Daily global market review

The market concluded the initial complete week of August on a mixed tone during a session marked by light trading activity. The market experienced fluctuations in response to the July Producer Price Index (PPI) report, which exceeded expectations and led to an uptick in market rates. This development provided investors with a rationale to continue their ongoing consolidation efforts, a trend initiated earlier this month subsequent to the strong performance witnessed at the beginning of the year.

The total PPI for July exhibited a 0.3% increase in a month-over-month comparison (compared to the Briefing.com consensus of +0.2%), following a revised downward figure of 0.0% (originally 0.1%) for June. When excluding food and energy components, the index for final demand also demonstrated a 0.3% rise on a month-over-month basis (compared to the Briefing.com consensus of +0.2%). This follows a revised downward 0.1% decline (originally +0.1%) noted for June.

In a year-over-year context, the index for final demand escalated by 0.8% in comparison to June's 0.3%. Furthermore, the index for final demand excluding food and energy displayed an unchanged 2.4% increase from June.

Ahead of the release, the 2-year note yield, which stood at 4.80%, surged by six basis points to reach 4.89%, while the 10-year note yield, previously at 4.08%, experienced a nine basis point climb to hit 4.17%.

The performance of large-cap stocks had a dampening effect on the major indices, resulting in losses for the S&P 500 and Nasdaq, whereas the Dow Jones Industrial Average managed to secure gains. Specifically, the Vanguard Mega Cap Growth ETF (MGK) saw a decline of 0.6%, while the Invesco S&P 500 Equal Weight ETF (RSP) closed with no change.

Apple (APPL 177.79, +0.06, +0.03%) barely achieved a slight increase, yet weakness from other prominent companies such as Tesla (TSLA 242.65, -2.69, -1.1%), Meta Platforms (META 301.70, -4.04, -1.3%), and NVIDIA (NVDA 408.55, -15.33, -3.6%) hindered broader market progress.

The day saw the S&P 500 recording a marginal decrease of 0.1%, the Nasdaq Composite falling by 0.7%, and the Dow Jones Industrial Average marking a 0.3% rise. The breadth of market movement indicated mixed dynamics below the surface. At the NYSE, advancers slightly outnumbered decliners, while at the Nasdaq, decliners held a 4-to-3 edge over advancers.

Among the 11 S&P 500 sectors, only four ended with losses. Notably, information technology (-0.9%) registered the most significant decline, whereas energy (+1.6%) emerged as the leading performer.

In a review of the day's economic data, the July PPI displayed a 0.3% increase (compared to Briefing.com consensus of 0.2%), with the prior figure revised downward from 0.1% to 0.0%. Similarly, the July Core PPI showed a 0.3% increase (compared to consensus of 0.2%), following a revised downward -0.1% (originally 0.1%) for June.

The key takeaway from this report is that wholesale inflation has notably decreased from its peak in 2022. However, given the recent surge in oil and gasoline prices, concerns may arise regarding potential delays in further improvement.

Additionally, the preliminary August University of Michigan Consumer Sentiment came in at 71.2 (compared to Briefing.com consensus of 70.9), slightly lower than the prior figure of 71.6. Notably, this report highlighted a minimal shift in overall sentiment, partly attributed to relatively stable inflation expectations. Both year-ahead and five-year expectations for inflation dropped by ten basis points each.

The 10-year Treasury Note fell by 26/32, resulting in a yield of 4.17%. On the New York Stock Exchange (NYSE), there were 1452 advancing stocks and 1360 declining stocks, with a trading volume of 751 million. Similarly, the Nasdaq reported 1899 advancing stocks and 2437 declining stocks, accompanied by a trading volume of 4.6 billion.

In terms of industry trends, the Energy, Utilities, Health Care, and Financials sectors demonstrated strength, while the Consumer Discretionary, Information Technology, Communication Services, and Materials sectors showed weakness.

Several factors influenced market movements. Firstly, there was a surge in Treasury yields as a response to the unexpectedly high July Producer Price Index (PPI) report. This increase in yields prompted the continuation of consolidation efforts initiated due to the yield surge. Moreover, the performance of mega-cap stocks was lackluster, exerting downward pressure on overall index performance. Lastly, the trading activity on this mid-August Friday was subdued, leading to limited participation in the market.

In the United States, the Dow stands at 35,281.40, experiencing a positive change of 105.25 and a 0.30% increase. Likewise, the S&P 500 in the United States holds a value of 4,464.05, reflecting a decrease of -4.78 and a 0.11% drop. Similarly, the NASDAQ in the United States is positioned at 13,644.85, indicating a decrease of -93.14 and a 0.68% decline. The VIX in the United States is recorded at 14.84, showcasing a decrease of -1.01 and a notable 6.37% drop. Shifting focus to the Russell 2000 in the United States, it holds a value of 1,925.11, signifying an increase of 2.49 and a 0.13% rise.

Transitioning to the Canadian market, the S&P/TSX Composite stands at 20,407.57, reflecting an increase of 64.69 and a 0.32% rise. In Canada, the S&P/TSX 60 is recorded at 1,223.54, demonstrating an increase of 3.18 and a 0.26% rise. In Brazil, the BOVESPA is positioned at 118,065.14, showcasing a decrease of -284.46 and a 0.24% drop. Moving on to Chile, the S&P IPSA is at 6,257.44, with a decrease of -32.90 and a 0.52% drop. In Mexico, the S&P/BMV IPC stands at 53,242.16, reflecting a decrease of -646.87 and a notable 1.20% drop.

Shifting to the European markets, the STOXX Europe 50 is positioned at 3,973.51, indicating a decrease of -40.32 and a 1.00% drop. Similarly, the STOXX Europe 600 stands at 459.17, reflecting a decrease of -5.06 and a 1.09% drop. In the United Kingdom, the FTSE 100 holds a value of 7,524.16, showcasing a decrease of -94.44 and a 1.24% drop. In Italy, the FTSE MIB stands at 28,274.74, indicating a decrease of -300.31 and a 1.05% drop. Similarly, in France, the CAC 40 is recorded at 7,340.19, reflecting a decrease of -93.43 and a 1.26% drop.

Shifting to Asian markets, the Nikkei 225 in Japan stands at 32,473.65, indicating an increase of 269.32 and a 0.84% rise. In Hong Kong, the Hang Seng is positioned at 19,075.19, showcasing a decrease of -173.07 and a 0.90% drop. In China, the Shanghai Composite stands at 3,189.25, reflecting a decrease of -65.31 and a notable 2.01% drop. Moving on to Australia, the S&P/ASX 200 is at 7,340.10, demonstrating a decrease of -17.30 and a 0.24% drop. In South Korea, the KOSPI stands at 2,591.26, reflecting a decrease of -10.30 and a 0.40% drop. In Taiwan, the Taiwan SE holds a value of 16,601.25, showcasing a decrease of -33.45 and a 0.20% drop.

The provided data presents a compilation of various stock indices in India, along with their respective values during the last recorded trading session. Among these, the BSE MidCap index recorded a last value of 30,429.56, reaching a high of 30,588.69 and a low of 30,388.56. This resulted in a decrease of -0.13% or -39.78 points. Similarly, the BSE Sensex index displayed a last value of 65,322.65, with its high at 65,727.80 and low at 65,274.61, reflecting a decline of -0.56% or -365.53 points. Another index, BSE SmallCap, showed a last value of 35,290.61, a high of 35,526.76, and a low of 35,246.58, indicating a -0.31% decrease or -108.13 points. Additionally, the NIFTY Midcap 100 index stood at 37,836.15, reaching a high of 38,148.50 and a low of 37,791.20, signifying a decrease of -0.45% or -171.45 points. The NIFTY Smallcap 100 index, on the other hand, showed a last value of 11,748.35, a high of 11,836.35, and a low of 11,734.55, resulting in a decrease of -0.18% or -21.60 points.

• Tesla, Inc. (TSLA) saw its price decrease by 2.69 to reach 242.65, reflecting a change of 1.10%. The trading volume for TSLA was 99 million, and its 52-week range spans from 101.81 to 314.67.
• Ford Motor Company (F) experienced a minor drop in price of 0.02, resulting in a value of 12.14. This change corresponds to a 0.16% shift. The trading volume for F stood at 64 million, while its 52-week range lies between 10.90 and 16.68.
• Palantir Technologies Inc. Class A (PLTR) maintained a steady price at 15.41, with no change recorded, thus indicating a 0.00% shift. The trading volume for PLTR amounted to 57 million, and its 52-week range extends from 5.92 to 20.24.
• AMC Entertainment Holdings, Inc. Class A (AMC) witnessed an increase in price by 0.28, elevating it to 5.26. This surge corresponds to a change of 5.62%. The trading volume for AMC was 56 million, and its 52-week range is 3.77 to 16.71.
• Advanced Micro Devices, Inc. (AMD) observed a price drop of 2.66, settling at 107.57, which signifies a change of 2.41%. The trading volume for AMD stood at 56 million, and its 52-week range spans from 54.57 to 132.83.
• NIO Inc. Sponsored ADR Class A (NIO) experienced a price decrease of 0.35, resulting in a value of 12.90, indicating a change of 2.64%. The trading volume for NIO was 55 million, and its 52-week range is 7.00 to 22.74.
• NVIDIA Corporation (NVDA) saw its price decline significantly by 15.33, reaching 408.55. This substantial decrease corresponds to a change of 3.62%. The trading volume for NVDA amounted to 53 million, and its 52-week range extends from 108.13 to 480.88.
• Apple Inc. (AAPL) managed a slight gain in price of 0.06, resulting in a value of 177.79, indicating a change of 0.03%. The trading volume for AAPL stood at 52 million, and its 52-week range spans from 124.17 to 198.23.
• IonQ, Inc. (IONQ) marked a notable price increase of 1.52, elevating it to 15.71, reflecting a change of 10.71%. The trading volume for IONQ was 51 million, and its 52-week range extends from 3.04 to 20.14.
• Banco Bradesco S.A. Sponsored ADR Pfd (BBD) experienced a price drop of 0.04, reaching 3.10, reflecting a change of 1.27%. The trading volume for BBD amounted to 50 million, and its 52-week range spans from 2.34 to 4.16.

In the realm of cryptocurrencies, we observe the following data regarding their prices, changes, and percentage changes. The Nasdaq Crypto Index currently stands at 1,702.58, displaying a decrease of -3.69 and a 0.22% change. Similarly, Bitcoin is valued at 29,395.00, indicating a decrease of -28.00 and a 0.10% change. Ether holds a value of 1,844.40, showcasing a decrease of -6.80 and a 0.37% change. In contrast, Litecoin stands at 83.26, revealing a slight increase of 0.25 and a 0.30% change. Lastly, XRP is positioned at 0.63, reflecting a negligible decrease of 0.39%.

Turning our attention to bonds and rates, we examine the yields and yield changes for various treasury periods. The 3 Month Treasury yields at 5.270%, with a change of -0.010. The 2 Year Treasury presents a yield of 4.888%, displaying an increase of 0.030. For the 5 Year Treasury, the yield is 4.301%, indicating an increase of 0.080. Similarly, the 10 Year Treasury offers a yield of 4.152%, reflecting an increase of 0.050. Lastly, the 30 Year Treasury holds a yield of 4.260%, showcasing a slight decrease of -0.003.

Shifting to currency rates, we analyze their values and changes. The Euro / US Dollar exchange rate is at 1.0965, reflecting a negligible decrease of 0.16%. Conversely, the British Pound / US Dollar rate stands at 1.2694, indicating a slight increase of 0.14%. The US Dollar / Canadian Dollar rate is 1.3441, showing a negligible decrease 0.05%. Similarly, the US Dollar / Swiss Franc rate is 0.8769, displaying a slight increase of 0.05%. Lastly, the US Dollar / Japanese Yen rate stands at 144.9050, revealing a modest increase of 0.13%.

The Bloomberg Commodity index experienced a decrease of 0.61 points, equivalent to a decline of 0.26%, settling at 237.38. Throughout its course, this index attained its peak at 238.32 and reached its lowest point at 236.91. Similarly, the UBS Bloomberg CMCI index exhibited a decline of 5.07 points, indicating a decrease of 0.33%, and stood at 1,534.69. The highest point it reached was 1,543.14, while the lowest was 1,534.69. Transitioning to the Reuters/Jefferies CRB index, it displayed a decline of 0.21 points, reflecting a dip of 0.07%, and ended up at 313.01. Notably, its range spanned from 313.22 to 313.01. Additionally, the Rogers International index observed a decrease of 4.89 points or 0.13%, settling at 3,811.33. This index's zenith was at 3,828.03, and its nadir at 3,795.35. Lastly, the S&P GSCI index experienced a reduction of 2.58 points or 0.07%, revealing a value of 3,585.99. Its range encompassed 3,607.65 to 3,573.04.

In the energy sector, several commodities have demonstrated shifts in their values. WTI Crude Oil (Nymex) stands at 83.19 USD/bbl., reflecting a positive change of 0.37 or a 0.45% increase, linked to the September 2023 contract. Brent Crude (ICE) has reached 86.81 USD/bbl., with an increase of 0.41 or a 0.47% rise, tied to the October 2023 contract. RBOB Gasoline (Nymex) is valued at 296.49 USd/gal., displaying a notable rise of 6.02 or a 2.07% increase, corresponding to the September 2023 contract. Natural Gas (Nymex) holds a value of 2.77 USD/MMBtu, indicating a slight positive shift of 0.01 or a 0.25% increase, connected to the September 2023 contract. Conversely, Heating Oil (Nymex) has experienced a decrease, settling at 312.15 USd/gal., reflecting a change of -3.18 or a -1.01% drop, tied to the September 2023 contract.

In the realm of precious and industrial metals, shifts in prices and values have occurred as well. Gold (Comex) has a value of 1,946.60 USD/t oz., showing a decrease of -2.30 or a -0.12% decline, linked to the December 2023 contract. Gold Spot is valued at 1,913.76 USD/t oz., presenting an increase of 1.28 or a 0.07% rise. Silver (Comex) stands at 22.74 USD/t oz., reflecting a decrease of -0.08 or a -0.34% decline, aligned with the September 2023 contract. Copper (Comex) is valued at 371.90 USd/lb., revealing a decrease of -4.60 or a -1.22% drop, tied to the September 2023 contract. Platinum Spot shows a value of 916.07 USD/t oz., signifying a positive shift of 5.50 or a 0.60% increase.

Lastly, within the agricultural sector, shifts in prices and values are evident. Corn (CBOT) holds a value of 487.25 USd/bu., showing a decrease of -9.00 or a -1.81% decline, tied to the December 2023 contract. Wheat (CBOT) is valued at 653.75 USd/bu., revealing a decrease of -10.00 or a -1.51% drop, corresponding to the December 2023 contract. Cocoa (ICE) is priced at 3,357.00 USD/MT, indicating a decrease of -1.00 or a -0.03% decline, linked to the December 2023 contract. Furthermore, Cotton #2 (ICE) stands at 87.89 USd/lb., showcasing an increase of 1.74 or a 2.02% rise, connected to the December 2023 contract. Lastly, Live Cattle (CME) holds a value of 181.33 USd/lb., reflecting a decrease of -1.20 or a -0.66% decline, tied to the October 2023 contract.

• Equity Market Volatility: The text suggests that equities are experiencing fluctuations and volatility, likely due to the mixed signals from the U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) reports. The uncertainty about whether the Federal Reserve will raise rates again in September is causing hesitancy among investors, resulting in little change in both Canadian and U.S. stocks on Friday and for the week. This trend might continue as investors seek more clarity on the direction of interest rates.
• Inflation Impact on Equities: The data indicates that the growth sectors of the equity market, such as technology, consumer discretionary, and communication services, lost ground due to the slightly hotter-than-expected PPI data. Rising government bond yields are likely a response to this inflationary pressure. The impact of inflation on various sectors will likely continue to be a focal point for market movements.
• Inflation Focus: With both the CPI and PPI reports showing some inflationary pressure, inflation remains a significant concern for investors. The higher-than-expected PPI readings, coupled with the potential for continued upward movement in commodity prices and a strong labor market, could influence the Federal Reserve's decision regarding interest rates. The upcoming inflation reading before the Fed's September meeting could have an impact on their decision-making.
• Seasonal Trends and Market Outlook: The historical trend of August and September being less favorable for stocks, with increased volatility, suggests that market participants should be prepared for potential fluctuations and downturns during this period. Despite this, the overall outlook for equities seems positive due to the evolution of growth and inflation. Diversifying into sectors with lower valuations and employing strategies like dollar-cost averaging and fixed-income laddering are recommended to navigate potential market swings.
• Valuations and Selective Investing: The strong gains in the equity market, coupled with flat earnings growth for the S&P 500 and TSX, have led to increased valuations. To make informed investment decisions, investors should adopt a more selective approach, focusing on sectors with lower valuations that may offer growth potential. This suggests that careful stock selection will be crucial in the current market environment.
• Potential for Lower Yields: The recommendation to ladder fixed-income holdings to benefit from potential lower yields in 2024 implies that market conditions might support a downward trajectory in interest rates. This prediction aligns with the anticipation that inflation might continue to move in a favorable direction throughout the rest of the year, potentially influencing the Fed's decision-making and overall market sentiment.