Major Indices
| Index | Performance |
|---|---|
| S&P 500 | +1.01% |
| DOW Jones | +4.54% |
| NASDAQ | +2.11% |
| FTSE 100 | +0.4% |
| DAX | +1.81% |
| Nikkei 225 | +1.41% |
| Shangai Composite | +3.42% |
- The S&P hit its highest level since April 2022
- Tech stocks drove the Nasdaq up as earnings are exceeding expectations and rhe AI craze continues
Sector Performance
FOMC Meeting: 25bps as expected
We were told to expect two more hike rates in 2023, although there is growing sentinment that the market can handle additional hikes. Since the last decision to leave rates unchanged, the labour market has strengthened. A strong labour market drives inflation by increasing consumer spending and increasing wages. Jerome Powell said they would be 'prepared to raise further if we think that's appropriate', but Septembers decision depends upon data such as inflation and labour markets. It is beleived that rate hikes will be over by the end of the year. The target rate is now increased to 5.25-5.5%. Next meeting 20th September
US GDP Data
- Real and Nomial GDP grew at annualised rate of 2.4 and 4.7 percent resepctively
- Real disposable income grew 2.5%, much less than the 8.5% from Q2 although still a positive statistic
- Markets reacted as equities initially surged
- Consumer spending was strong due to salary increases that beat inflation
ECB Rate Hikes: 25bps
The ECB deposit rate now sits at 3.75% which is a 23 year high following their ninth consecutive hike. Lagarde (President of ECB) left a lot of speculation; "we might hike and we might hold and what is decided in September is not definitive". Inflation in the Eurozone sits at 5.5% in June, almost half that of October 2022, yet still not sustainable. Rceession fears are focussed on Germany, the only developed economy which the IMF expects to shrink in 2023
Joe Lewis
The UK billionaire and owner of Tottenham Hotspur FC has been arrested and charged due to insider trading. The 86 year old man shared tips with family, friends and even loaned $500k to his personal pilot to invest in shares prior to a news event. Prosecutors claim that this has been going on for upwards of 8 years!
Earnings Highlights This Week
Boeing
Shares rose 8.7% upon the news of smaller than expected loss last quarter. Deliveries were up.
Alphabet
shares rose 5.7% upon positive news for positive Google cloud data and promising statistics including earings of $1.44/share and $74.4bn in revenue.
McDonald's
The controversial Grimace shake got McDonalds in the headlines and led to a successful quarter. This was all thanks to a TikTok going viral! Sales grew 10% and came in at $6.5bn vs $6.27bn expected
Other Headlines
- corporate bankruptancies are on the rise due to higher interest rates
- Twitter rebranded to 'X' and the share price. Remember Twitter is a private company and not publicly traded
- UBS has payed off $300m of Credit Suisse's bills
- Wall Street has shed 21,000 jobs so far this year, mainly due to lower M&A and IPO activity/li>