North American News
US Stock Markets Surge Late, But Nasdaq Ends Three-Week Winning Streak
August Ends with a Dramatic Finish: S&P 500, DJIA Post Gains; Nasdaq’s Streak Ends
In a roller-coaster August session, US stock markets experienced a dramatic turnaround in the final hours of trading. After a volatile day where the S&P 500 initially dipped into negative territory, a surge of buying in the late afternoon helped lift the index and other major benchmarks to positive closes. This month-end rally provided a strong finish to a tumultuous month.
Daily Market Highlights:
- S&P 500: +1.0%
- Nasdaq Composite: +1.1%
- DJIA: +0.6%
- Russell 2000: +0.3%
Weekly Performance:
- S&P 500: +0.25%
- Nasdaq Composite: -0.9%
- Russell 2000: -0.4%
Monthly Performance:
- S&P 500: +2.3%
- Nasdaq Composite: +0.6%
- DJIA: +1.8%
- Russell 2000: -2.0%
Despite today’s gains, the Nasdaq Composite ended its three-week winning streak, with its monthly chart now featuring a double doji pattern. This technical setup often signals a potential for significant price movement in the near future.
The late-day buying spree was fueled by month-end technical factors, providing a fitting conclusion to a dynamic month of trading.
Third-Quarter GDP Growth Estimate Increased
In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2024 is 2.5 percent on August 30, up from 2.0 percent on August 26. After recent releases from the US Census Bureau and the US Bureau of Economic Analysis, the nowcasts of third-quarter real personal consumption expenditures growth and third-quarter real gross private domestic investment growth increased from 3.0 percent and -2.4 percent, respectively, to 3.8 percent and -0.1 percent, while the nowcast of the contribution of the change in real net exports to third-quarter real GDP growth decreased from 0.04 percentage points to -0.39 percentage points.
US August UMich final consumer sentiment 67.9 vs 68.0 expected
- Final revisions to the August UMich consumer survey
- Prelim was 67.8
- Prior was 66.4
- Current conditions 61.3 vs 60.9 prelim (62.7 prior)
- Expectations 72.1 vs 72.1 prelim (68.8 prior)
- 1-year inflation 2.8% vs 2.9% prelim
- 5-year inflation 3.0% vs 3.0% prelim
Comments from survey director Joanne Hsu:
Consumer sentiment confirmed its early-month reading; after drifting down for four months, sentiment inched up 1.5 index points above July and is currently 36% above the all-time historic low from June 2022. Consumers’ short- and long-run economic outlook improved, with both figures reaching their most favorable levels since April 2024 and a particularly sizable 10% improvement for long-run expectations that was seen across age and income groups. Sentiment this month reflects a slight rise in sentiment among Independents, as Democrats and Republicans offset each other almost perfectly. Democrats exhibited a large 10% increase in sentiment while Republicans posted an equally sized decline. These patterns resulted from a sea change in election expectations this month with Harris emerging as the Democratic candidate for president. In July, 51% of consumers expected Trump to win the election versus 37% for Biden. In August, election expectations flipped; 36% expected Trump to win compared with 54% for Harris. Economic and election expectations are both subject to change as election day approaches.
US July core PCE +2.6% y/y vs +2.7% expected
- US PCE data for July 2024 along with US personal income and personal consumption
- Prior was +2.6%
- PCE core +0.2% m/m vs +0.2% expected (unrounded +0.161%)
- Prior m/m +0.2%
- Headline inflation PCE +2.5% y/y vs +2.6% expected (Prior +2.5%)
- Deflator +0.2% m/m vs +0.2% expected (prior was +0.1%)
- Unrounded m/m +0.155%
Consumer spending and income for July:
- Personal income +0.3% vs +0.2% expected. Prior month +0.2%
- Personal spending +0.5% vs +0.5% expected. Prior month +0.3%
- Real personal spending +0.4% vs +0.2% prior
Dallas Fed trimmed mean PCE price index for July 1.7% versus 1.8% in June
- One-month PCE inflation, annual rate
- 12 month trimmed mean 2.7% vs 2.8% prior
Looking through the data here are some notable changes:
- Eggs: Massive increase of 90.9% (annualized 1-month change)
- Window coverings: Large decrease of -27.3%
- Used autos: Significant decrease of -25.2%
- Jewelry: Notable decrease of -20.4%
- Natural gas: Decrease of -7.7%
- Physician services: Slight decrease of -2.2%
- Electricity: Slight increase of 1.3%
- Fresh milk: Substantial increase of 25.1%
The moves in some of the heavier weightings:
- Owner-occupied stationary homes Change: +4.4% (annualized 1-month % change)
- Nonprofit hospitals’ services to households Change: -0.8%
- Other purchased meals Change: +2.6%
- Physician services Change: -2.2%
- Tenant-occupied stationary homes and landlord durables Change: +6.0%
- Final consumption expenditures of nonprofit institutions serving households Change: +11.0%
US home prices to climb steadily through 2026 but sales expected to dip – Reuters Poll
- Reuters poll – U.S. home prices to rise 5.4% in 2024, 3.3% in 2025, and 3.4% in 2026 (vs 5.0%, 3.3%, and 3.4% in May poll).
- Reuters poll – U.S. existing home sales to rise to 4.15 million unit rate in Q4, 4.24 in Q1 2025 (vs 4.28 and 4.40 million in May poll).
3-4% of Goldman Sachs staff will be laid off – WSJ
Goldman Sachs plans to layoff 3-4% of its workforce or between 1300 and 1800 people, according to the WSJ.
This shouldn’t come as a surprise as the company trims 2-7% of its workforce annually on performance factors. The layoffs have started and will continue through the autumn.
Canada June GDP +0.0% vs +0.1% expected
- Canada June monthly GDP data
- Prior was +0.2%
- Services industries +0.1% vs +0.1% prior
- Goods -0.4% vs +0.4% prior
- Manufacturing -1.5% vs +1.0% prior
- July advance GDP 0.0%
Real gross domestic product was essentially unchanged in June, following a 0.1% increase in May. Goods-producing industries (-0.4%) saw its largest decrease since December 2023 as declines in manufacturing and construction were partially offset by increases in utilities and agriculture. Services-producing industries (+0.1%) increased for the third consecutive month in June 2024. Overall, 12 of 20 sectors expanded in June.
Commodities
Gold Slumps Below $2,500 Post-US PCE Data
Gold Price Movement:
- Current Price: $2,497
- Change: Down over 0.90% on Friday.
Gold prices fell below $2,500 following the release of the US Personal Consumption Expenditures (PCE) report. The report indicated a continued decline in inflation, leading markets to reassess expectations for Federal Reserve rate cuts.
Key Points:
- US PCE Data: The core PCE Price Index for July showed a 2.6% increase YoY, slightly below the 2.7% estimate. The headline PCE came in at 2.5% YoY, underperforming the forecast of a 2.6% rise.
- Fed Rate Cut Expectations: Following the PCE report, traders adjusted their bets for the September Fed meeting, favoring a 25 basis points (bps) cut with odds at 69%, while the likelihood of a 50 bps cut fell to 31%, according to the CME FedWatch Tool.
- Market Sentiment: Despite a cautious policy stance from the Fed, there is speculation about potential significant easing. December 2024 CBOT fed funds future rates contract suggests investors are anticipating up to 97 bps of Fed easing this year.
- Consumer Data: Consumer spending rose, but income growth was sluggish, raising concerns about sustained spending. Consumer Sentiment increased from 66.4 in July to 67.9 in August, while inflation expectations for one year dipped to 2.8%.
The mixed signals from economic data and the Fed’s policy stance have led to increased uncertainty in the gold market.
Oil Prices Dive as OPEC Rumors Swirl
WTI Crude Oil Weekly Performance:
- Closing Price: $73.57, down $2.33 or 3% on Friday.
- Weekly Decline: Lowest close since August 2 and the second-worst since February.
Oil prices ended the week sharply lower after a strong start. The decline followed reports from Reuters that OPEC plans to gradually increase production starting in October. This news triggered a significant sell-off, marking a rough end to the week for crude oil. Expect ongoing speculation and rumors about OPEC’s production strategy to influence prices in the coming month.
Baker Hughes Rig Count: U.S. and Canada Update
U.S. Rig Count:
- Total Rig Count: Down 2 to 583
- Oil Rigs: Unchanged at 483
- Gas Rigs: Down 2 to 95
- Miscellaneous Rigs: Unchanged at 5
- Year-over-Year Comparison:
- Total Rig Count: Down 48 from 631
- Oil Rigs: Down 29
- Gas Rigs: Down 19
- Miscellaneous Rigs: Unchanged
- Offshore Rig Count: Unchanged at 19, up 2 year-over-year
Canada Rig Count:
- Total Rig Count: Up 1 to 220
- Oil Rigs: Unchanged at 153
- Gas Rigs: Up 1 to 67
- Year-over-Year Comparison:
- Total Rig Count: Up 33 from 187
- Oil Rigs: Up 38
- Gas Rigs: Down 5
OPEC+ likely to proceed with planned output hike from October
- Headline from Reuters
OPEC+ is set to proceed with a planned oil output hike from October, as Libyan outages and pledged cuts by some members to compensate for overproduction counter the impact of sluggish demand, six sources from the producer group told Reuters.
Eight OPEC+ members are scheduled to boost output by 180,000 barrels per day in October, as part of a plan to begin unwinding their most recent layer of output cuts of 2.2 million bpd while keeping other cuts in place until end-2025.
More here.
EU News
European close: Strong week that finished with some gains
- Closing changes on the day and the week in the major European stock markets
On the day:
- Stoxx 600 +0.2%
- German DAX +0.1%
- Francis CAC flat
- UK’s FTSE 100 flat
- Spain’s IBEX +0.4%
- Italy’s FTSE MIB +0.6%
On the week:
- Stoxx 600 +1.4% (record weekly close, fourth week of gains)
- German DAX +1.6% (record close)
- Francis CAC +0.8%
- UK’s FTSE 100 +0.6%
- Spain’s IBEX +1.2%
- Italy’s FTSE MIB +2.2%
Eurozone flash HICP YY 2.2% vs 2.2% expected
- Data for August 2024
- Eurozone flash HICP YY: 2.2% vs 2.2% expected
- Eurozone flash ex F&E HICP YY: % vs 2.7% expected
- Eurozone flash ex F, E, A & T HICP YY: % vs 2.8% expected
German import prices MM -0.4% vs 0.0% expected
- Data for July 2024
- German import prices MM: -0.4% vs 0.0% expected
- German import prices YY: 0.9% vs 0.7% prior
German Unemployment Rate 6.0% vs 6.0% expected
- Data for August 2024
- German Unemployment Rate: 6.0% vs 6.0% expected
France prelim HICP YY 2.2% vs 2.1% expected
- Data for August 2024
- France prelim HICP YY: 2.2% vs 2.1% expected
- France prelim HICP MM: % vs 0.5% expected
- France CPI YY: 1.9% vs 1.8% expected
- France CPI MM: % vs 0.5% expected
France GDP QQ final 0.2% vs 0.3% expected
- Data for Q2 2024
- France GDP QQ final: 0.2% vs 0.3% expected
- France GDP YY final: % vs 1.1% expected
France producer prices YY -5.4% vs -6.0% prior
- Data for July 2024
- France producer prices YY: -5.4% vs -6.0% prior
- France producer prices MM: 0.2% vs -0.3% prior
Spanish current account balance 5.02B vs 5.56B prior
- Data for June 2024
- Spanish current account balance: 5.02B vs 5.56B prior
BoE consumer credit 1.215B vs 1.300B expected
- Data for July 2024
- BoE consumer credit: B vs 1.300B expected
- UK mortgage lending: B vs 2.450B expected
UK nationwide house prices YY 2.4% vs 2.9% expected
- Data for August 2024
- UK nationwide house prices YY: 2.4% vs 2.9% expected
- UK nationwide house prices MM: -0.2% vs 0.2% expected
Swiss KOF indicator 101.6 vs 100.6 expected
- Data for August 2024
- Swiss KOF indicator 101.6 vs 100.6 expected
ECB’s Schnabel urges caution and emphasizes data-driven policy
- ECB comments
- ECB’s Schnabel: Incoming data have broadly confirmed the baseline outlook.
- ECB’s Schnabel: Confidence is not knowledge. History will not judge our intentions but our success in delivering on our mandate.
- ECB’s Schnabel: The closer policy rates get to the upper band of estimates of the neutral rate of interest, the more cautious we should be to avoid that policy itself becomes a factor slowing.
- ECB’s Schnabel: The pace of policy easing cannot be mechanical. It needs to rest on data and analysis.
- ECB’s Schnabel: Wage pass-through may be stronger than expected.
- ECB’s Schnabel: It is conceivable, however, that the conditions on which the modal outlook rests do not materialize.
- ECB’s Schnabel: In the alternative scenario, growth in unit labor costs would not come down as quickly as projected.
ECB Kazaks says open to discussing a September cut
- More ECB speak
- ECB Kazaks: Services inflation remains sticky
- ECB Kazaks: Open to a September discussion on another rate cut
ECB Muller says confidence grows in September cut but after that is less certain
- More ECB speak
- ECB Muller: confidence is growing in a September rate cut
- ECB Muller: the policy path after the September meeting is less certain
Asia-Pacific-World News
China regulator to guide Alibaba towards better compliance and service quality
- China market regular news
China Markets Regulator: Will further guide Alibaba Group in improving compliance, quality of service, efficiency.
Deepening downturn expected in China’s property market for 2024-2025
- Reuters poll
- Reuters poll: China home prices growth expected at -8.5% y/y in 2024 (vs -5.0% forecast in May poll).
- Reuters poll: China home prices growth expected at -3.9% y/y in 2025 (vs 0.0% forecast in May poll).
- Reuters poll: China property sales expected at -16.0% y/y in 2024 (vs -10.0% forecast in May poll).
- Reuters poll: China property investment expected at -10.3% y/y in 2024 (vs -10.0% forecast in May poll)
PBOC sets the USDCNY midpoint at 7.1124 vs 7.1116 estimate
- Prior fixing was at 7.1299
Australia Retail sales for July 0.0% vs 0.3% estimate
- Australia retail sales MoM for July Final
- Prior 0.5%
- Retail Sales (Final) 0.0% vs 0.3% estimate
Details:
- Clothing, footwear, and personal accessories: -0.5% (largest fall)
- Department stores: -0.4%
- Cafes, restaurants, and takeaway food: -0.2%
- Household goods retailing: 0.0% (unchanged)
- Other retailing: 0.0% (unchanged)
- Food retailing: 0.2% (only industry with a rise)
Ben Dorber, ABS head of retail statistics, said: “After rises in the past two months (both by 0.5%) boosted by mid-year sales activity, the higher level of retail turnover was maintained in July.”
New Zealand building consents for July +26.2% vs -17.0% last month (revised from -13.8%)
- NZ Building consents for July 2024
- Prio rmonth -17.0% revised from -13.8%)
- Building consents for July 26.2%
“A higher number of working days contributed to the increase in homes consented in July 2024 when compared with July 2023,” said, cnstruction and property statistics manager Michael Heslop.
There were 23 working days in July 2024 compared with 20 in July 2023, with Matariki being observed in June in 2024 (compared with July in 2023). More working days in a month means more time for building consent authorities to issue consents for new homes.
In the month of July 2024 there were 1,685 stand-alone houses consented, up 42 percent compared with July 2023. There were 1,667 multi-unit homes consented, down 11 percent over the same period.
“A large project in the Queenstown-Lakes district contributed to a sharp rise in stand-alone houses consented in July 2024,” Heslop said.
Japan’s MOF reports zero yen intervention from July 30 to Aug 28
- Intervention news
Japan currency intervention amounted to 0 yen from July 30 to Aug 28 – MOF.
Tokyo August inflation data: Headline 2.6% y/y (prior 2.2%)
- Tokyo CPI data leads the national result by about three weeks
Tokyo CPI for August 2024
- Excluding Fresh Food & Energy 1.6 % y/y vs 1.1% last month
- Excluding Fresh Food 2.4% y/y vs 2.2% est. Prior month 2.2%
- Headline CPI 2.6% vs 2.2% last month
Japan Preliminary Industrial production MoM 2.8% vs 3.3% estimate
- Preliminary Industrial production for July
- Prior month -4.2%
- Industrial production MoM 2.8% vs 3.3% estimate
- Industrial Production YoY 2.6% vs 2.9% estimate. Previously 3.7% revised from 3.8%
- IP forecast 2 month ahead (Sept) -3.3% vs Prev 0.7%
- IP Forecast 1 month ahead (Aug) 2.2% vs prev 6.5%
Japan retail sales YoY for July 2.6% vs 2.9% estimate
- Japan Retail sales for July
- Prior month 3.8%
- Retail sales for July 2.6% vs 2.9% estimate
- Large Scale Retail Sales 1.0% vs 7% last month
Japan Unemployment rate for July 2.7% vs 2.5% estimate
- Japan employment For July
- Prior month 2.5%
- Job/Applicants ratio 1.24 versus expected 1.23. Previous 1.23
- Unemployment rate 2.7% versus 2.5% in June
Japan construction orders YoY 62.8% vs -19.7% prior
- Data for July 2024
Japan construction orders YoY: 62.8% vs -19.7% prior
Japan housing starts YoY -0.2% vs -0.1% expected
- Data for July 2024
Japan housing starts YoY: -0.2% vs -0.1% expected
Cryptocurrency News
Ethereum’s Development Surge Meets Bearish Price Trend: Key Insights and Market Movements
Ethereum’s Latest Market Update:
Development Activity:
- Top Ranking: Ethereum is currently the most actively developed crypto project, according to Santiment data.
- Development Events: Ethereum has recorded over 180K DevActivity events, despite a 0.6% decline in activity over the past month. BNB Chain, the second most active, lags significantly behind with 90.1K events.
Price and Trendline:
- Current Price: Ethereum is trading down 0.5% at $1,940.
- Trendline Analysis: Ethereum has crossed below a key trendline, suggesting potential further decline toward the $2,000 mark.
Centralization and Staking:
- Centralization: 44% of Ethereum’s supply is concentrated within ten key wallets. While this level of centralization can sometimes be seen as bearish, in Ethereum’s case, it indicates high staking activity.
- Impact of Staking: High staking activity typically reduces supply pressure and can lead to price surges during periods of increased demand.
ETFs and Holdings:
- ETFs Flows: Ethereum ETFs saw negative flows, with outflows of $1.7 million on Thursday, affecting Grayscale’s ETHE and ETH Mini Trust.
- Vitalik Buterin’s Holdings: Ethereum co-founder Vitalik Buterin has potentially reduced his holdings from 325K ETH to 240K ETH, valued at approximately $592 million as of Friday.
Key Points:
- Ethereum remains the leading project in terms of development activity.
- Centralization within a few wallets indicates high staking but is not necessarily bearish.
- Price action suggests potential declines, with Ethereum trading below a significant trendline.
XRP Drops to $0.55 as Ripple CTO Criticizes Token Giveaway
XRP Performance:
- Current Price: $0.55, down 7.6% since Monday.
Ripple’s (XRP) price has declined following remarks from Chief Technical Officer David Schwartz. Schwartz criticized the practice of giving away XRP tokens, suggesting it’s worse than selling them. His comments have stirred concerns among investors.
Key Points:
- Schwartz’s Criticism: He argues that giveaways are detrimental because they attract fraudsters and create selling pressure, effectively harming the token’s value.
- Market Activity: XRP whales have been distributing their holdings, while retail traders have been accumulating. This distribution by large holders often signals bearish sentiment.
- Ripple’s New Initiatives: Ripple’s stablecoin, Ripple USD (RUSD), is in private beta and will soon be available to institutions pending regulatory approval.
As XRP trades lower, these developments add to the uncertainty surrounding its market outlook.
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