On Friday, the Dow Jones Index (US30) was down 0.12% (for the week -0.17%), while the S&P 500 Index (US500) was down 0.41% (for the week +0.02%). The NASDAQ Technology Index (US100) closed negative 0.71% (for the week +0.52%). Stocks initially went up as easing price pressures in the US briefly lowered T-bond yields and raised the odds of a Fed interest rate cut this year. Friday's economic news showed that the May US core PCE deflator, the Fed's preferred measure of inflation, fell to 2.6% y/y from 2.8% y/y in April, which matched expectations and was the slowest rate of increase in 3 years. However, stocks came under pressure after stronger-than-expected US economic reports on Chicago PMI and the University of Michigan Consumer Sentiment Index pushed 10-year T-note yields to 2-week highs.
The US dollar jumped to nearly its highest level in a year, but UBS analysts believe this strength is unlikely to continue. They cite factors such as an expected Fed rate cut and concerns about the US budget deficit. UBS expects dollar strength to weaken in the coming months as the Fed begins cutting rates in September.
Nike (NKE) closed down more than 19%, topping the list of losers in the S&P 500 and Dow Jones Industrials, after reporting fourth-quarter revenue of $12.61 billion, weaker than the consensus of $12.86 billion, and estimating first-quarter earnings to decline about 10%. Shares of Xerox Holdings (XRX) closed down more than 5% after Citigroup initiated stock coverage with a "sell" recommendation and $11 price target.
Equity markets in Europe were mostly down on Friday. Germany's DAX (DE40) rose by 0.14% (for the week +0.38%), France's CAC 40 (FR40) closed Friday down 0.68% (for the week -2.03%), Spain's IBEX 35 (ES35) lost 0.07% (for the week -0.98%), and the UK's FTSE 100 (UK100) closed negative 0.19% (for the week -0.89%) on Friday. May 1-year Eurozone ECB inflation expectations fell to 2.8% from 2.9% in April, the slowest rate of increase in 2 years. May 3-year ECB inflation expectations fell to 2.3% from 2.4% in April, the slowest rate of increase in 2 years. German unemployment for June rose by 19,000, indicating a weaker labor market compared to expectations of 15,000. The unemployment rate for June rose by 0.1 to a 3-year high of 6.0%, indicating a weaker labor market compared to expectations of no change at 5.9%. Swaps discount the odds of a 25 bps ECB rate cut by 12% for the July 18 meeting and 65% for the September 12 meeting.
The CAC 40 Index (FR40) rose by 2.3% to 7,703 in early trading on Monday after Marine Le Pen's far-right Rassemblement Nationale (RN) party came out on top in the first round of parliamentary voting, matching expectations.
Asian markets traded mixed last week. Japan's Nikkei 225 (JP225) gained 2.82%, China's FTSE China A50 (CHA50) fell by 0.46% for the week, Hong Kong's Hang Seng (HK50) lost 1.05%, and Australia's ASX 200 (AU200) was positive 0.10%.
The offshore yuan depreciated to 7.30 per dollar, remaining near its lowest level in seven months as investors digested mixed Chinese PMI data. The private survey showed strong growth in the manufacturing sector in June, hitting a three-year high and beating expectations, signaling positive momentum in industrial activity. Despite this, official data over the weekend presented a gloomier outlook, showing continued contraction in output for the second consecutive month, suggesting the need for additional stimulus measures as China seeks to restore economic stability.
The S&P Global Vietnam manufacturing PMI jumped to 54.7 in June 2024, accelerating from 50.3 in the previous month. This marked the second consecutive period of rising factory activity and the sharpest since May 2022, as new orders rose to a level only surpassed in the first month of data collection for the survey in March 2011. In addition, new export orders grew at the fastest pace since February 2022. Vietnam's annual inflation rate fell to 4.34% in June 2024 from 4.44% in May, the lowest since March.
Judo Bank's Australian Manufacturing PMI fell to 47.2 in June 2024 from 49.7 in May, marking the fifth consecutive monthly deterioration in manufacturing conditions and the fastest pace since May 2020.
S&P 500 (US500) 5,460.48 −22.39 (−0.41%)
Dow Jones (US30) 39,118.86 −45.20 (−0.12%)
DAX (DE40) 18,235.45 +24.90 (+0.14%)
FTSE 100 (UK100) 8,164.12 −15.56 (−0.19%)
USD Index 105.87 −0.04 (−0.04%)
- – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
- – China Caixin Manufacturing PMI (m/m) at 04:45 (GMT+3);
- – Switzerland Retail Sales (m/m) at 09:30 (GMT+3);
- – German Manufacturing PMI (m/m) at 10:55 (GMT+3);
- – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
- – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
- – German Consumer Price Index (m/m) at 15:00 (GMT+3);
- – US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
- – Eurozone ECB President Lagarde Speaks at 22:00 (GMT+3).
by , 2024.07.01
We advise you to get acquainted with the daily forecasts for the major currency pairs.This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
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