What happened in the markets : 12 August - 16 August 2024

19 Aug

Aries Yuangga, Wakil Penasihat Berjangka

The second week of August 2024 was marked by significant volatility in global financial markets. Investors navigated a challenging landscape filled with mixed economic data, geopolitical tensions, and shifting market dynamics. This article provides a comprehensive overview of the key events that shaped the markets last week, highlighting the top movers and shakers, and offering insights into what lies ahead.

Last Week at a Glance

The week of August 12-16 saw global stock markets react to a series of economic indicators and corporate earnings reports that painted a mixed picture of the global economy. In the U.S., inflation data came in higher than expected, fueling concerns that the Federal Reserve might maintain its hawkish stance on interest rates. The Consumer Price Index (CPI) rose by 3.2% year-over-year in July, slightly above the forecasted 3.0%. This unexpected uptick in inflation raised fears of a potential rate hike in the upcoming Federal Open Market Committee (FOMC) meeting. In Europe, the focus was on the Eurozone’s GDP figures, which showed a modest growth of 0.3% for Q2 2024. While this growth was better than the previous quarter’s contraction, it still highlighted the sluggish recovery in the region. The ongoing energy crisis and persistent inflationary pressures continued to weigh on consumer sentiment and economic activity. Asian markets were not immune to the global trends, with China’s economic data revealing a slower-than-expected recovery. Retail sales and industrial production both missed expectations, leading to renewed concerns about the health of the world’s second-largest economy. The Chinese government’s stimulus measures, while supportive, have yet to provide the needed boost to the economy.

Top movers & shakers🎢

Several individual stocks made headlines with significant price movements driven by a variety of factors, including quarterly earnings reports, analyst ratings, and strategic announcements. Among the notable movers were:

Apple Inc. (AAPL): 🍎 Dropped 4.5% after reports emerged of potential delays in the launch of its next-generation iPhone, with supply chain disruptions and weaker-than-expected demand in China cited as the primary causes.
ExxonMobil (XOM): 🛢️ Gained 3.2% as crude oil prices climbed to a seven-month high, supported by production cuts from OPEC+ and geopolitical tensions in the Middle East.
LVMH (MC.PA): 👛 Declined by 3.8% following the release of weaker-than-expected sales growth in China, a crucial market for luxury goods.
Deutsche Bank (DB): 🏦 Dropped 5.1% after the bank announced higher-than-expected provisions for bad loans, raising concerns about the European banking sector's health.
Alibaba (BABA): 🛒 Fell 6.7% after disappointing earnings, with slower revenue growth due to weak consumer spending in China and increased competition in the e-commerce space.

The Week Ahead: August 19 - 23, 2024

Looking ahead, the coming week is expected to be less hectic but still filled with significant economic data releases and corporate earnings reports that could influence market direction.

CPI (YoY) - Eurozone (August 20, 2024): 💶 The Eurozone’s inflation data for July will be released on August 20. Analysts expect the headline inflation rate to remain elevated, which could put additional pressure on the European Central Bank (ECB) to tighten its monetary policy further.
Crude Oil Inventories (August 21, 2024): 🛢️ On August 21, the U.S. crude oil inventories report will be released. This data is crucial for understanding supply levels and the overall health of the energy sector.
Federal Reserve Minutes (August 22, 2024): 📜 Investors will closely scrutinize the minutes from the Federal Reserve's latest meeting, set to be released on August 22. The document could provide valuable clues about the Fed’s future interest rate plans, especially in light of the recent inflation data.
U.S. Initial Jobless Claims (August 22, 2024): 📉 The initial jobless claims report will be released on August 22. This data is an important indicator of labor market health and could influence expectations about the Fed’s policy moves.
S&P Global US Manufacturing and Services PMI (August 22, 2024): 📊 The PMI data for August, to be released on August 22, will offer insight into the performance of both the manufacturing and services sectors. This is a key indicator of economic health.
U.S. Existing Home Sales (August 22, 2024): 🏘️ The existing home sales report for July will also be released on August 22. This data provides valuable insights into the real estate market and consumer demand.
New Home Sales (August 23, 2024): 🏡 The U.S. new home sales data for July is set to be released on August 23. This report will offer additional insights into the health of the housing market and overall economic conditions.

Key Earnings Reports

The earnings season continues, albeit at a slower pace compared to the previous week. Key companies scheduled to report include:

Target (TGT): 🎯 Target's earnings will offer additional insights into U.S. consumer behavior. Investors will be paying attention to sales figures, profit margins, and how the retailer is navigating the challenges posed by inflation and shifts in consumer spending.
Toll Brothers (TOL): 🏡 The luxury home builder’s earnings report will be closely watched for insights into the U.S. housing market, particularly in the context of rising interest rates. Investors will look for updates on demand for high-end homes and any signs of a slowdown in the sector.
Palo Alto Networks (PANW): 🔐 As a leading cybersecurity firm, Palo Alto Networks’ earnings will provide a glimpse into the state of enterprise spending on security solutions. The company’s outlook on demand for cybersecurity services, particularly in light of increasing cyber threats, will be a key area of focus.

Conclusion

The week of August 12-16, 2024, was marked by significant market volatility, driven by mixed economic data and geopolitical uncertainties. In the U.S., higher-than-expected inflation raised concerns about future Federal Reserve rate hikes, while Europe's modest GDP growth and Asia's disappointing economic data highlighted ongoing global challenges. Key stock movements included declines in Apple and Alibaba, alongside gains for ExxonMobil. Looking ahead, the focus will be on critical economic releases, including inflation data and Federal Reserve minutes, alongside key earnings reports from companies like Target and Toll Brothers. These developments will be crucial for shaping market expectations and trends.

Source:

https://www.schwab.com/learn/story/schwab-market-update

https://www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-market-weekly-update

*Disclaimer:

This information is provided for general information purposes only. Consider your investment objectives, financial resources and other relevant circumstances carefully before investing. This is not an invitation or an offer to invest, nor is it financial advice or a recommendation to buy or sell any investment.

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