BORISLAV ANDONOV, investment intermediary – Yug Market EAD
The Bulgarian SOFIX index recorded a growth of 0.89% last week. The most profitable companies were “Shelly Group” with an increase of 7.22%, “Gradus” AD – with 6.08%, and Sopharma – with 2.29%. In the US, Wall Street stocks rose on Tuesday, led by gains in the shares of major banks. Morgan Stanley and Bank of America reported second-quarter earnings, adding to the positive sentiment. The S&P 500 closed 0.7% higher and the KBW index of banking stocks rose 3% on the day. Shares of Morgan Stanley jumped more than 6% on the day, making it one of the best performers in the S&P 500 on Tuesday. Bank of America shares also rose more than 4 percent as it reported better-than-expected second-quarter earnings. U.S. retail sales rose less than expected, according to Commerce Department data released Tuesday. In June, the value of retail purchases increased by 0.2%, while in May – by 0.5%. This showed a more stable consumer outlook towards the end of the second quarter and had a positive impact on the markets.
However, quarterly reports from several major tech companies were disappointing for investors on Thursday. This had the biggest negative impact on the NASDAQ, which fell nearly 2% for the day. Additionally, positive data on the US labor market also came out on Thursday, and traders took the news as an opportunity for two more rate hikes. The current losses are causing a temporary halt to the rapid upward movement the stock has seen this year.
The S&P 500 rose 18% and the Nasdaq 100 rose an impressive 41%,
despite the uncertainty in the economy due to the Federal Reserve’s aggressive tightening measures. The main focus of the week was whether the rally in a small number of large-cap stocks and the excitement surrounding artificial intelligence would continue. The S&P 500 has already beaten the forecasts of many experts who believed it would end the year lower, defying their expectations of a challenging market in 2023 due to a looming recession.
European stocks clawed back some of the losses of the past few weeks, rising roughly 2%. The data on the consumer price index in the euro area reported a decline, and for the month of June the index rose by 5.5% compared to the previous 6.1%. This reduction was in line with analysts’ expectations. The lowest annual rates were recorded in Luxembourg (1.0%), Belgium and Spain (both 1.6%).
The highest annual rates were reported in Hungary (19.9%), Slovakia (11.3%) and the Czech Republic (11.2%)
Britain’s FTSE also posted a week of gains following positive economic indications. On Wednesday, the consumer price index fell more than expected, an indicator that the rise in interest rates in the country is likely to slow down. This had a positive effect on the markets and as with Europe UK shares recovered much of their losses from the previous weeks. Retail sales data also had an additional positive effect on shares. The numbers showed a bigger-than-expected increase, a sign that the consumer outlook continues to change. However, recent forecasts suggest that Britain’s economic growth will continue to lag behind the euro zone next year and inflation will remain high, creating a gloomy backdrop for the upcoming general election. According to a monthly survey of economists by Bloomberg, gross domestic product (GDP) is expected to grow by just 0.6 percent in 2024, well below the euro zone’s expected 1 percent growth.
However, Asian markets lacked positivity as they failed to find direction this week. China’s second-quarter GDP grew 6.3% from a year earlier, just under 1% from the first quarter. Deflation is a big issue right now, with prices across the economy falling for the first time since 2020, and
youth unemployment exceeds 21%.
Calls for more stimulus have increased, but Beijing has hinted that the measures may be limited, given a growth target of around 5% a year. A Communist Party Politburo meeting later this month will decide on economic policy for the rest of the year. Japan’s consumer price index rose faster than expected in June. The data could spell trouble for the Bank of Japan governor as he advocates for continued monetary stimulus. It is expected that there will be no changes in the fiscal policy at the upcoming meeting of the central bank, which will be held next week.
Gold gave back its gains from the start of the week and finished positive. Despite strong momentum in the US labor market, the precious metal showed limited reaction to positive employment data. The number of workers filing for unemployment benefits for the first time continues to decline, indicating a healthy labor market. However, the price of gold is experiencing some strong selling pressure at the moment. Oil continued to rise last week as well, with a nearly 4% increase for the period. In the coming week, investors await data on the manufacturing index in Germany, with forecasts for a slight decrease. U.S. consumer confidence data is expected on Tuesday, with analysts expecting it to rise. On Thursday, the European Central Bank is expected to make a decision on interest rates in the eurozone, with a 25 basis point hike forecast.
Drop in grain on international exchanges
Wheat prices on international exchanges fell more than 4 percent on Friday as traders appeared to shrug off concerns about Ukraine’s exports. That drop comes after a significant 11 percent jump over the previous three sessions, during which Ukraine and Russia issued warnings that ships heading to each other’s ports could be seen as military targets. The heightened tension has raised concerns that exports from the region could be disrupted. Ukraine is the sixth largest exporter of wheat in the world.
2023-07-24 16:15:00
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