• Wall Street settled mixed on July 25, with the DJIA edged up by +0.20%, the S&P 500 slipped by -0.51% and the Nasdaq fell by -0.93%.
• US stocks extended losses on Thursday as chipmakers underperformed and negative earnings news weighed on sentiment. Investors remained cautious about the economic outlook despite upbeat data, while a minor dip in Treasury yields provided a modest offset.
• The 10-yr UST yields fell by -1.0 bps to 4.27%, with the 2-yr yields rose by +3.0 bps to 4.41%. T-note prices were weighed down by Thursday’s bearish US economic reports and additional supply pressure from the Treasury’s USD44 billion 7-year T-note auction.
• US economic growth exceeded forecasts in Q2, with GDP rising at a +2.8% annualized rate, up from +1.4% in the previous quarter. This shows demand remains resilient despite higher borrowing costs. The report showed positive inflation trends with the core PCE price index fell to +2.9% from +3.7% in Q1.
• US weekly initial unemployment claims decreased by 8,000 to 235,000, indicating a stronger labor market than the expected 238,000. Weekly continuing claims also fell by 16,000 to 1.851 million, better than the anticipated 1.868 million.
• In Europe, the Ifo Business Climate indicator for Germany decreased to 87 in July 2024, the lowest since February and down from 88.6 in June and below the expected 88.9. The decrease was broad-based across manufacturing, services, trade, and construction.
• In Asia, the People’s Bank of China unexpectedly lowered its one-year medium-term lending facility (MLF) rate by -20 bps to 2.3% on July 26th, marking the first cut in nearly a year and the biggest since April 2020.
• Global bond yields moved lower on Thursday: the 10-yr German bund yield declined by -2.6 bps to 2.41%, the 10-yr UK gilt yield slid by -2.6 bps to 4.13%, and the Japanese 10-yr JGB yield closed down by -2.2 bps to 1.06%.
