Market Action

• A devastating week for the markets has left investors searching for answers. More worries about China and the implications for global growth have been blamed, as have concerns about earnings growth for some key American firms. Investors worry that a correction is under way.
• China reported its worst PMI data since 2009 late on Thursday, sending futures markets south. Commentary has rapidly switched from a correction in China’s equities markets to the more fundamental issue of economic growth. Shanghai fell more than 10% this week alone in spite of more support from the PBOC.
• Despite the carnage in the general markets housing data continues to be positive. Homebuilders’ confidence was the highest in a decade and new home sales also came in strong.
• New data from the government concerning crude storage sent oil lower this week. Supply levels continue to remain strong despite the commodity’s fall.
• Japan reported -1.6% GDP growth for Q2. While the contraction was expected indicators suggesting weak consumer demand and wages does not bode well for PM Abe.
• Amidst the market turmoil gold had its best week in months. Poor inflation expectations globally and a strong dollar had pushed gold down to its lowest point since the crisis.
• Greek PM Tsipras announced his resignation on Thursday. The move will result in new elections in September where his Syriza party is expected to perform well. The troika also released funds from the new bailout agreement this week, allowing Greece to make a payment due to the ECB.
• Inflation data in the US came in quite weak, with core CPI rising just 0.1%. Fed Futures markets now forecast a 24% chance of a rate hike in September.

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