Daily global market review

The market ended the week on a negative note, influenced by ongoing consolidation efforts and concerns about global growth prospects. In the early afternoon, the major indices reached their highest levels as a few large-cap stocks recovered from initial losses. However, selling pressure resumed, interrupting the rebound attempt.

Ultimately, all major indices closed in the red, with losses ranging from 0.7% to 1.4%. The downward movement followed disappointing preliminary June manufacturing Purchasing Managers' Index (PMI) reports from several countries, including Japan, Germany, the UK, the eurozone, and the US. These reports indicated that economic activity in the manufacturing sector was contracting, raising worries about the impact of previous interest rate hikes on the overall economy.

The concerns about global growth were reflected in falling commodity prices, the strengthening of the US dollar, and declining Treasury yields. The US Dollar Index rose by 0.5% to 102.91, while WTI crude oil futures dropped 0.4% to $69.18 per barrel, and copper futures declined by 2.0% to $3.80 per pound. Additionally, the yield on the 2-year Treasury note fell by five basis points to 4.75%, and the yield on the 10-year Treasury note fell by six basis points to 3.74%.The market retreat was widespread and orderly, with decliners outnumbering advancers by more than a 2-to-1 margin on both the NYSE and the Nasdaq. Among the 30 Dow components, 24 experienced declines, and all 11 sectors of the S&P 500 closed in negative territory.

The communication services sector showed the smallest loss, boosted by a gain in Meta Platforms. The health care and financials sectors also exhibited relative strength with modest losses. On the other hand, the utilities and consumer discretionary sectors experienced the largest declines.

Trading volume was unusually high due to the reconstitution of the Russell Indexes. In terms of economic data, the preliminary June manufacturing PMI came in at 46.3, lower than the previous reading of 48.4. The preliminary June services PMI was reported at 54.1, down from 54.9 in the previous period. No significant US economic data is expected on Monday. Overall, the market sentiment was influenced by global growth concerns arising from weak manufacturing PMIs. Additionally, there was a sense that the market was due for a pullback following a recent strong performance. The reconstitution of the Russell Indexes also contributed to the trading activity.

The market in the United States saw mixed performance, with the Dow Jones Industrial Average closing at 33,727.43, down 219.28 points or 0.65%. The S&P 500 index ended at 4,348.33, recording a loss of 33.56 points or 0.77%. The tech-heavy NASDAQ Composite fell by 138.09 points or 1.01% to close at 13,492.52. In terms of volatility, the VIX index increased by 0.53 points or 4.11% to reach 13.44. Meanwhile, the Russell 2000 index, representing small-cap stocks, experienced a decline of 26.54 points or 1.44%, finishing at 1,821.63.

Moving to Canada, the S&P/TSX Composite index decreased by 162.67 points or 0.83%, ending the day at 19,418.23. The S&P/TSX 60 index, which includes 60 large-cap stocks, closed at 1,170.07, down 9.44 points or 0.80%. In Brazil, the BOVESPA index registered a slight increase of 42.90 points or 0.04%, settling at 118,977.10. In Chile, the S&P IPSA index declined by 83.74 points or 1.45% to reach 5,679.56. The Mexican market, represented by the S&P/BMV IPC index, recorded a loss of 221.40 points or 0.41%, closing at 53,341.91.

Across European markets, the STOXX Europe 50 index dropped by 6.94 points or 0.18% to 3,945.54, while the STOXX Europe 600 index closed at 453.14, down 1.56 points or 0.34%. The FTSE 100 index in the United Kingdom ended at 7,461.87, decreasing by 40.16 points or 0.54%. In Italy, the FTSE MIB index declined by 200.42 points or 0.73%, settling at 27,209.66. The CAC 40 index in France closed at 7,163.42, down 39.86 points or 0.55%.

Moving to Asian markets, the Nikkei 225 index in Japan fell by 483.34 points or 1.45%, closing at 32,781.54. In Hong Kong, the Hang Seng index dropped by 328.38 points or 1.71% to reach 18,889.97. The Shanghai Composite index in China declined by 42.46 points or 1.31%, finishing at 3,197.90. In Australia, the S&P/ASX 200 index closed at 7,099.20, down 96.30 points or 1.34%. The KOSPI index in South Korea decreased by 23.60 points or 0.91%, settling at 2,570.10. In Taiwan, the Taiwan SE index showed a slight increase of 17.49 points or 0.10% to reach 17,202.40.

The BSE Sensex closed at 62,979.37, reaching a high of 63,240.63 and a low of 62,874.12. It experienced a decrease of 259.52 points or 0.41%. The Nifty Midcap 150 closed at 13,077.50, with a high of 13,242.40 and a low of 13,063.50. It recorded a decrease of 164.30 points or 1.24%. The Nifty 50 closed at 18,665.50, reaching a high of 18,756.40 and a low of 18,647.10. It exhibited a decrease of 105.75 points or 0.56%. The Nifty 50 Value 20 closed at 9,607.65, with a high of 9,672.10 and a low of 9,600.25. It experienced a decrease of 77.90 points or 0.80%. The highest losers include the Nifty Midcap 150, Nifty Midcap 100, Nifty Smallcap 50, and Nifty Smallcap 100, which experienced declines of 1.24%, 1.24%, 1.17%, and 1.17% respectively.

In the cryptocurrency market, the Nasdaq Crypto Index increased by 33.71 points or 1.95% to 1,763.89. Bitcoin experienced a gain of 796.00 points or 2.66%, closing at 30,755.00. Ether rose by 17.70 points or 0.94% to 1,893.90. Litecoin saw a significant increase of 5.28 points or 6.14%, ending at 91.31. XRP remained relatively stable.

Regarding bonds and rates, the yield on the 3-month Treasury remained at 5.150%, while the 2-year Treasury yield decreased by 0.041 points to 4.750%. The 5-year Treasury yield dropped by 0.046 points to 3.991%. The 10-year Treasury yield declined by 0.056 points to 3.740%, and the 30-year Treasury yield also decreased by 0.056 points to 3.814%.

In the currency market, the Euro to US Dollar exchange rate closed at 1.0937, showing a decrease of 0.21%. The British Pound to US Dollar exchange rate also declined to 1.2714, down 0.26%. The US Dollar to Canadian Dollar exchange rate increased to 1.3216, up 0.46%. The US Dollar to Swiss Franc exchange rate rose to 0.8968, with a gain of 0.18%. The US Dollar to Japanese Yen exchange rate closed at 143.6950, up 0.44%.

In the overview, the Bloomberg Commodity index (BCOMTR:IND) closed at 228.45, representing a decrease of 1.91 points or 0.83%. The UBS Bloomberg CMCI index (CMCITR:IND) ended at 1,464.57, showing a decline of 19.16 points or 1.29%. The Reuters/Jefferies CRB index (CRYTR:IND) closed at 292.18, experiencing a decrease of 2.98 points or 1.01%. The Rogers International index (RICIGLTR:IND) finished at 3,583.27, recording a loss of 30.44 points or 0.84%. The S&P GSCI index (SPGSCITR:IND) exhibited a decrease of 76.48 points or 2.29%, closing at 3,267.91 yesterday.

In the energy sector, WTI Crude Oil (Nymex) (CL1:COM) settled at 69.16 USD/bbl., down 0.35 or 0.50%. Brent Crude (ICE) (CO1:COM) closed at 74.36 USD/bbl., indicating a gain of 0.22 or 0.30%. RBOB Gasoline (Nymex) (XB1:COM) ended at 251.72 USd/gal., experiencing a decrease of 3.29 or 1.29%. Natural Gas (Nymex) (NG1:COM) recorded an increase of 0.12 or 4.64%, closing at 2.73 USD/MMBtu. Heating Oil (Nymex) (HO1:COM) finished at 240.71 USd/gal., showing a decrease of 5.84 or 2.37%.

In the precious and industrial metals category, Gold (Comex) (GC1:COM) closed at 1,929.60 USD/t oz., indicating an increase of 5.90 or 0.31%. Gold Spot (XAUUSD:CUR) ended at 1,921.21 USD/t oz., showing a gain of 7.20 or 0.38%. Silver (Comex) (SI1:COM) settled at 22.55 USD/t oz., down 0.12 or 0.53%. Copper (Comex) (HG1:COM) closed at 381.55 USd/lb., experiencing a decrease of 8.50 or 2.18%. Platinum Spot (XPTUSD:CUR) finished at 921.70 USD/t oz., recording a decrease of 3.58 or 0.39%.

In the agriculture sector, Corn (CBOT) (C 1:COM) settled at 588.00 USd/bu., experiencing a decrease of 32.75 or 5.28%. Wheat (CBOT) (W 1:COM) closed at 746.50 USd/bu., down 6.25 or 0.83%. Cocoa (ICE) (CC1:COM) ended at 3,203.00 USD/MT, showing a decrease of 7.00 or 0.22%. Cotton #2 (ICE) (CT1:COM) settled at 78.67 USd/lb., experiencing a decline of 1.48 or 1.85%. Live Cattle (CME) (LC1:COM) closed at 170.78 USd/lb., indicating a decrease of 0.37 or 0.22%.

1. Equity market caution: Concerns about lingering inflation pressures and potential central bank tightening are expected to continue driving investor caution. This cautious sentiment is likely to persist in the equity markets.
2. Market performance: The S&P 500 posted a weekly loss after a five-week winning streak, and global stocks recorded their largest weekly decline in over three months. This suggests that the recent trend of market gains might be reversing or experiencing a correction.
3. Impact on oil prices: Oil prices were lower for the day and down almost 5% for the week. This indicates that the worries about inflation and central bank policies are influencing commodity markets, including oil.
4. Rate hike expectations: The Bank of England's surprise rate hike and indications from Fed Chair Powell that more interest rate hikes are likely until there is progress on inflation point to the expectation of continued tightening policies by central banks. However, it is also mentioned that the Fed's tightening campaign might be nearing its end, possibly with one more rate hike in the following month.
5. Market pullback as a correction: The market weakness observed during the week is described as a payback for the strong market rally experienced in the previous quarter. It is suggested that this pullback should be viewed as a correction rather than a sign of a major downturn. Opportunities for a rebound and a more sustainable market rally are anticipated in the future, with a potential broader participation of stocks and sectors.