World markets witnessed a turnaround last week following the release of positive economic and corporate data. Retail sales rose in the UK and US. Jobless claims declined in the US labor market. Unemployment rate remained steady in Canada. PPI and CPI data from the US indicated slowing inflation in the US. Technology stocks led the market recovery. Walmart, Cisco Systems, Sam’s Club, Nvidia and Paramount stock surged, leading the recovery. Japanese Prime Minister Fumio Kishida will be stepping down in September and his political successor has not yet been declared.

Global Updates
  • The MSCI All Country World Index surged as investor confidence recovered, driven by positive price and employment data. Retail sales growth in the US and UK also buoyed market sentiments. European investors anticipate at least two more rate cuts by the ECB this year.
  • Newly released U.S. Producer Price Index data indicated inflation in producer prices in July at 0.1% was lower than expected, which has increased market expectations of a 25 basis points rate cut in September. University of Michigan consumer sentiment data released last week depicted increasing consumer confidence recovering after five months of declining trend.
  • The European Central Bank is expected to cut policy rates six times, by 25 basis points every quarter, with the deposit rate settling at 2.25% by December 2025
  • The unemployment rate in Canada remained steady at 6.4% in July. The full-time employment rate rose, while labor participation rate fell
  • The U.K. inflation rate of 2.2% for July was lower than expected. UK retail sales increased by 0.5% as inflation eased.
  • Energy shares have dropped after OPEC projected lower energy demand in 2024-2025, due to a looming economic crisis in China.
  • Chinese government efforts to increase consumer spending boosted retail sales 2.7% year to year in July. The property sector persisted in crisis mode with home prices dropping by 4.9% in July. Unemployment rate edged up 5.2% and industrial output slowed 5.1% in the same period.
U.S. Equity
  • The S&P 500, Dow Jones index and Nasdaq indices indicate strong recovery in U.S. equity markets after positive unemployment, retail and price data elevated investor confidence. Technology stocks lead the market recovery. 
  • US retail spending grew by 1% last month, allayed investor apprehensions of an economic slowdown. The rising sales was led by motor vehicles, electronics, groceries, etc. 
  • The US labor department reported that the year-on-year US inflation rate declined to 2.9% for the fourth consecutive month in July. The Consumer Price Index rose 0.2% month-on-month in line with expectations. 
  • The number of people claiming jobless benefits fell for the second consecutive week, by 7,000 to 227,000 last week undermining expectations. 
  • The U.S. government has negotiated lower prices for the top 10 selling prescription drugs under the Medicare program. The negotiated prices are estimated to save $1.5 billion in out-of-pocket expenses $6 billion expense overall in the first year.
  • The stock of Ulta, an American chain of cosmetic stores, rose during last week after filings released showed that Berkshire acquired 690,106 shares of the company in the second quarter of 2024.
  • Starbucks has appointed the former Chipotle CEO Brian Niccol as its new CEO.
  • Mars is acquiring Kellanova in a $36 billion deal, the largest buyout deal of 2024. 
  • Home Depot, the world’s largest home improvement retailer, cut its annual sales outlook due to weak consumer spending. Home Depot also declared a $2.25 dividend for the second-quarter. 
  • Canada’s Bank of Nova Scotia has agreed to acquire a 15% stake in American bank KeyCorp for $2.8 billion. The bank has emerged as the only Canadian bank with a presence in the NAFTA countries.
  • Cybersecurity company Kiteworks attracted $456 million investment from Technology investors Insight Partners and Sixth Street Partners with the expectations of higher demand for data protection from businesses and government agencies.
  • Natron Energy, a startup developing high tech batteries, is planning to invest $1.4 billion in a manufacturing plant in North Carolina.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose sharply last week recovering after release of positive price and retail sales data.
  • The U.S. 10-year Treasury yield fell to 3.90% and the yield on the 2-year note rose to 4.08% over the week.
  • The U.S. Dollar Index dropped sharply to 102.9 under pressure from cooler-than-expected US inflation data. 
  • The yield on the US 10-year Treasury note dropped and recovered after release of an encouraging retail sales and jobless claims data.
Sources

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