SVET Reports
Wednesday's Markets Update (August 7, 2024)
On Wednesday, stocks went down, reversing yesterday's gains. Investors remain cautious about the economic outlook and company earnings. Tech and consumer stocks led the decline, with Tesla, Airbnb, Super Micro, and Disney posting significant shortfalls. Despite earnings, concerns about its park business dragged Disney down. Meanwhile, internationally, Japan's central bank's pledge to hold rates eased investor worries. BTC and ETH traders continued to follow the stock trades, dragging prices below 55K and 2.4K.
Details
Mortgage applications jumped 6.9% last week, fueled by a 27bps drop in 30-year mortgage rates to a 15-month low. Refinance applications surged nearly 16%, while purchase applications saw a modest 1% increase. The overall rebound erased the previous two weeks of declines. 1Y trend: "Down" (MB)
Crypto
In the past month, BTC whales have been buying substantial amounts of the cryptocurrency amid a market decline. Recent on-chain data shows that more than 404,448 BTC, worth around $22.8B, has been transferred to long-term holding addresses. (source)
World Markets
Japan's 10-year bond yield fell to around 0.86% from 1.1% after Bank of Japan Deputy Governor Shinichi Uchida signaled no immediate rate hike. Rising wages fuel inflation expectations, leading to market bets on two rate hikes this year. Earlier, yield tumbled on recession fears and yen carry trade unwinding, but this selloff seems overdone. 1Y trend: "Up"
Currencies
The Mexican Peso has weakened, surpassing 19.3, fueled by expectations of a hawkish central bank and a broader emerging market upswing. Despite recent export woes, investors await inflation data and a potential rate cut. While opinions on a rate cut are divided, a general easing trend is expected, supported by anticipated Fed rate cuts. 1Y trend: "Up"
The Brazilian real strengthened to 5.6 (from a low of 5.75), as positive global risk sentiment and hawkish central bank expectations emerged. July's inflation rate dropped to 4.45%, prompting a year-end 2024 inflation forecast adjustment to 4.12%. President Lula's new appointments may impact monetary policy and spark anticipated rate hikes. Additionally, Brazil's PMI reached its highest growth since June 2022, driven by strong expansion in both the manufacturing and service sectors, reinforcing the case for prolonged higher interest rates. 1Y trend: "Up"
In July, China’s exports grew by 7.0% YoY, down from 8.6% in June and below the 9.7% forecast. This was the slowest growth since April, with exports totaling 300.56B. Despite this, it marked the fourth consecutive month of rising sales, boosted by global demand. Notable increases were seen in exports to the US (8.1%), Taiwan (23.1%), and the EU (8.0%). For the first seven months of 2024, exports rose 4.0% to 2.07T. 1Y trend: "Up" (CN)