Wednesday's Markets Update (August 14, 2024)

14 Aug 2024 by rate3

On Wednesday, stocks were mostly unchanged after the CPI report met expectations. Tech stocks led gains while utilities lagged. Microsoft, Apple, Nvidia, Amazon, and Meta rose, while Alphabet and Tesla fell. Internationally, steel prices reached an eight-year low due to weak Chinese demand. BTC and ETH continued to trade in a narrowing range around 60K and 2.7K as traders awaited signals from broader markets.

Details

Inflation cooled to 2.9% YoY for the fourth straight month in July, hitting a two-year low. Prices for shelter, transportation, and apparel fell. However, energy costs rose slightly. Core inflation also declined. 1Y trend: "Down" (BLS)
30-year mortgage rates dropped to a five-month low (6.54%). This follows a recent decline in Treasury yields as investors anticipate Fed rate cuts. Jumbo mortgage rates increased slightly, while FHA rates remained unchanged. 1Y trend: "Up" (MB)

Crypto

The government has transferred $590 million worth of BTC seized from Silk Road to Coinbase. This is part of a larger 203,200 BTC stash valued at $12 billion. Future sales of these government-held Bitcoins could significantly impact the cryptocurrency market. (source)

World Markets

Eurozone economy grew 0.3% in Q2, matching Q1. France, Italy, and Spain led growth, while Germany unexpectedly shrank. Overall, Eurozone expanded 0.6% year-on-year, with expectations for 0.8% growth in 2023. 1Y trend: "Up" (EUROSTAT)
New Zealand's central bank unexpectedly cut interest rates by 25 bp to 5.25% for the first time in four years. Inflation has slowed down, bringing it back within the target range. This move signals a potential shift towards looser monetary policy. 1Y trend: "Side" (RBNZ)
Fitch downgraded Ukraine's credit rating to "Restricted Default" due to missed debt payments. The country is seeking debt restructuring amid the war. This downgrade negatively impacts Ukraine's ability to borrow money internationally.

Commodities

Steel rebar prices plunged to an eight-year low amid weak Chinese demand. The country's struggling real estate sector, coupled with new government regulations, led to a supply glut. To offset falling domestic sales, mills increased exports, further depressing prices. 1Y trend: "Down"