• Wall Street closed lower on July 24, with the DJIA fell by -1.25%, the S&P 500 dipped by -2.31% and the Nasdaq plunged by -3.64%.
• US Stocks declined sharply on Wednesday following underwhelming earnings from Tesla and Alphabet and limited AI updates. Investors will continue to watch tech stocks closely with key earnings reports coming up next week. Meanwhile, S&P 500 Q2 earnings are projected to grow +9% YoY. About 25% of companies have reported, with the majority surpassing earnings forecasts (Bloomberg).
• The 10-yr UST yields surged by +3.0 bps to 4.28%, with the 2-yr yields slipped by -3.0 bps to 4.37%. T-note prices initially rose on weak economic data and stock market declines. However, a proposed rate cut by former NY Fed President Dudley sparked inflation worries, reversing gains and steepening the yield curve.
• The preliminary July S&P US Manufacturing PMI decreased to 49.5, weaker than the anticipated 51.6 and falling under 50.0 for the first time since December last year. Conversely, the preliminary S&P US Services PMI rose to 56.0, better than the forecasted decline to 54.9.
• In Europe, The GfK Consumer Climate Indicator for Germany increased to -18.4 in August 2024, up from a revised -21.6 in the previous period, exceeding market forecasts of -21.0 and marking the highest reading since April 2022, thanks to easing cost pressures and rising wages.
• In Asia, the preliminary au Jibun Bank Japan Manufacturing PMI for July 2024 dropped to 49.2, falling short of the expected 50.5 and indicating the first contraction in factory activity since April 2024. This unexpected decline points to reduced business confidence, despite it still being positive.
• Global bond yields moved higher on Wednesday: the 10-yr German bund yield rose by +0.5 bps to 2.44%, the 10-yr UK gilt yield grew by +3.2 bps to 4.16%, and the Japanese 10-yr JGB yield closed up by +1.6 bps to 1.08%.
