Market Review 17th July 2024
Simplify the craziness
DAILY REVIEW
N
3 min read
Summary
Equity markets were mostly lower on Wednesday, with weakness in U.S. technology shares weighing on markets. The weakness in tech was driven by reports that the U.S. is considering tightening trade restrictions on companies that export semiconductor equipment to China. In response:
S&P 500 declined by over 1.3% for the day.
Nasdaq declined by 2.8%.
TSX finished lower by 0.7%.
Dow Jones posted a 0.6% gain for the day.
Russell 1000 Value Index gained about 0.2%.
Asian Markets were mixed overnight.
European Markets were mostly lower following U.K. inflation data that was slightly above expectations.
10-year GoC Yield closed around 3.34%.
10-year U.S. Treasury Yield finished around 4.15%.
Oil Prices finished higher by more than 2.5%.
Gold Prices were lower by 0.2%.
U.S. Small- and Mid-Cap Rally Takes a Breather
Despite closing lower on Wednesday, U.S. small- and mid-cap stocks have had an impressive run over the past week:
U.S. Small-Cap Stocks are up by roughly 11% year-to-date.
U.S. Mid-Cap Stocks have gained roughly 5% since last Wednesday and are now higher by roughly 9% year-to-date.
Inflation Data showed U.S. core consumer price index (CPI) inflation rose by 3.3% in June, the lowest rate since April 2021, prompting markets to price in two to three Fed rate cuts in 2024.
Small-Caps gained over 3.5% following the CPI reading and finished last week up by 6%.
Mid-Caps gained 1.6% on Thursday and finished last week higher by 3.4%.
U.S. Housing-Market Activity Shows Signs of Improvement in June
U.S. housing starts for June were at a seasonally adjusted annual rate of 1.35 million, better than the prior reading of 1.31 million and ahead of expectations for 1.3 million:
U.S. Building Permits were at a seasonally adjusted annual rate of 1.45 million, above the May reading of 1.4 million and better than consensus expectations for 1.39 million.
Despite the improvement from May to June, both housing starts and building permits were lower on a year-over-year basis.
High-Flying Chipmakers See Worst Plunge Since 2020
Markets saw a significant downturn in the semiconductor industry due to potential new trade restrictions:
Nvidia Corp. (NVDA), Advanced Micro Devices Inc. (AMD), and Broadcom Inc. (AVGO) drove a semiconductor gauge down almost 7%, the biggest slide since 2020.
ASML Holding NV tumbled over 10% despite reporting strong orders.
Tokyo Electron Ltd. led losses in the Nikkei 225 Stock Average.
Apple (AAPL) dropped 2.5%, Amazon.com (AMZN) lost 2.6%, Alphabet (GOOGL) sank 1.6%, Tesla (TSLA) skidded 3.1%, and Meta Platforms (META) tumbled 5.7%.
Nasdaq Nosedives 2.7% as Biden Trade Policy Fears Pound Chip Stocks
Chipmakers got walloped in a broad market slide:
Nasdaq Composite plunged 2.8%.
Dow Jones Industrial Average held a small gain and climbed 0.6%.
Russell 2000 gave back a relatively mild 0.9%.
Regional Bank Stocks Rally Thanks to Powell
Regional bank stocks are rallying due to Fed Chair Jay Powell's hints at potential interest rate cuts:
Index Tracking Regional Banks (KRE) rose by 17% over the last seven trading days.
PNC (PNC) and US Bancorp (USB) also saw surges.
US Bonds and Treasury Yields
Bond yields remained relatively stable:
10-year GoC Yield closed around 3.34%.
10-year U.S. Treasury Yield finished around 4.15%.
Futures, Crude Oil, Gold, & Other Commodities
In the commodity space:
Oil Prices finished higher by more than 2.5%.
Gold Prices were lower by 0.2%.
Notable Earnings & Big Movers
Key movers in the market:
Netflix (NFLX) advanced by 1.2%.
Crypto: Bitcoin, Eth, and Other Coins
Crypto markets saw various movements:
Detailed analysis to be included based on the latest available data.
References
