This week's global markets update highlights the significant gains in U.S. stocks, driven by positive news on inflation and growth. European markets also showed strong performance, while Japan's stock markets rebounded. In China, investor sentiment remained steady despite weaker economic activity, and other key markets like Brazil and India showed signs of economic strengthening.
United States
- Stock Market Recovery
- Stocks recorded a solid week of gains, with the Nasdaq Composite leading the way, ending the week up 12.24% from its August 5 lows.
- NVIDIA surged 18.93% over the week, contributing to the tech sector's strong performance.
- Consumer discretionary stocks also performed well, with Starbucks and Walmart showing significant gains.
- Alphabet's shares fell midweek due to a potential Justice Department investigation.
- Overall earnings for the S&P 500 expanded by 10.9% in Q2, the fastest pace since the end of 2021.
- Retail Sales and Inflation
- Retail sales surged 1.0% in July, the best showing in 18 months.
- Core producer prices were flat in July, ending three months of increases.
- The year-over-year increase in CPI fell below 3.0% for the first time in over three years.
- Housing Market
- Building permits fell below 1.4 million for the first time since 2020.
- Housing starts also fell to their lowest level in four years.
- Bond Market
- The yield on the 10-year Treasury note decreased but jumped following strong retail sales data.
- The U.S. investment-grade corporate bond market benefited from improving risk sentiment.
- The high yield bond market trended higher on lighter-than-average volumes.
- Market Indexes Changes
- DJIA: 40,659.76 (+1162.22, +7.88% YTD)
- S&P 500: 5,554.25 (+210.09, +16.45% YTD)
- Nasdaq Composite: 17,631.72 (+886.42, +17.46% YTD)
- S&P MidCap 400: 3,011.38 (+75.83, +8.26% YTD)
- Russell 2000: 2,141.92 (+61.00, +5.67% YTD)
Europe
- Market Performance
- STOXX Europe 600 Index ended 2.46% higher.
- Germany’s DAX: +3.38%
- France’s CAC 40: +2.48%
- Italy’s FTSE MIB: +4.09%
- UK’s FTSE 100: +1.75%
- UK Economic Data
- Headline inflation in the UK ticked up to 2.2% in July.
- GDP expanded 0.6% sequentially in the three months through June.
- Average weekly earnings growth rose 5.4% in the three months through June.
- Retail sales volumes rebounded 0.5% sequentially in July.
- Eurozone Resilience
- Eurozone GDP expanded 0.3% sequentially in Q2.
- Industrial production contracted 0.1% in June.
- Employment in Q2 expanded 0.2% sequentially.
- Norway's Monetary Policy
- Norges Bank held its key interest rate at 4.5%.
- The central bank indicated the rate could be lowered if the economy slows down more than projected.
Japan
- Stock Market Rebound
- Nikkei 225 Index gained 8.7%, and the TOPIX Index rose 7.9%.
- The yen weakened, providing a tailwind for exporters.
- Japan's GDP expanded 0.8% quarter on quarter in Q2.
- Bond Market
- The yield on the 10-year Japanese government bond rose to 0.88%.
- Political Developments
- Prime Minister Fumio Kishida will not seek reelection as leader of the Liberal Democratic Party.
China
- Stock Market Performance
- Shanghai Composite Index gained 0.6%, and the CSI 300 added 0.42%.
- Hong Kong’s Hang Seng Index was up 1.99%.
- Economic Activity
- Industrial production rose 5.1% in July, below consensus.
- Retail sales expanded 2.7% in July.
- Fixed asset investment rose 3.6% from January to July.
- Urban unemployment rate edged up to 5.2%.
- Property Market
- New home prices in 70 cities fell 0.7% in July, marking the 13th straight monthly
