Major Indices
| Index | Performance |
|---|---|
| S&P 500 | -2.27% |
| DOW Jones | -1.71% |
| NASDAQ | -3.02% |
| FTSE 100 | -1.69% |
| DAX | -3.14% |
| Nikkei 225 | -1.73% |
| Shangai Composite | +0.37% |
Sector Performance
Dollar Strength Index (Ticker DXY)
The USD has surged and the DXY broke through the 102.5 level
China CPI Release and Deflation
China is now in a period of deflation after a CPI release of -0.3% in July. This has been driven by reduced exports, struggling real estate market and youth unemployment levels.
Consumer inflation is now at 0% and housing market sales have fallen dramatically (by 33.1% from last July).
US Debt Rating Dowgrade
Fitch has downgraded US debt from AAA to AA+ due to reasons including; political instability, interest payments and a drop in governance standards. Note that AAA is the safest possible debt rating, suggesting extremely low possibility of a default. Despite a downgrade, it is very unlikely that this default will happen. The U.S. Treasury market saw a sell off in repsonse, and the 2 year treasury yield sits at just below 5%.
Positive Inflation Data for the US
The PCE (Personal Consumption Expenditures Price Index) grew 3% for the year and 0.2% for the month, this is a key indicator that the FED rely on for rate decisions. This is the lowest rate of acceleration in 2 years and as you would imagine, equities responded well.
Oil Earnings: Chevron
Sales came in at $48.8bn, with $9.2bn in cash and $6bn in profit. This may seem great, but their profit is roughly half that of a year ago. Suprisingly, their production actually grew, but this decline is due to a $33 reduction in the price of a barrel of oil, though since the prices have begin to rally. Chevron also purchased PDC Energy, and so their forecast is somewhat bright.
Other Headlines
- Paypal released a stablecoin (PYUSD), driving their share price up 2.66% on Monday.
- Apple announced a 1% drop in revenue year over year, and shares dropped 7.07% this week.
- Bank of England raised rates to 5.25% (15-year high). Inflation is not expected to fall to 3/5 until August 2024, though a recession is no longer forecast.
- Amazon surged 5.57% this week, and has rose over 50% this year! EPS came in at $0.64/share, almost double expectations.
- There has been a 34,000 decline in job openings in the US- good news for inflation.