World markets continued to rise this week albeit slowly following the release of mixed data. Markets are encouraged by the signs of an economic soft landing on the horizon as small and mid-cap stocks continued their winning streak. The announcement of weak labor market data raised expectations of a rate cut in September. Investors keenly await Fed Chair Jerome Powell’s statement at the conclusion of the Jackson Hole Symposium. In the UK, consumer confidence remained strong with the latest batch of economic data, while PMI numbers in Germany indicate a possible contraction in business activity.

Global Updates
  • The MSCI All Country World Index inched up this week with automobile stocks pushing up European equities. Technology and small-cap stocks pushed up American equities, but the rise was tempered by the announcement of a weakening labor market. 
  • The United Kingdom’s GfK Consumer Confidence index remained unchanged in August indicating unchanged consumer confidence. UK equities fell, as they were impacted by lower metal prices, falling factory orders and sticky consumer confidence. UK businesses reported improvement in economic growth in August.
  • Crude Oil futures fell weighed down by decreasing demand in China and concerns for slowdown in the U.S and European manufacturing.
  • Chinese property developer Kaisa has arrived at a debt-restructuring plan with offshore debt holders. The company plans to offer new debt of $5 billion in notes and $4.8 billion in convertible bonds.
  • China’s oil imports from its major supplier Russia has reduced by 7.4% year-to-year in July. 
  • S&P Global released the HCOB German flash composite Purchasing Managers’ Index for August, indicating the second month of contraction in the German Manufacturing sector. 
  • Bank of China has appointed Ernst and Young as its auditor, replacing PricewaterhouseCoopers following a regulatory investigation into PwC’s work on China’s Evergrande Group.
  • International gold prices have continued to rise reaching record highs driven by a weak dollar, rising international demand and expectations of rate cut by the Federal Reserve.
  • Japanese inflation rate remained in line at 2.8% and core inflation rose to 2.7% in July for the third consecutive month. Bank of Japan governor Kazuo Ueda expressed their willingness to tighten policy if inflation remains sticky.
U.S. Equity
  • The S&P 500, Dow Jones Index and Nasdaq indices crept up this week owing to the rally in technology stocks.
  • The US labor department revised the estimated total payroll employment downward by 0.5% (818,000) between April 2023 to March 2024.  
  • Edgar Bronfman has initiated a $4.3 Billion bid for Redstone’s holdings in Paramount. Media experts are considering the offer as an attempt to scuttle the merger of Paramount and Skydance Media.
  • AMD declared its plans to acquire server designer, ZT Systems, for $4.9 billion to expand its AI infrastructure to compete with Nvidia
  • The US Federal Aviation Administration will be inspecting all Boeing 787 Dreamliners following the mid-air autonomous dive that injured 50 passengers in March. 
  • Berkshire Hathaway offloaded $550 million of Bank of America stock while retaining 12% of the bank’s outstanding shares. 
  • Lowe’s has lowered its full-year guidance after weak demand in the home-improvement sector led to weak sales in the latest quarter. 
  • Wells Fargo will be offloading the majority of its third-party mortgaging-servicing business to Trimont, making Trimont the largest servicer in the U.S.
  • Financing Elon Musk’s takeover of Twitter has become a burden for the seven banks backing the deal due to declining valuation, advertiser dissatisfaction and poor fiscal management. The banks have been unable to offload the $13 billion debt. 
  • Off-price retailer TJX Companies’ stock gained as the company raised its annual profit forecasts after beating quarterly revenue estimates.
  • The Alaska Air and Hawaiian Airlines $1 billion merger deal has cleared the US Justice Department’s scrutiny without any objections.
U.S. Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose this week.
  • The U.S. 10-year Treasury yield fell to 3.85% and the yield on the 2-year note edged down to 3.99% over the week.
  • The U.S. Dollar Index continued to decline 101.37 this week as the markets brace for the much-awaited result of the FOMC’s annual meeting in Jackson Hole.
Sources

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