Thursday's Markets Update (August 1, 2024)

01 Aug 2024 by rate3

On Thursday, stocks plummeted after economic data signaled weakening manufacturing and rising unemployment. Despite lower labor costs and Fed hints at potential rate cuts, investor concerns about the state of the global economy grew. Market calamities were exacerbated by rising Middle East tensions. Internationally, Eurozone unemployment increased, while the Bank of England cut its interest rate. BTC and ETH are in deep red, preparing to test 60K and 3.0K, as traders were affected by the stock market's rampage.

Details

Jobless claims unexpectedly jumped to a near-year high, signaling a weakening labor market. The increase bolsters expectations of a Federal Reserve interest rate cut. This comes as continuing claims also rose, indicating a broader trend of job losses. 1Y trend: "Up" (DOL)
Manufacturing continued its sharp decline in July. The ISM Manufacturing PMI plunged below expectations, marking the 20th contraction in 21 months. New orders and production plummeted, while employment fell for the second straight month. Rising input costs added to the sector's woes. 1Y trend: "Down" (ISM)
Job cuts declined in July 2024 compared to June, but still exceeded the previous year. The tech industry led layoffs, reflecting industry changes and overhiring. Overall job cuts are down slightly this year compared to last. 1Y trend: "Side" (CH)

Crypto

Kamala Harris' odds of winning the presidential election on Polymarket have reached a new high, with her chances now at 45%. This comes as her campaign gains momentum. In contrast, Donald Trump's odds have decreased to 53%, marking a drop of 10 percentage points since July 21st. (source)

World Markets

Eurozone unemployment ticked up to 6.50 percent in June, ending a downward trend. While this is a slight setback from a recent low, it's still far below the crisis-era peak. 1Y trend: "Side" (EC)
Eurozone manufacturing continues to struggle. July's PMI held steady at a low 45.8, indicating contraction. New orders plummeted, forcing cuts in jobs and production. While input costs rose, factories absorbed the burden instead of raising prices. Overall, the outlook remains bleak. 1Y trend: "Down" (PMI)
The Bank of England cut its interest rate by a quarter-point to 5%, but remains cautious. While inflation is cooling, the central bank is concerned about persistent price pressures. The decision was closely divided, reflecting the delicate balance between curbing inflation and supporting economic growth. 1Y trend: "Side" (BOE)
Italy's unemployment rate unexpectedly climbed to 7% in June, defying forecasts. While still historically low, this marks a slowdown in job growth. The number of unemployed increased slightly, offset by a small rise in employment. Youth unemployment remained stubbornly high at 20.5%. 1Y trend: "Down" (Istat)

Commodities

Gold prices dipped slightly to around 2440 today after recent gains, hovering near record highs. A potential easing of interest rates and escalating Middle East tensions are boosting gold's appeal as a safe haven investment. 1Y trend: "Up"