Major Indices
| Index | Performance |
|---|---|
| S&P 500 | +0.69% |
| DOW Jones | +0.25% |
| NASDAQ | -0.9% |
| FTSE 100 | +3.08% |
| DAX | +0.45% |
| Nikkei 225 | -0.27% |
| Shangai Composite | -2.16% |
Sector Performance (Finviz)
UK CPI Release
UK inflation fell to 7.9% from 8.7% in May (vs 8.2% expected), but is still of course way higher than the 2% target. Fuel prices fell a staggering 22.7%. This positive news comes after four consecutive surprises of higher-than-expected inflation statistics. The UK lags behind the US in tackling inflation and rate hikes, but this surprise has caused GBPUSD to fall 1.83% this week. 50bps hike from the BoE is now less likely and will have to be re-calculated in line with this new data.
Consumer Price Inflation from the Office for National Statistics
Emerging Markets Look Cheap
The P/E ratio is 26% cheaper than that of developed nations, and their economies are expected to grow faster.
| 2024 Estimates | MSCI Emerging Markets | MSCI World |
|---|---|---|
| Price-to-Book Valuation | 1.5 | 2.1 |
| Price-to-Earnings Ratio | 13.3 | 17.9 |
| Dividend Yield (%) | 3.0 | 2.1 |
Bloomberg
The iShares Emerging Markets ETF (EEM) is currently trading at 30.8% below its peak in February 2021
Trading View: Ticker EEM
Other Headlines
- Blackstone becomes the first $1tn private equity manager
- U.S. borrowers applying for loans are being rejected at the highest rate in 5 years as lenders tighten the belt on loan requirements
- For the first time in years, US paychecks increased more than inflation, leaving workers with a little extra spending money
- Microsoft acquisition of Activision uncertainty: the original deadline for the merger to complete was July 18th, however this has now been extended. The merger has been approved in several markets including the European Union, Ukraine, Saudi Arabia, Brazil, Serbia, Chile, Japan, South Africa, South Korea and China. But the merger is currently pending in the United States. Microsoft have now won more time from British regulators to seal the ativision deal.
Strong Bank of America Earnings Q2 2023
Earnings came in at $0.88 a share (vs 0.84 expected)
Revenue came in at $25.33 billion vs. an expected $25.05 billion (an 11% increase)
FICC trading revenue jumped up 18%
BofA stock (BAC) climbed 4.42% on Tuesday, but still 37.6% lower than its 3 year high in Jan 2022.
Coming Up Next Week
Mondays NASDAQ 100 Rebalance: Before markets open on Monday, some larger companies will lose weight in the index, and technology megacaps will lose dominance.
Busiest Week of Earnings Season: $25tn worth of companies will release their earnings including Microsoft(Tuesday), Coca Cola (Wednesday), and McDonalds(Thursday).