USA
The main U.S. stock indexes posted their weekly gains of 2024, with the NASDAQ rising over 1.40%, the S&P 500 climbing 1.45%, and the Dow increasing by 1.27%. On Friday, both stocks and gold prices rose, while the dollar index and Treasury yields declined. Speaking at the Jackson Hole Symposium, Jerome Powell stated that it is time to adjust monetary policy. He also mentioned that the timing and pace of the key interest rate reduction would depend on incoming economic data. However, it seems this was largely overlooked.
After Powell's speech, the market became convinced that the Fed would cut the key interest rate by 1 percentage point this year, including a 50 basis point cut at the upcoming September meeting. However, it’s important to note that just a day earlier, on Thursday, the market was destabilized by a pro-inflationary report from the U.S. regarding unemployment benefit claims. The report showed that the number of claims for the week reached 232,000—aligning with forecasts and slightly higher than the previous figure of 228,000. The total number of Americans receiving such benefits increased slightly over the week, from 1.859 million to 1.863 million. This week is rich in economic data releases. In particular, reports on personal finances of households, consumer sentiment, unemployment benefit claims, and durable goods orders will be released in the U.S. Currently, the dollar index stands at 100.6, gold is at $2,550, and the yield on the 10-year U.S. Treasury bonds is 3.79%.
Europe
Last week, the indices closed in the green. The STOXX Europe 600 Index finished 0.66% higher. Among the major continental indices, France's CAC 40 gained 1.00%, and Spain’s IBEX 35 rose by 1.57%. The UK’s FTSE 100 Index increased by 0.20%, while Germany's DAX closed 0.90% higher. The Euro area composite PMI for August rose slightly by 1.1 points to 51.2, mainly due to a temporary boost in French services from the Paris Olympics, while Germany's PMI declined. Despite the slight improvement, underlying indicators show continued weak demand, with stable but low new orders and slowing employment growth. The manufacturing sector remains weak, and sentiment has declined. Input prices fell, and output prices rose slightly, both now near pre-COVID levels, which supports expectations of further declines in core inflation. Given the ongoing economic weakness, the ECB may consider lowering interest rates in September, as inflation in the Eurozone edged up slightly in July.
Japan
The Japanese stock market experienced a mixed performance this week, characterized by fluctuations driven by global economic concerns, domestic economic data and central banks outlooks. The Nikkei 225 index closed the week slightly higher, gaining 1.93%, while the broader Topix index saw a modest increase of 0.20%. The highlight of the week was the reaffirmation by Kazuo Ueda, the Governor of the Bank of Japan, regarding the BoJ's commitment to raising interest rates if inflation reaches the 2% target. The nationwide Consumer Price Index (CPI) for July showed an annual increase from 2.6% to 2.7%, reinforcing concerns about inflationary pressures in the economy
China
The Chinese stock market experienced a volatile week, driven by a mix of economic data releases, regulatory developments, and global market dynamics. Major indices reflected a cautious sentiment among investors as concerns over economic growth and policy direction persisted. Shanghai Composite Index edged down by 0.87%. In Hong Kong, the benchmark Hang Seng Index rose by 0.24%. China's industrial production growth for July was reported at 3.8% year-on-year, below market expectations of 4.2%. This lower-than-expected figure raised concerns about the overall strength of the economic recovery, leading to a cautious approach among investors. Th The Chinese government announced additional regulatory measures targeting sectors like technology and finance, adding to the uncertainty. While these measures are part of a broader strategy to ensure stability, they have contributed to short-term market volatility.