Last quarter, US GDP increased to 6.5% (previous 6.4%) in annual terms, significantly lower than 8.5% expected by economists. Weekly jobless claims fell to 400,000 (previous 424,000), but also below expectations of 382,000. Against the background of this data, the dollar index fell to a monthly minimum, but it did not prevent the US stock market from closing in the green zone. The major indices increased due to a strengthening of the consumer goods sector as well as the oil and gas sector. At the close of the New York Stock Exchange, the Dow Jones increased by 0.44%, the S&P 500 increased by 0.42%, and the Nasdaq technology index added 0.11%. But after the market closed, AMZN reported for the previous quarter. The company’s revenue was up but below expectations. Also, the online giant lowered its forecast for the third quarter, which led to a sharp drop in prices by more than 7%. Such a drop undoubtedly affected the Nasdaq index as well, which fell sharply by more than 1%. It suggests that AMZN is the driver of the Nasdaq index. Despite the positive report, Facebook’s stock price also decreased yesterday. However, Ford Motors stock, on the other hand, increased by 3.8%. The US automaker recorded a net profit in 2Q2021, although the figure is half as much as a year earlier.
European stock indexes increased yesterday. The Stoxx Europe 600 composite index of the region’s largest companies increased by 0.46%, the British FTSE 100 index added 0.88%, the German DAX increased by 0.45%, and the French CAC 40 gained 0.37%. Royal Dutch Shell Plc (+3.8%), Nokia Corp (+4.6%), and Volkswagen AG (+1.7%) were the biggest gainers. Inflation in Germany increased to 3.8% in July, the highest level since 2008. The rise in inflation is primarily due to higher energy prices and a reduction in VAT (Valued Added Tax), which Angela Merkel’s government introduced to mitigate the effects of the pandemic. At the same time, Germany’s unemployment rate decreased to 5.7% (previous 5.9%). According to the International Monetary Fund (IMF) report, the UK economy will recover the fastest among all European countries. It should be noted that the UK has suffered most of the coronavirus epidemic among the G7 countries. Today, the eurozone will report on the level of inflation and the status of the labor market.
Gold prices continue to rise. Gold is highly correlated to the dollar index and US Treasury bond yields. Fundamentally, as long as the Fed maintains the soft monetary policy, precious metal prices will tend to rise. But over the long term, gold has lost its lead as a defensive asset.
Oil prices continue to rise slowly. The fundamental picture is now in favor of rising prices. But don’t count on a sharp rise in prices, as OPEC+ is increasing daily oil production to compensate for the high demand in summer. On the other hand, it is worth paying attention to natural gas, which has been rising steadily since May and still has room for further growth.
The Chinese authorities managed to calm the panic sell-off in technology and education stocks. China has said it will continue to allow companies to IPO in the US if they meet all listing requirements. But despite this, the Asian stock market demonstrated its biggest monthly drop since last March. Japan’s unemployment rate decreased to 2.9% (previous 3.0%), while the job availability ratio increased (113 job openings for every 100 job seekers). But Japan’s Nikkei index fell by 1.71%, recording its 11th consecutive month of declines. Australia’s ASX 200 index decreased by 0.08%. The country’s producer price index rose by 2.2% annually and by 0.7% quarter-over-quarter in the second half of 2021. There is a decline in the delta variant cases of COVID-19 in Sydney.
Main market quotes:
- S&P 500 (F) 4,419.15 +18.51 (+0.42%)
- Dow Jones 35,084.53 +153.60 (+0.44%)
- DAX 15,640.47 +70.11 (+0.45%)
- FTSE 100 7,078.42 +61.79 (+0.88%)
- USD Index 91.90 -0.42 (-0.45%)
Important events for today:
- Japan Unemployment Rate (m/m) at 02:30 (GMT+3);
- Germany GDP (q/q) at 11:00 (GMT+3);
- Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
- Eurozone GDP (q/q) at 12:00 (GMT+3);
- Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
- Canada GDP (m/m, q/q) at 15:30 (GMT+3);
- US PCE price index (m/m) at 15:30 (GMT+3);
- US Chicago PMI (m/m) at 16:45 (GMT+3).
