Global Market News

Global Equities Make Gains

Global equities made significant gains this week amid receding recession fears. The Dow Jones and S&P 500 gained 2.94% and 3.93% on the week, respectively, while the Nasdaq climbed 5.29%. The US 10-year Treasury note eased to 3.88%, and the price of a barrel of West Texas Intermediate crude oil remained steady, ending the week at $76.77. Volatility, as measured by the CBOE Volatility Index, decreased dramatically over the week, closing Friday at 14.8.

US Economic Data Revive Hopes of Soft Landing

This week’s inflation, retail, and jobs data revived hopes that a soft landing can still be achieved. In the first reading below 3% since 2021, US consumer prices rose 0.2% month over month and 2.9% year over year. A strong 1% month-over-month reading for July retail sales reassured investors that last month’s employment data may have been a one-off event instead of a sign of impending recession. Also, Thursday’s mild initial jobless claims showed a fall from a peak of 250,000 in July to 227,000. The odds of a 50 basis point cut at the Federal Reserve’s September meeting have declined substantially but investors still expect 3-4 quarter-point cuts before the end of the year.

Updated Market Figures

International Developments

Monkeypox Declared Global Health Emergency

Recently, Pakistan and Sweden reported their first cases of Mpox, marking a significant development as these are the first infections outside Africa involving a new, more dangerous strain of the virus. The World Health Organization (WHO) has declared the spread of Mpox a global health emergency due to the rapid increase in cases and fatalities, particularly in the Democratic Republic of the Congo (DRC). This declaration aims to mobilize international resources and attention to combat the outbreak effectively. The new variant, known as Clade 1, is more easily transmissible and has been linked to a deadly surge in the DRC.

Thailand Gets Youngest-Ever PM

Thailand has elected its youngest-ever prime minister, Paetongtarn Shinawatra, at 37 years old. She is the daughter of former Prime Minister Thaksin Shinawatra and a prominent member of the influential Shinawatra political dynasty. Paetongtarn leads the Pheu Thai Party, which has formed a new ruling coalition despite coming second in the 2023 elections against the now-banned reformist Move Forward Party. Her election follows the surprising dismissal of former Prime Minister Srettha Thavisin by a constitutional court. Meanwhile, the former Move Forward Party, now called the People’s Party, is expected to struggle to overcome the legal hurdles and the banning of its leaders from politics.

Ukraine Sets Up Military Office in Kursk Region

Ukraine has established a military administrative office in Russia’s Kursk region, marking a significant escalation in the ongoing conflict. This move follows Ukraine’s successful incursion into the region where they have taken control of the city of Sudzha and several other settlements. The office, led by Major General Eduard Moskalyov, aims to maintain law and order and address the immediate needs of the local population. This development signals Ukraine’s intent to solidify its presence in the area despite Russia’s efforts to reinforce its border defenses.

US Social & Political Developments

Wind Turbines Generate More Electricity than Coal for Two Months in a Row

In March and April 2024, wind turbines in the US generated more electricity than coal-fired plants for the first time in consecutive months. Wind installations produced 45.9 terawatt-hours (TWh) of electricity in March, surpassing the 38.4 TWh generated by coal. This trend continued in April, with wind generation reaching a record 47.7 TWh, while coal-fired generation fell to 37.2 TWh.

FBI Resumes Coordination with Big Tech to Fight Disinformation

The FBI has recently resumed its coordination with major tech platforms like Microsoft, Google, and Meta to combat foreign disinformation campaigns. This effort, which had been paused for over six months due to legal challenges and scrutiny from the House Judiciary Committee, aims to share intelligence about foreign propagandists using these platforms to mislead Americans. The FBI’s Foreign Influence Task Force is responsible for these briefings, which provide tech companies with information on covert influence operations. While the FBI does not mandate any specific actions, it allows these companies to decide how to handle the information independently.

Corporate/Sector News

Walmart Earnings Help Counter Recession Fears

Walmart’s latest earnings report has provided a boost of confidence amid recession concerns. The retail giant exceeded Wall Street’s expectations for both sales and profits in the second quarter of 2024, with revenue growing nearly 5%. This strong performance led Walmart to raise its full-year outlook, projecting sales growth between 3.75% and 4.75%. The company’s ability to attract consumers with its low prices, even as inflation remains a concern, has been a key factor in its success. Walmart’s positive results, coupled with robust retail sales data, have helped alleviate fears of an impending recession.

Starbucks Replaces CEO

Starbucks has announced a significant leadership change, replacing CEO Laxman Narasimhan with Brian Niccol, the former CEO of Chipotle Mexican Grill. This decision comes amid declining sales in key markets like the US and China, which has pressured the company to seek new leadership. Niccol, known for his successful tenure at Chipotle, will officially take over on September 9th. The announcement has already had a positive impact on Starbucks’ stock, which surged over 21% following the news. This move is seen as a strategic effort to revitalize the brand and address ongoing challenges in the competitive coffee market.

FTC Cracks Down on Fake Reviews

The Federal Trade Commission (FTC) has introduced a new rule to combat the growing issue of fake reviews and deceptive marketing practices. This rule explicitly bans the creation, sale, and use of fake reviews, including those generated by artificial intelligence. It also targets businesses that attempt to manipulate consumer perceptions by buying fake followers or purging negative reviews. Violators of this rule face significant penalties, with fines exceeding $50,000 per infraction. The FTC claims that this initiative will protect consumers from misleading information and ensure a fair marketplace for honest businesses.

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Explained: How Ukraine Pulled Off Its Invasion of Russia: https://www.wsj.com/video/series/news-explainers/explained-how-ukraine-pulled-off-its-invasion-of-russia/EA228D7D-7890-4CDE-8207-E91C1735F018?st=5chhumqfieh5esb&reflink=article_whatsapp_share