Last week ABDWhile the stock and sector-based effects of the balance sheet calendar, which is concentrated in , are spreading around the world, the strengthening of the country following the announced growth data “soft landing” expectation helped partially offset the losses.
From American technology companies AlphabetAlthough ‘s revenue increased by 14 percent and net profit by 28.6 percent in the second quarter of this year, exceeding expectations, the fact that it has not yet made the desired progress in artificial intelligence has made investors nervous.
Electric car manufacturer Tesla‘s net profit fell by 45 percent in the second quarter of this year compared to the same period in 2023. On the balance sheet side, next week Microsoft ve Meta Platforms While the financial results of companies such as are the focus of investors, the Fed’s interest rate decision and the intensive data agenda are expected to determine the direction of the markets.
FedWhile it is almost certain that the policy rate will remain unchanged next week, the policy text and the Fed Chairman Jerome PowellIt is anticipated that the clues to be taken from ‘s statements will affect asset prices.
While pricing in money markets highlights the possibility that the bank may cut interest rates in the three meetings it will hold until the end of the year, it is stated that the data in the employment report to be announced on Friday may change these expectations.
Investors in bond markets this weekwait and see” While volatility remained limited due to the stance, the US 10-year bond yield closed the week down 10 basis points to 4.20 percent. The dollar index also remained flat at 104.3.
Last week, the ounce price of gold decreased by 0.6 percent to $2,387, while the ounce price of silver continued its downward trend for the third week with a 4.4 percent decrease.
Copper, another metal that continued its downward trend for the third week in a row with the news flow that electric cars may use less copper in the future, lost 3.2 percent of its value to $4.1 per pound, while the price of a barrel of Brent crude oil finished the week down 2.6 percent to $79.7.
New York Stock Exchange Mixed
Although last week’s earnings season on the New York Stock Exchange caused volatility based on stocks and sectors, the fact that the country’s second-quarter growth exceeded expectations at 2.8 percent strengthened expectations for a “soft landing.”
According to data released yesterday in the country, personal consumption expenditures increased by 0.3 percent monthly in June, in line with expectations.
The personal consumption expenditures price index also increased in June by 0.1 percent monthly and 2.5 percent annually, in line with expectations.
The core personal consumption expenditures price index, which excludes food and energy items that the Fed considers as inflation indicators, increased in line with expectations at 0.2 percent on a monthly basis in June, but slightly above expectations at 2.6 percent on an annual basis. The core personal consumption expenditures price index had also increased by 2.6 percent annually in May.
On the other hand, US Vice President Kamala Harris is the strongest Democratic presidential candidate after President Joe Biden withdrew his candidacy.
Concerns over President Biden’s health and the fact that former US President Donald Trump, the Republican candidate, has become the overwhelming favorite in the polls after he was attacked have caused controversy among Democrats. Analysts say Trump is still ahead in US polls.
With these developments, the Nasdaq index lost 2.08 percent and the S&P 500 index lost 0.83 percent last week, while the Dow Jones index gained 0.75 percent.
Next week, the Dallas Fed manufacturing activity index will be on Monday, the New York Fed consumer confidence index and JOLTS job openings on Tuesday, the Fed’s interest rate decision and ADP private sector employment on Wednesday, weekly jobless claims and the ISM manufacturing Purchasing Managers’ Index (PMI) on Thursday, and the employment report, factory orders, personal income and durable goods orders on Friday.
Bank of England’s interest rate decision will be the focus of investors in Europe
European stock markets also had a mixed trend last week, with the Bank of England’s (BoE) monetary policy decisions on Thursday being the focus of investors.
While the bank is expected to keep the policy rate unchanged next week, it is estimated that the signals to be received from the policy text and BoE Governor Andrew Bailey’s statements may provide clues for the upcoming monetary policy.
On the other hand, data released last week in the region showed that economic activity continues to slow, which is eroding risk appetite.
Accordingly, in Germany, the manufacturing industry Purchasing Managers Index (PMI) was 42.6 and the services sector PMI was 52, while in the Eurozone, the manufacturing industry PMI was 45.6 and the services sector PMI was 51.9, below expectations, while in the UK, the manufacturing industry PMI was 51.8, above expectations, and the services sector PMI was 52.4, below expectations.
With these developments, the FTSE 100 index in the UK rose by 1.59 percent and the DAX index in Germany rose by 1.35 percent, while the MIB 30 index in Italy fell by 1.18 percent and the CAC 40 index in France fell by 0.22 percent.
In the week of July 29, growth and inflation in the Eurozone and Germany will be monitored on Tuesday, unemployment in Germany and inflation in the Eurozone on Wednesday, and manufacturing industry PMI data across the region will be monitored on Friday.
BOJ surprise rate hike likely in Asia
While selling pressure deepened in Asian stock markets last week, concerns that Donald Trump’s re-election as US president could bring trade wars back to the agenda were effective in increasing risk perception.
In Asia, all eyes are on the Bank of Japan’s (BOJ) interest rate decision on Wednesday, with reports suggesting the bank could take a surprise step of raising interest rates by 10 basis points.
According to data released in the country last week, the manufacturing industry PMI fell to 49.2, while the service sector PMI rose to 53.9 and the composite PMI to 52.6. The service sector Producer Price Index (PPI) in Japan also far exceeded expectations with a 3 percent increase.
In contrast, the Consumer Price Index (CPI) in Japan rose by 2.2 percent annually in July, falling short of forecasts.
With these developments, the dollar/yen parity decreased by 2.3 percent on a weekly basis to 153.8.
While steps supporting the economy came to the fore last week on the Chinese side, the People’s Bank of China (PBoC) reduced the 1- and 5-year borrowing rates by 10 basis points to 3.35 percent and 3.85 percent, respectively, in the country where recession concerns are at the forefront.
With these developments, the Nikkei 225 index in Japan lost 5.98 percent, the Hang Seng index in Hong Kong lost 2.28 percent, the Kospi index in South Korea lost 2.27 percent and the Shanghai Composite index in China lost 3.07 percent.
Next week, unemployment data in Japan will be followed on Tuesday, while PMI data for the manufacturing and service sectors in China and industrial production data in Japan will be followed on Wednesday.
TCMB did not make any surprises in the country
While the interest rate decision of the Central Bank of the Republic of Turkey (CBRT) was followed domestically last week, the bank left the policy rate unchanged at 50 percent.
While the BIST 100 index in Borsa Istanbul closed the week with a 2.37 percent loss of value at 10,891.42 points, the dollar/TL closed the week at 32.9456, 0.24 percent below the previous close.
In the week of July 29, Tuesday’s consumer confidence index, Wednesday’s foreign trade statistics and Thursday’s manufacturing industry PMI data will be followed.
Source: www.dunya.com
