Friday's Markets Update (July 26, 2024)

26 Jul 2024 by rate3

On Friday, stocks recouped marginally on easing inflation data, boosting hopes for lower interest rates. Major indexes closed slightly higher, led by industrials. However, the week ended negatively for the S&P and Nasdaq. Investors now focus on earnings reports from tech giants next week. In global markets, the yen weakened after the Bank of China cut its rates again. BTC jumped back to 68K with the start of the Nashville Conference, while ETH followed less vigorously, reaching above 3.2K.

Details

PCE inflation eased slightly to 2.5% from 2.6% in June, meeting expectations. However, underlying inflation (core PCE) accelerated unexpectedly to 2.6% from 2.5%. While overall inflation is cooling, persistent price pressures remain a concern for the Fed. 1Y trend: "Down" (BEA)
Michigan Consumer sentiment improved slightly in July but remains near an eight-month low. Consumers are more optimistic about the future but less satisfied with current conditions. Inflation expectations eased slightly for the coming year but remain elevated for the long term. 1Y trend: "Up" (SCA)

Crypto

BlackRock has poured cold water on hopes for altcoin ETFs. The world's largest asset manager says investor demand for cryptocurrencies beyond Bitcoin and Ethereum is minimal. This suggests that ETFs tracking other digital assets like Solana or XRP might be a long shot. (source)

Currencies

The offshore yuan has declined past 7.25 after recent gains, likely a market correction following aggressive state bank intervention to boost the currency. To further stimulate the economy, China's central bank unexpectedly cut a key interest rate, adding to earlier monetary easing efforts. 1Y trend: "Up"

Commodities

Copper prices held steady above $4.10 per pound despite a third week of declines. Concerns over China's economy and broader market weakness pressured prices. However, recent Chinese stimulus and positive US economic data offered some support. Long-term optimism for copper demand remains due to green energy trends. 1Y trend: "Up"

On Week 31, we'll will see key data releases including Fed policy, jobs reports, and earnings from tech giants. Globally, central bank decisions, inflation figures, and GDP data will dominate headlines. Manufacturing PMIs from major economies will also be closely watched.