Global Stock Market- Inflation Cools in US, Fuels Rebound
Global Stock Markets-Weekly Updates (10- 14 July 2023)
The global stock market indexes bounced back this week after registering a loss in the previous week. The major global market indexes ended higher due to the strong economic data reported in the US, more stimulus in China, and on quarterly earnings.
The US Stock Markets – Weekly Updates
The US stock markets registered strong gains this week, Dow, S&P 500, and Nasdaq ended above 2% during the week. S&P 500 ended the week just around 6% short of an intraday all-time high that was made early in 2022. The strong performance of casino operators, regional banks, and asset managers supported the index while the pharma and defensive consumer staple sector’s performance remain weak.
The US markets started the week on a positive note and gradually indexes gained strength as the week progressed. On Wednesday, the data showed US CPI inflation rose at the slowest pace since March 2021, while Core inflation reading also came below expectation. The US markets reacted positively after the more encouraging Producer Price Index inflation data that was released on Thursday.
The other economic data released during the week indicated that the US economy is resilient and need not have to face recession. The US market sentiment was upbeat on Friday after Michigan’s consumer sentiments data showed rose to its highest levels in nearly two years, above market expectations. The consumer market survey showed strong labor market conditions, and the weekly jobless claims fell below market expectations.
The quarterly earnings session kicked off on Friday with big banks, the profits from JPMorgan and Wells Fargo make it easy to forget there was a banking crisis this year. The 10-year US Treasury yields, which hit above 4% in the previous week after FOMC minutes fall back to 3.83% on Friday. As investors are now anticipating that the July rate hike could be the final one.
European Stock Market Indexes- Weekly Updates
European stock market indexes made the biggest weekly gain in about three and a half months, as inflation grew at the slowest pace in the US. Investors cheered after the cooling inflation reading from the US, as this indicated that the Fed is likely to end the rate hike soon.
The market sentiments further improved after China’s stimulus measure was announced for the property sectors. The minutes of the European Central Bank’s (ECB) last meeting indicated further rate hikes due to persistently high inflation but signaled that rate is near peak level.
The data released this week showed the UK’s GDP growth contracted less than expected. UK’s wages grew at a three months high while the jobless rate also ticked up at three months high. Meanwhile, the increase in mortgage rates hit the housing markets in Britain.
Asian Stock Markets Updates
The major Asian stock market indexes ended higher during the week, due to cooler-than-inflation data from the US and stimulus measures from China. The Indian stock market indexes also gained during the week. You can read about the Indian stock market weekly updates here.
Japan Stock Market
Japan’s stock market index closed almost flat this week, as investors booked profits after the recent rally in the markets. Investors mostly ignore the positive sentiments in the global and regional markets and remain cautious this week.
Chinese Stock Market
Chinese equity markets ended higher during the week after Beijing announced stimulus measures for property developers and pledged more measures to support the country’s flagging economy. The inflation data released during the week showed CPI is unchanged but Producer Price Index fell more than expected for nine consecutive months.
The export data released in China showed that its exports decline sharply in nearly 3 years on weak global demand, while imports also shrank in June. Meanwhile, the new bank loan rose higher than expected in June.
Hong Kong benchmark, the Hang Seng index also closed higher during the week.
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