15/08/2024 Daily Reports
This week underscores the market’s intense focus on economic data, with investors closely watching U.S. retail sales and UK GDP figures due on Thursday for clues on the pace of potential rate cuts by the Federal Reserve and Bank of England.
Mild U.S. inflation data has solidified expectations for a Fed rate cut in September, but the size of the cut—whether 25 or 50 basis points—remains in question. Retail sales data today will be crucial, given its significance to U.S. economic growth.
The dollar has weakened against the euro, hitting its lowest level since last year, while the pound has also softened, influenced by weaker UK inflation data that fueled speculation of quicker BoE rate cuts.
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US Stocks Mostly Rise as Inflation Eases, Fed Rate Cuts Expected
US benchmark equity indexes mostly closed higher on Wednesday, following data showing July consumer inflation rose as expected, while annual price growth unexpectedly slowed. The Dow Jones gained 0.6%, and the S&P 500 increased by 0.4%, while the Nasdaq Composite remained nearly flat. Financials led the gains, while communication services declined the most.
The US consumer price index (CPI) rose 0.2% in July, matching forecasts, but annual inflation eased to 2.9%, the lowest since March 2021. This suggests the Federal Reserve may begin lowering interest rates in September. Producer prices also grew less than expected, further supporting potential rate cuts.
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In the bond market, the two-year yield rose slightly to 3.96%, while the 10-year yield dropped to 3.84%.
In corporate news, Kellanova surged 7.8% after agreeing to be acquired by Mars for $35.9 billion. Cardinal Health rose 3.7% after raising its earnings outlook, while Alphabet shares dropped over 2% amid DOJ considerations to break up Google.
Gold fell 0.9% to $2,486.20 per ounce, and silver declined 0.6% to $27.63 per ounce.
