Global Stock Market Analysis- (3-7 July 2023)
The major global stock market indexes ended lower during the week that ended on 7 July. The stock market indexes in US, Europe, China, and Japan fell due to fear of interest rate hikes by the US Fed for a longer period and weak economic data.
The US Stock Markets – Weekly Updates
The US stock market indexes closed lower during the holiday-shortened week, markets traded half a day last Monday and Tuesday was a holiday on account of Independence Day. The growth stocks performed better than value stocks during the week. Tesla boosted the market sentiments after reporting better-than-expected deliveries while AstraZeneca’s trial results for a new lung drug disappoint the pharma sector.
The US market sentiments were hit on Wednesday after the minutes of the Fed’s last meeting were released, which revealed that more rate hikes are on the card this year. The expectation further solidifies on Thursday after the batch of strong economic data was released. Markets fell sharply, Dow was down 450 points on fear of higher interest rates for a longer period.
Meanwhile, Friday’s monthly job reports showed a different picture, the report missed estimates for the first time in 15 months. Though June payroll data missed expectations and fueled hopes of a less hawkish Fed, still investors fear that Fed would hike interest rates in its next meeting.
The manufacturing PMI released Monday indicated a contraction in hiring trends in the sectors while service employment showed the opposite picture. The yields on benchmark 10-year US Treasury note jumped on Thursday after the release of strong economic data and on an expectation of Fed’s rate hikes. It fluctuated on Friday after June job data was reported but remained above 4 percent.
European Stock Market Indexes- Weekly Updates
In Europe, stock market indexes closed lower during the week on fears of monetary policy tightening. The slowdown in China also weighs on the market sentiments, as investors are disappointed with the lack of measures taken by government officials to boost the Chinese economy.
The weakness in the German economy was measured from different angles during the week, with the data from industrial production, factory orders, and exports pointing to economic weakness in the second quarter. The eurozone factory gate prices fell in May but retail sales still remain weak.
The central bank’s (ECB) monthly survey showed that inflation will be erased to 3.9% in a year’s time lower than the 4.1% surveyed in April, but the ECB president still remains hawkish to achieve the inflation target of 2 percent. According to Halifax, the house price fell in the UK, the largest decline since 2011.
Asian Stock Markets Updates.
Asian stock market indexes ended mostly lower during the week, as investors fear more interest rate hikes by the central banks and a slowdown in the Chinese economy. The Indian stock market indexes managed to close in the green zone during the week. You can read about the Indian stock market weekly updates here.
Japan Stock Market
Japan’s stock market indexes closed lower during the week after hitting a 33-year high, as investors booked profits in strongly performing technology stocks. The market sentiments were dampened by the fear that US Fed would hike more interest rates which could slow down the economy. However, the ultra-lose policy from the Bank of Japan (BoJ) and the weakness in the yen cheered exporters and limited the market downside.
Chinese Stock Market
Chinese stock markets ended lower this week, as the recent economic data raised concern about the slowdown in the economy. The private survey showed that the manufacturing activity in China eased in June compared to the previous month while services activity fell lower than expected.
Though both data came above 50-marks, which means in expansion territory. However, the downside was limited, as China’s second-highest-ranking official- Premier Li Qiang, pledged “ spare no time” in implementing various measures and policies to strengthen China’s post-pandemic recovery.
Hong Kong benchmark, the Hang Seng index also closed sharply lower during the week.
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