Friday's Markets Update (August 2, 2024)

02 Aug 2024 by rate3

On Friday, stocks continued to plummet, led by tech. A disappointing jobs report fueled recession fears. Amazon and Intel tanked on earnings misses. On global markets, the dollar dipped to a 4-month bottom, oil touched a 2-month low, and gold hit a new ATH on the growing probability of a recession. BTC and ETH are in deep red again, as traders succumb to bearish market sentiment.

Details

Unemployment unexpectedly jumped to 4.3% in July, the highest since October 2021. This surpasses forecasts and signals potential economic slowdown. Labor force participation slightly increased. 1Y trend: "Up" (BLS)
U-6 unemployment, which includes discouraged workers, hit 7.8% in July. This broader measure has fluctuated over the years, averaging 10.12%, peaking dramatically to 23% during the pandemic and reaching a low point of 6.5% in late 2022. 1Y trend: "Down" (BLS)
Factory orders unexpectedly plunged in June, driven by a sharp drop in transportation equipment orders. While some sectors saw growth, the overall decline raises concerns about manufacturing activity and potential economic slowdown. 1Y trend: "Up" (Census)
Vehicle sales increased to 15.82 million in July, up from 15.18 million in June. This follows a long-term average of 14.8 million since 1976, with sales peaking at 21.71 million in 2001 and plummeting to 8.48 million during the 2020 low. 1Y trend: "Up" (NADA)

Crypto

NFT market remains subdued. A new CoinGecko survey shows that over half of crypto investors don't anticipate an NFT resurgence. Only 19.4% of respondents expressed optimism. Despite this, gaming and metaverse NFTs are seen as the most promising sector. (source)

World Markets

Brazil's industrial output unexpectedly surged in June, reversing the previous month's decline. This growth exceeded market forecasts, signaling a potential economic upturn after a period of weakness. 1Y trend: "Up" (IBGE)
Mexico's unemployment rate ticked up to 2.8% in June, exceeding expectations. While the number of employed rose, so did the number of unemployed, pushing the jobless rate higher than last year. This slight increase signals potential economic softening. 1Y trend: "Down" (Inegi)
Global food prices dipped slightly in July, first time in 5 months, mainly due to cheaper cereals. However, increases in vegetable oil, meat, and sugar costs offset some of the decline. While wheat harvests improved in North America, production issues in Brazil pushed up sugar prices. Dairy prices remained relatively stable. 1Y trend: "Up"

Currencies

The dollar index plummeted to 4-months lows of 103.7 after a disappointing jobs report fueled expectations of Federal Reserve rate cuts. The weaker-than-expected labor market data contrasted with a surprise rate hike in Japan, boosting the yen and further pressuring the dollar. 1Y trend: "Up"

Commodities

Gold hit a record high at 2474 as fears of a recession grew. A weaker-than-expected US jobs report fueled bets on aggressive Fed rate cuts. Economic data and corporate earnings painted a gloomy picture, boosting safe-haven demand for gold amid geopolitical tensions. 1Y trend: "Up"
Oil prices plummeted 3%, hitting a two-month low. Weak economic data, including US job losses and manufacturing declines, overshadowed Middle East tensions. Iran's potential response to recent attacks adds uncertainty to the market. 1Y trend: "Up"

On Week 32, there will be released service sector and trade data while major companies report earnings. China, Europe, and several emerging markets will unveil inflation, trade, and growth figures. Central banks in Australia, India, and Mexico will set interest rates.