Market Highlights π‘ - 2 August 2024
Global stock markets declined as global factories struggled in July due to weak demand.
πΊπΈ S&P 500 Index: -1.37% π
πΊπΈ Nasdaq Index: -2.30% π
πͺπΊ Stoxx 600 Index: -1.23% π
π―π΅ Nikkei 225 Index: -2.49% π
ππ° Hang Seng Index: -0.23% π
π¨π³ CSI 300 Index: -0.66% π
US Markets saw a significant decline on Thursday, with the S&P 500 and Nasdaq Composite indices falling 1.4% and 2.3% respectively. This was due to new economic data increasing concerns about a potential recession and the Federal Reserve maintaining tight monetary policy.
The US ISM Manufacturing PMI dropped from 48.5 in June to 46.8 in July, below the expected 48.8, amid weak demand and declining output, with new orders continuing to shrink.
For the week ending July 27, US initial jobless claims rose to 249K, an increase of 14K and the highest level in a year (expected 236K), further indicating a slowing labor market.
Eurozone manufacturing continued to shrink, with the HCOB PMI at 45.8 in July, unchanged from June, due to a sharp decline in orders and output.
Japan's factory activity declined, with the final au Jibun Bank PMI dropping from 50.0 in June to 49.1 in July due to weak domestic and external demand and increased inflationary pressures.
Asia-Pacific stock markets weakened, with the Hong Kong Hang Seng Index and Shanghai CSI 300 Index falling 0.2% and 0.7% respectively, due to weak demand and persistent deflation causing unexpected shrinkage in Chinese factory activity, which continued to weigh on stock prices.
Chinese factory activity shrank, with the Caixin/S&P Global Manufacturing PMI falling from 51.8 to 49.8 in July (expected 51.5), due to weak domestic demand and reduced client budgets.
π‘ Upcoming Events: π‘
At the end of the week, we will see the release of US non-farm payroll changes and the unemployment rate.
π‘ Today's Key Points: π‘
1. Amazon's $Amazon.com(AMZN)$ stock price fell as the company expects third-quarter 2024 profits to be between $11.5 billion and $15 billion, below the anticipated $15.7 billion. This is due to increased spending on artificial intelligence services, while AWS revenue grew 19% to $26.3 billion in Q2 2024. However, e-commerce performance was weak, with seller services and advertising revenue missing targets.
Amazon
2. Intel $Intel(INTC)$
Intel CEO
3. Apple $Apple(AAPL)$ reported a 6.5% decline in sales in China for Q3 2024, down to USD 14.7 billion, below the expected USD 15.3 billion, due to increased competition and economic challenges. However, overall revenue grew 5% to $85.8 billion, surpassing expectations, supported by a 24% surge in iPad sales to $7.16 billion following the release of new models.
Apple
4. The Chinese State Council has introduced a five-year urbanization plan to ensure 70% of the population lives in urban areas to stimulate demand and support the housing market. This plan involves easing restrictions on rural residents moving to cities with fewer than 5 million people.
β Key Takeaway:
The latest trading day broke the trend of "bad news is good news" for US stocks, as markets usually rise on weak economic data due to expectations of Fed rate cuts. However, there is growing concern that the Fed's inaction might harm the economy and profits, and any future rate cuts might be too late.
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Based on the market highlights for August 2, 2024, here are the key points:
Global stock markets declined: Global stock markets experienced a decline as global factories struggled in July due to weak demand.
US Markets: The S&P 500 Index fell by 1.37% and the Nasdaq Index dropped by 2.30%. This decline was attributed to new economic data that raised concerns about a potential recession and the Federal Reserve maintaining tight monetary policy.
US ISM Manufacturing PMI: The US ISM Manufacturing PMI dropped from 48.5 in June to 46.8 in July, below the expected 48.8. Weak demand and declining output contributed to this decrease, with new orders continuing to shrink.
US initial jobless claims: For the week ending July 27, US initial jobless claims rose to 249K, an increase of 14K and the highest level in a year. This indicates a slowing labor market.
Eurozone manufacturing: Eurozone manufacturing continued to shrink, with the HCOB PMI at 45.8 in July, unchanged from June. This was due to a sharp decline in orders and output.
Japan's factory activity: Japan's factory activity declined, with the final au Jibun Bank PMI dropping from 50.0 in June to 49.1 in July. The decline was attributed to market position.
Apple's sales in China: Apple reported a 6.5% decline in sales in China for Q3 2024, down to USD 14.7 billion, below the expected USD 15.3 billion. Increased competition and economic challenges were cited as the reasons for the decline. However, overall revenue grew 5% to $85.8 billion, supported by a surge in iPad sales.
Chinese urbanization plan: The Chinese State Council introduced a five-year urbanization plan to ensure 70% of the population lives in urban areas. This plan aims to stimulate demand and support the housing market by easing restrictions on rural residents moving to cities with fewer than 5 million people.
In summary, global stock markets declined due to weak demand in global factories. Concerns about a potential recession and the Federal Reserve's monetary policy contributed to the decline in US markets. Weak economic data, such as the US ISM Manufacturing PMI and rising initial jobless claims, further added to the concerns. Eurozone manufacturing and Japan's factory activity also experienced declines. Apple reported a decline in sales in China but saw overall revenue growth. The Chinese government introduced an urbanization plan to stimulate demand and support the housing market.
Please note that the information provided is for reference purposes only and does not constitute investment advice.