Market growth amid optimistic inflation data, company and stock exchange news

Market Reviews

• The stock market reacted with strong growth to strong macroeconomic data from the US = good is good again. Asia and futures are also doing well. Global investors rejoice when the US economy is strong. After all, it means there will be someone to buy products from foreign companies.

• Recession alarms have faded and investors appear convinced the Federal Reserve is no longer behind the curve in cutting rates. According to CME's FedWatch tool, market quotes now indicate there is just a 25% chance the Fed will cut rates by 50 basis points next month, up from a 55% chance a week ago, after the July US inflation report slashed rates to an excessively large-scale reduction.

• In Asia, Japan's Nikkei outperformed the market, rising 3% on Friday, putting it on track for its best week since April 2020 as it tries to reclaim its all-time high. Meanwhile, the yen has fallen nearly 5% from last week's seven-month peak and was last hovering around 149 per dollar. Even as it begins to look cheap again, the currency's volatility is causing global investors to rethink the viability of yen-funded deals.

 • Share futures on Friday point to a stronger open in Europe and the US, with UK retail sales data due just as London wakes up.

• It remains likely that the Bank of England will cut interest rates at least once more this year as inflation pressures subside and the UK economic outlook for the remainder of 2024 becomes less rosy.

• Reserve Bank of Australia Governor Michelle Bullock said on Friday it was too early to think about cutting rates, adding that core inflation was too high and the board remained focused on potential risks from rising prices. Her remarks come after fellow antipodean Reserve Bank of New Zealand earlier this week cut interest rates for the first time in four years.

 • Nike shares began to rise in price after attracting $240 million in investment from billionaire Bill Ackman. Since the beginning of the year, Nike's capitalization has fallen by 28% to $118 billion, largely due to a weak report for the fourth fiscal quarter.

• Shoppers are flocking to Walmart, increasing its profits and sales. The largest U.S. retailer posted strong sales and stronger profits in the latest quarter, and its executives said they saw no signs of demand fading. WMT shares rose 6.6%.

• JD-com's profit nearly doubled with revenue growth. Chinese e-commerce giant JD.com's second-quarter net profit rose 92% as revenue rose slightly amid stiff competition from Alibaba Group and PDD Holdings.

• Alibaba's business is shrinking amid consumer malaise. Alibaba Group Holding Ltd. posted anemic revenue growth of 4% after its China trade business contracted for the first time in at least a year, reflecting the malaise that has hit the world's No. 2 economy and its leading online retailer.

• Investment companies of Soros and Druckenmiller sold their stakes in the shares of the world's largest technology companies. Druckenmiller expressed doubts about the sustainability of the artificial intelligence boom in an interview with CNBC in May.

• Crypto Democrats rally behind Harris campaign, pushing for policy overhaul - Reuters. Billionaire Mark Cuban, Wall Street financier Anthony Scaramucci and Congressman Adam Schiff were among a group of cryptocurrency advocates who called on Kamala Harris to reset Democratic Party digital asset policies ahead of the November election.

• Hedge fund Viking is betting on GE's clean energy spinoff. When General Electric spun off its GE unit to Vernova, Viking Global Investors traded its entire stake in GE for shares in the new publicly traded clean energy business.

• Bayer Monsanto wins appeal in Roundup cancer lawsuit. The company said the decision in Schaffner v. Monsanto creates a rift among federal appeals courts, necessitating a review of the case by the U.S. Supreme Court.
Bayer added that it stands by Roundup products and says they are not carcinogenic.

• Paramount (PARA) shares jumped 7%. After reporting a new offer for the parent company.

• Deere (DE) shares rose 6% after the report. The company reported well and confirmed its forecasts.

Key events that could impact markets on Friday:
- UK Retail Sales (July).
- The University of Michigan releases its consumer sentiment survey for August. The expected figure is 67.5, which is about one point higher than the previous one. In July, consumer expectations for inflation for the next year were 2.9%, near a three-and-a-half-year low.
- The Census Bureau reports new housing data for July. Consensus suggests a seasonally adjusted annual figure of 1.35 million private residences, roughly in line with June data.
- Chicago Fed President Austan Goolsbee will participate in a fireside chat ahead of the Los Angeles Investor Summit in the third quarter and awards ceremony.
- Today is also the expiration of monthly options.

International reviews

• US retail sales rose 1% m/m.
Much higher than expected (+0.4%).
The NY Fed Empire State Manufacturing Activity Index improved from -6.6 to -4.7.

• The US labor market remains strong.
The number of initial applications for unemployment benefits fell from 233 thousand to 227 thousand, although an increase to 236 thousand was expected.

• Recent economic data eases concerns about a recession in the US. Thursday's retail sales report comes as markets increasingly focus on economic data amid growing concerns about the health of the U.S. economy.

• US industrial production fell in July by the most since the beginning of the year. Industrial production fell by 0.6% in July, slightly worse than expected (-0.3%). Amid a decline in refinery production, which included a Hurricane Beryl-related decline in refinery activity along the Gulf Coast.

• US business inventories rose slightly in June - Reuters. Because the sharp increase in inventories at retailers was offset by a slight increase in inventories at wholesalers. Inventories rose 0.3% after rising 0.5% in May, the Commerce Department's Census Bureau reported Thursday.

• UK GDP grew 0.9% in Q2, as expected.

• Slowing inflation creates problems for Trump's economic attacks. As he tries to counter Kamala Harris' surge in popular votes...

• The world's largest steelmaker warns of a "severe" crisis in the industry. Baowu Steel is worried about an industrial crisis in China that could spread throughout the world.

• Hungarian low-cost airline Wizz Air launches an All you can fly pass for an unlimited number of flights on the company's flights on all routes throughout the year. The prepaid pass, which allows passengers to book one-way, round-trip flights throughout the year, costs €499. And from Friday, August 16, its price will increase to 599 euros.

• The risk of recession in the German economy has increased to 50%. The increased risk of recession is due to the deterioration of the situation in the financial market and investor sentiment, the Institute of Macroeconomics and Market Research (IMK) said. According to these data, the situation is particularly affected by the high number of corporate bankruptcies, as well as low values ​​of industry purchasing managers' indices (PMI) during all over the world.