Written by Jimmy McGiv
Orlando, Florida (Reuters) -Today
Understand the forces that lead global markets
Written by Jimmy McGiv, a column writer on the market
The high prices of producers in the United States removed the winds from the sails of stock markets on Thursday and pushed investors to reassess their point of view that the reduction of the interest rate next month was almost certain.
More on that below. In today’s pillars, I see five plans showing that the foundations on the American economy Wall Street may be more fragile if you strip the technology -related spending.
If you have more time to read, here are some of the articles I recommend to help you understand what happened in the market today.
1. Trump’s risks create a false calm: Mikedan 2. Falcons that are celebrated and doves: What they reduce central bankers in the United States 3. Trump Debang’s order can create a headache, as sources 4 say. Trump says Putin ready to make a deal on Ukraine, and leads to the inclusion of Zelenskiy.
Main market movements today
* Stocks: Russell 2000 decreases by 1.3 %, but S&P 500, NASDAQ and Dow are mainly ended. In fact, the S&P 500 runs its closure. * Arrows/sectors: seven sectors in the S&P 500 Fall, LEDBY IndustRies and materials, off about 0.9 %. Fashion retail drowning 15 % on the tariff, profit warning. * FX: A dollar counterattack in dollars about 0.5 % for its best day in twoweks. The largest G10 FX is the New Zealand dollar, a decrease of 1 %. * Bonds: Treasury revenue rises as much as up to 5 amputations. Curvesbary moves, but 2s/30s is still close to the most severe levels of three years around 115 Bermas. * Commodities: The increase in oil is about 2 %, the largest increase in weeks.
Talking points today:
Federal Reserve expectations. Traders reduced the possibility of a quarter -point rate to be reduced next month to 90 % of 100 % after the release of inflation data in producers in July. The basic annual product price index increased by 3.7 %, which is the highest in three years. With the exception of epidemic distortions, the jump was of 2.6 % in June was the largest since the first similar data collection in 2011.
The talk about the 50 Basis Point next month, fueled by Treasury Secretary Scott Besent on Wednesday. PPI data spared it, but Bessent also returned to Thursday. Two other couples of inflation and solid employment, and can it be completely removed from the table of the table?
* European GDP. The first estimate of the Q2 growth in the UK was released on Thursday and with a large scale, the expansion of 0.3 % was better than expected – or not as bad as it was afraid, depending on your point of view. In fact, Britain’s economy grew nearly the US economy in the first half of the year.
Euro Zone GDP was less successful, as it was sliding in industrial production in June and falling down to May, determining the growth of gross domestic product in April to June by only 0.1 %. This is a clear slowdown in the expansion of 0.6 % in the first quarter.
Of course, the elephant in the room is the effect of customs tariffs, which has not yet been felt, indicating that the second half of the year is likely to be more than the first.
* Do you want to hold a deal? Donald Trump and Vladimir Putin meet in Alaska on Friday, where US President his Russian counterpart, is keen to “hold a deal” on Ukraine. The goal of Friday’s talks is to hold a second meeting, including Ukraine, and may agree to the ceasefire framework.
Despite his harsh accent towards Putin in the past months, Trump has a long history of trying to put the Russian leader. The Trump administration sought to reduce expectations, and White House press secretary Caroline Levit told reporters on Tuesday that the meeting would be a “listening exercise.”
Perhaps this is not what Ukrainian President Folodimir Zellinki wants to hear.
The main spots of the American economy in five plans
It seems that the American economy is somewhat smoothly wandering, if it is very largely due to some observers. Under the hood, however, the image is more anxious, and the risk of the motor malfunction rises.
The role of technology in the American economy was not greater than ever, and artificial intelligence could provide a historical production boom. But the return on the huge investment that is made on this bet may take years to achieve it. Moreover, the non -balanced economy may not be desirable in the long run, as it can lead to weak investment and politics decisions.
Here are five plans indicating the foundations of the flexible American economy and the prosperous stock market may be more fragile than it appears, especially if spending, investment and optimism related to technology are stripped.
investment
Loudtek, the chief American economist at SMBC Nikko Securities, notes that the modified investment that has been adjusted in the “Amnesty International” is sensitive to the economy since the end of 2019 has increased by 53 %, and Troy Loudtek, the chief American economist at SMBC Nikko Securities. The investment increased elsewhere only 0.3 %.
Contribute to gross domestic product
Regarding, the contribution of equipment and information technology software to the US GDP has not been higher than ever, according to Blackrock analysts. However, the total Capex decreased in all other areas of the economy in the first half of this year – which is rare.
Consumer spending
Meanwhile, personal consumption expenses slowly slow down, a worrying sign that the consumer represents about 70 % of the US gross domestic product. Personal consumption expenses in the second quarter have grown only by 0.9 %, which are the slower pace since the epidemic. In a real way, consumers were completely spent in the first half of the year.
Corporate bankruptcy
Corporate bankruptcy cases in July were the highest month since July 2020, according to S& P Global Market. More concern, the outcome of bankruptcy files from year to date to the end of July was the highest in the seven -month period since 2010. Nearly a third of bankruptcy this year was in the consumer estimated and industrial sectors.
Stock market concentration
Finally, the focus was discussed on Wall Street on a large scale, but levels still calm the eye. One of the stocks, the Chipmaker Nvidia maker, represents 8 % of the maximum S&P normative market. This record for one name.
The 10 best shares, most of which are from major technology, are 40 % of the maximum index market and 30 % of all profits. These are also standard levels.
The more the number of Wall Street markets – and even global markets – on revenues, profits and profit by a group of companies that can be considered in my hands, may be more possible chaos if you lose trends that drive these companies to momentum.
What can the markets move tomorrow?
* China “discharge data” including investment, retail sales, industrial production, home prices, unemployment (July) * Japan GDP (Q2) * Taiwan GDP (Q2, Review) * Hong Kong GDP (Q2, final) US retail sales (July) US industrial production (July). Trump and Russian President Vladimirutin in Ancorag, Alaska.
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The views expressed are the views of the author. It does not reflect the opinions of Reuters news, which, according to the principles of confidence, is committed to integrity, independence and liberation from bias.
(Written by Jimmy McGiv; Edit Nia Williams)
