What happened in the markets: 29 July - 02 August 2024
Aries Yuangga, Wakil Penasihat Berjangka
The financial markets experienced a whirlwind of activity during the week of July 29 to August 2, 2024. Investors navigated a complex landscape of economic data releases, corporate earnings reports, and central bank meetings. This period was marked by significant market movements and key turning points that will likely influence performance in the coming months. In this article, we will break down the main events of the week, examine the stocks that were most affected, and provide an outlook for the week ahead.
Last Week at a Glance
The final week of July saw intense market activity with numerous earnings reports, central bank meetings, and key labor market data releases. The Federal Reserve maintained its policy rate at 5.25% to 5.50% but hinted at possible rate cuts due to rising labor market risks. This shift, along with weaker-than-expected labor market data showing only 114,000 jobs added and a rise in unemployment to 4.3%, fueled expectations for an easing cycle. As a result, bond markets rallied, with the 2-year Treasury yield falling below 4.0% and the 10-year yield dropping below 3.90%. However, equities faced turbulence, with the tech-heavy Nasdaq entering correction territory and major indices like the Dow Jones and S&P 500 declining. Market volatility spiked to levels not seen since late 2022, reflecting the uncertainty and shifting economic landscape.
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:
Amazon (AMZN): 🛒 Fell by 8% following its earnings report. Despite strong growth figures, the company's revenue forecast disappointed investors. The cautious guidance on AI's long-term impact added to the negative sentiment.
Intel (INTC): 💻 Experienced a dramatic 26% drop after announcing plans to cut more than 15,000 jobs and suspend its dividend. The company's revenue estimates fell short of Wall Street's expectations, leading to multiple analyst downgrades.
PHLX Semiconductor Index (SOX): 🧩 The index, which includes key players like Nvidia (NVDA), Taiwan Semiconductor (TSM), and Micron (MU), fell over 5%, continuing its volatile performance and is now down 22% from its peak three weeks ago.
Procter & Gamble (PG), PepsiCo (PEP), McDonald's (MCD), and Dollar General (DG): 🛡️ These companies saw gains as investors shifted towards more defensive stocks amid economic uncertainty. These stocks are typically favored during periods of market volatility due to their stable cash flows and essential product offerings.
The Week Ahead: August 05 - 09, 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.
ISM Services PMI (July): Scheduled for release on August 7, this indicator will provide insights into the performance of the service sector, which is a major component of the U.S. economy.
Consumer Credit Data: Due on August 9, this data will shed light on consumer borrowing trends, which can impact consumer spending and economic growth.
No major central bank meetings are scheduled for the week, but investors will closely monitor any statements or speeches from Fed officials that could provide further clues on the direction of monetary policy.
Key Earnings Reports
The earnings season continues, albeit at a slower pace compared to the previous week. Key companies scheduled to report include:
Eli Lilly (LLY): 💊 Investors will be looking for updates on the company's drug pipeline and any new developments in its ongoing clinical trials.
Caterpillar (CAT): 🏗️ As a bellwether for the industrial sector, Caterpillar's earnings will be scrutinized for signs of economic activity and demand for heavy machinery.
Disney (DIS): 🎬 Disney's performance in its streaming services, theme parks, and recent movie releases will be key areas of focus.
Novo Nordisk (NVO): 💉 The company's earnings will provide insights into the pharmaceutical sector, particularly in diabetes and obesity treatments.
CSX (CSX): 🚂 As a major transportation company, CSX's earnings will offer clues about the health of the logistics and freight industry.
Conclusion
The week of July 29 to August 2, 2024, was a pivotal period in the financial markets, characterized by significant economic data releases, corporate earnings reports, and central bank activities. The Federal Reserve's hint at potential rate cuts, coupled with weaker labor market data, spurred a bond market rally and heightened volatility in equities. Key tech and semiconductor stocks faced notable declines, while defensive stocks gained as investors sought stability amidst uncertainty. As we move into the week of August 5, attention will shift to the ISM Services PMI and consumer credit data for further economic insights. Key earnings reports from companies like Eli Lilly, Caterpillar, Disney, Novo Nordisk, and CSX will be closely monitored for indicators of sector-specific performance and broader economic health.
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.
