Tech Sector Leads Nasdaq to Fifth Consecutive Monthly Gain

Markets end month up to compete another positive period

The Nasdaq completed its 5th successive monthly gains finishing up 381bp in July. The tech index is now up 30.8% since the end of February and is back at its highest level since the end of 2021.

In the same period the S&P is up 15.6% and Dow Jones 8.9%. All this with increasing rates and data showing multiple sectors facing recessionary issues. The aftereffects of vastly increased money supply still linger on. Equity markets are mildly lower at the open today with US ISM manufacturing the data to look out for to see if it can buck the trend.

RBA leave cash rate unchanged

RBA left rates unchanged at 4.1% following a cooling in inflation data earlier this month. Some further hikes may be required to return inflation to target in a reasonable time frame, but that will depend upon the data and evolving assessment of risks. The statement read that whilst inflation is declining it is still too high but that household consumption growth is weak and an ongoing source of uncertainty. The market had priced in a 66% chance of no hike and the Aussie dollar trades slightly weaker off the back of the statement.

July house price index retraces

UK July Nationwide house prices fell 0.2% vs an expected 0.2% gain m/m after June’s figure read positively. The annual reading falls further to -3.8% which is the weakest since July 2009. The average property price on the UK is now ￡260,828 with landlords still being hit by increased mortgage rates and not let up in red tape.

HSBC announces fresh buybacks as higher rates propel profits

London based lender which generates most of its income in Asia announced a second interim dividend at 10c/share and a buyback of up to $2bn. The company notched up pre-tax profits of $8.8bln and revenues of $16.7bln which soared over the half-year boosted by higher interest rates. The company’s CET1 stands at 14.7%. Stock trades up 2.8%.

BP to return more cash to shareholders despite profit miss

BP follows suit with plans for an additional $1.5bln buyback and a 10% hike to its dividend pay-out. Q2 adjusted net profit missed at $2.59bln vs estimated $3.51bln but the results follow the patterns set by BP’s peers, all of which have focussed on increasing returns to investors even as the surge in prices that spurred last year’s record profits has abated. The stock trades up 2%.