USA

The main U.S. stock indexes posted their strongest weekly gains of 2024, with the NASDAQ rising over 5%, the S&P 500 climbing 4%, and the Dow increasing by 3%. After this week's rebound, the S&P 500 is now just 2% below its mid-July record high. This week's data helped calm a nervous market. Retail sales data released on Thursday significantly exceeded economists' expectations, and weekly jobless claims dropped. Both indicators suggested that fears of a recession, which triggered a global sell-off earlier this month, were exaggerated. Additionally, inflation data released earlier this week reinforced optimism that a soft landing for the economy is still achievable.

In the 12 months ending in July, the Producer Price Index (PPI) rose 2.2%, down from a 2.7% increase in June. This slower-than-expected rise in July, driven by the largest drop in service costs in nearly 18 months, indicated weakening inflation pressures and bolstered hopes for an interest rate cut next month. Consumer prices increased 2.9% year-over-year, slightly lower than the 3% increase in June and the lowest rate since March 2021. Core inflation, which excludes food and energy, rose 0.2% month-over-month, in line with expectations. Retail sales in July surged by 1%, far surpassing the Dow Jones estimate of a 0.3% increase. Separately, weekly jobless claims also decreased. This data provided a boost to investors and the broader market, which was attempting to recover from an August slump linked to concerns about a slowing economy following the disappointing jobs report on August 2.

Europe

Last week, the indices closed in the green. The STOXX Europe 600 Index finished 2.46% higher. Among the major continental indices, France's CAC 40 gained 2.48%, and Spain’s IBEX 35 rose by 2.66%. The UK’s FTSE 100 Index increased by 4.09%, while Germany's DAX closed 3.38% higher. Eurozone industrial output declined for the third consecutive month in June, highlighting the persistent challenges facing the sector. Industrial activity in the currency union decreased by 0.1% in June, following a 0.9% drop in May, according to data released by Eurostat on Wednesday. This performance was much weaker than the 0.6% increase anticipated by economists surveyed by The Wall Street Journal and leaves factory output below pre-war levels, dating back to Russia's invasion of Ukraine in early 2022.

The sector has struggled to rebound from the energy shock caused by the war, despite early 2024 optimism that lower energy prices might fuel a recovery. The downturn has been particularly severe in Germany, the eurozone’s largest economy, which has a significant energy-intensive industrial base. Recent declines in industrial production pushed Germany's economy into contraction in the second quarter of the year.

Japan

Japanese stocks led the gains in Asia on Friday, marking their best weekly performance in four years. This followed a rally on Wall Street, where new economic data alleviated fears of a recession. The Nikkei 225 surged 3.64%, surpassing 38,000 for the first time since August 1. For the week, the index rose by 8.67%, the largest weekly gain since April 2020, according to FactSet data. Japan's broader Topix index also saw a strong performance, climbing 2.99% to close at 2,678.6, recording a weekly gain of 7.86%, the highest since 2020. The country's parliament is scheduled to convene a special session next week to discuss the Bank of Japan's recent decision to raise interest rates, according to government sources.

China

China's GDP growth rate in the second quarter of 2024 slowed to its lowest level since the first quarter of 2023. Economic growth from April to June 2024 was 4.7% year-over-year, down from 5.3% in the January-March period. The Chinese economy is facing difficulties in recovering from its worst performance in five quarters. Recent data from China's $17 trillion economy reveals a general loss of momentum and signs of further decline. According to data released on June 15, investment in fixed assets grew by 3.6% year-on-year in the first seven months of 2024, which was slower than expected. The downturn in China's housing market continues, with 48 million unfinished homes posing a risk of prolonging the crisis. The head of the People's Bank of China acknowledged that the down payment ratio on mortgages has dropped to a record low of 15%, and interest rates are also at very low levels. Shanghai Composite Index edged up by 1.14%. In Hong Kong, the benchmark Hang Seng Index rose by 2.86%.