Market Update: 13 August 2024
This week in Australia, the markets experienced a turbulent ride, with the ASX 200 facing its worst day in four years, closing down 3.3% last Monday. The RBA’s decision to leave rates unchanged at 4.35% provided some relief, although the central bank’s concerns about high inflation kept the tone cautious. As the Australian reporting season kicks off, key players like JB Hi-Fi, CSL, and Telstra will be closely watched, offering insights into the health of the economy.
Globally, the markets were shaken by a major selloff in Japan, where the Nikkei suffered its biggest one-day points fall, exceeding losses seen on “Black Monday” in 1987. This was partly driven by the unwinding of the global yen carry trade, which had a ripple effect on other markets, including the US, where volatility spiked to levels not seen since March 2020. Despite these challenges, the situation has started to stabilize, with the VIX moderating and markets finding their footing.
In Europe, mixed economic data painted a cautious picture, with industrial gains tempered by concerns about inflation and potential rate cuts. Germany saw a notable rise in company bankruptcies, while France experienced an unexpected drop in unemployment, signalling some positive momentum. Meanwhile, in China, the markets were mixed, with the Hang Seng posting its first weekly gain in four weeks, even as mainland stocks struggled with weak sentiment. Across these regions, the focus remains on navigating the delicate balance between growth and stability.
We remain optimistic that despite the current volatility, the markets will adjust as central banks and governments continue to support economic recovery.
Published 13/8/2024
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