Market Update: 23 July 2024
Australia’s markets experienced slight gains this week, with the ASX 200 finishing up 0.2%. Despite a rise in the unemployment rate to 4.1%, job growth has surpassed expectations for the third month in a row. This consistent job strength has raised speculation that the RBA may consider a rate hike at their August meeting. Real Estate and Consumer Staples sectors showed significant gains, while Materials and Technology sectors underperformed. The ASX 200 even climbed above 8000 points earlier this week, fuelled by expectations of potential interest rate cuts by the US Federal Reserve in September.
Globally, markets presented a mixed picture. In the US, the S&P 500 and Nasdaq posted notable declines due to concerns over potential tighter restrictions on chip sales to China. However, the Dow Jones managed a slight gain. Fed Chair Powell’s comments provided some optimism, indicating that recent data suggests inflation is moving towards the 2% target. Notably, US Q2 earnings have started strong, with a significant percentage of companies reporting positive Earnings per share (EPS) and revenue surprises.
In Europe, equity markets faced their worst week since October 2023, influenced by uncertainties around earnings, interest rates, and US election developments. The ECB’s decision to keep rates unchanged aligned with market expectations, but future monetary policy meetings remain “wide open.” Meanwhile, in Asia, the Nikkei experienced its worst performance since April 2024, and mixed results were seen in China/HK markets. Despite reaffirming broad economic goals, Chinese leaders left investors seeking more detailed policy implementation plans.
Published 23/7/2024
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