Global Market News

Global Equities Decline

Global equities declined in another volatile week of trading amid signs that the US economy is slowing more quickly than expected. The Dow Jones and S&P 500 dropped 2.10% and 2.06% on the week, respectively, while the Nasdaq lost 3.35%. The US 10-year Treasury note plummeted to 3.80%. The price of a barrel of West Texas Intermediate crude oil continued its decline, falling more than 4% to $73.97. Volatility, as measured by the CBOE Volatility Index, jumped to 23.39.

US data stokes fears of recession

A rise in the unemployment rate and weaker-than-expected growth in nonfarm payrolls stoked recession fears, sending stocks and bond markets down on Friday. The US reported 114,000 jobs were added in July, the weakest growth in nonfarm payrolls since April, and unemployment rose to 4.3%, the highest level since October 2021. Investors are now expecting the Federal Reserve to cut rates beyond the 0.25% cut expected in September, with markets pricing in a 90% chance of at least 100 bps of cuts by the end of the year.

Updated Market Figures

International Developments

Maduro Commits Electoral Fraud in Venezuelan Elections, US Recognizes Opposition Candidate Edmundo González as Winner

The United States recognized Edmundo González as the winner of Venezuela’s disputed presidential election, despite claims of victory by President Nicolás Maduro. Secretary of State Antony J. Blinken cited “overwhelming evidence” supporting González’s win. González’s campaign has said it has the receipts from 81% of voting machines indicating a decisive victory. Maduro’s government-controlled election authority initially claimed Maduro won with 51% of the vote, while the opposition reported González winning with 67%. The announcement by the US marks a significant international stance against Maduro’s authoritarian rule, which has faced ongoing protests and has resorted to violent crackdowns by security forces and proxy groups like the Colectivos to quell ever-increasing dissent.

Tensions between Iran and Israel Escalate After Successful Assassination of Hamas Leader in Tehran

The apparent Israeli assassination of Hamas’s political leader Ismael Haniyeh in Tehran has heightened fears of a broader conflict in the Middle East and stalled ceasefire negotiations for the conflict in Gaza. This killing, alongside an Israeli strike on a Hezbollah leader in Lebanon, occurred just days after Israeli Prime Minister Benjamin Netanyahu’s visit to Washington, where he faced pressure to negotiate a ceasefire deal. Israel has not claimed responsibility for Haniyeh’s death, but Iran has blamed Israel for the predawn airstrike on Wednesday and vowed retaliation. The US denied involvement and reiterated its desire for a ceasefire, the release of hostages, and addressing Gaza’s humanitarian crisis.

Complex Prisoner Swap with Russia Sees Imprisoned Americans Returned Home

On August 1st a major prisoner exchange took place in Ankara, Turkey, involving officials from the US, Russia, Germany, and other countries, resulting in the release of at least 24 people. Among those freed were American journalist Evan Gershkovich, dissident Vladimir Kara-Murza, and former US Marine Paul Whelan, while Russia received Vadim Krasikov, a convicted assassin, and other criminals. This swap, described as the largest and most complex since the Cold War, marked a significant diplomatic achievement for President Joe Biden, who praised the cooperation among allies. Despite the successful exchange, concerns remain about the precedent it sets for negotiating with authoritarian regimes that detain individuals for leverage.

US Social & Political Developments

Biden Calls for Constitutional Reform and Judicial Accountability

On July 29th, President Biden called for a constitutional amendment to overturn the Supreme Court’s decision granting former presidents immunity for crimes committed while in office. Speaking at the Lyndon B. Johnson Presidential Library in Austin, Texas, he also proposed reforms including an 18-year term limit for justices and a mandatory ethics code. Biden criticized the court’s recent rulings, such as limiting voting rights protections and overturning Roe v. Wade, citing the July decision in Trump v. US as particularly alarming. While his proposals face significant challenges, including Republican opposition, they reflect growing frustrations with the court among Democrats and progressives.

US Announces $500 Million in New Military Aid to the Philippines

On July 30, 2024, the US announced a $500 million investment to support the Philippine defense modernization, aimed partly at countering China’s maritime actions in the South China Sea. This announcement was made during the fourth two-plus-two talks between US and Philippine defense and foreign ministers, held in the Philippines for the first time. The investment is described as a “once in a generation” initiative and will fund the Philippine Armed Forces modernization program, enhancing external defense capabilities. Additional support of over $128 million will be directed towards shared military installation sites under the Enhanced Defense Cooperation Agreement (EDCA) from 2014, focusing on humanitarian assistance and joint cooperation.

Corporate/Sector News

Uber Announces Partnership with Chinese Carmaker BYD

Uber Technologies Inc. and BYD Co. announced on July 31, 2024, a partnership to deploy 100,000 electric vehicles (EVs) on Uber’s platform, starting in Europe and Latin America. The collaboration aims to lower EV ownership costs and increase EV adoption by providing drivers with lower vehicle pricing and financing options. The initiative excludes the US due to high tariffs on Chinese EVs, with President Biden increasing tariffs to 102.5% this year. The deal supports Uber’s goal of transitioning to a fully electric fleet by 2030 and helps BYD expand its presence outside China.

Wind and Solar Generated More Power than Fossil Fuels in EU for the First Half of the Year

In the first half of 2024, wind and solar energy generated more electricity in the European Union (EU) than fossil fuels for the first time, reaching 30% of total electricity production compared to fossil fuels’ 27%. Thirteen EU member states, including Germany, Spain, and Denmark, now produce more electricity from wind and solar than from fossil fuels. The shift has been driven by strong policy support and record-breaking additions to renewable capacity in 2023, reducing the EU’s power sector emissions by 31% compared to 2022. Despite these gains, further policy focus is needed to improve grid connections, energy storage, and permitting processes to sustain and expand wind and solar integration.

Minnesota Becomes Second US State with Flying-Car Regulations Following New Hampshire

Minnesota has become the second US state to enact flying car regulations, following New Hampshire’s legislation in 2020. The “Jetsons Law” allows private citizens to own “roadable aircraft,” enabling vehicles to function as both cars and airplanes, with registration using their tail numbers instead of traditional license plates. These vehicles must take off and land from designated airfields and comply with FAA regulations while airborne. Industry leaders like Jim Dukhovny of Alef Aeronautics and Doron Merdinger of Doroni Aerospace support these regulations, highlighting the economic and environmental benefits of flying cars.

Recommended Reads

US Jobs Report July 2024: Live News on Employment, Payrolls

Venezuelan Political Leaders Call for Rallies Over Contested Election Results

How China, Russia, and Others Have Weaponized Corruption

Why Is It So Hard for China to Boost Domestic Demand?

The U.S. National Debt Dilemma | Council on Foreign Relations

This week from BlackSummit

The Great Green Flood

The BlackSummit Team

Geopolitics & the Day After

The BlackSummit Team

Image of the Week

Video of the Week

Unemployment Rises to 4.3% as Hiring Slows, Missing Expectations

Source: Wall Street Journal