a weak Asian currency market. While India's budget boosted investor confidence, the Chinese central bank's rate cut limited the RBI's ability to support the rupee. Despite record foreign exchange reserves, the rupee weakened due to increased competition from other Asian economies. 1Y trend: "Up"
The Mexican peso has weakened beyond 18 due to a slowing economy, with retail sales declining and economic activity indicators showing challenges. Expectations of a rate cut and potential economic reforms have also contributed to the peso's depreciation. The IMF has lowered its growth forecast for Mexico, further pressuring the peso. 1Y trend: "Up"

Commodities

Oil prices dropped for the fourth day, hitting a one-month low (under 77). This is due to progress in Israel-Hamas ceasefire talks and weak gasoline demand. Crude and gasoline inventories are expected to decline, but OPEC+ is unlikely to change production levels. 1Y trend: "Up"