In this weekly recap, we delve into the evolving landscape of US inflation and its sweeping impact across various sectors. From stock market responses to oil price shifts and the dollar's performance, we uncover how inflation trends mold market behaviors and federal policies.
Curious about the details? Dive in to discover more!
US inflation edges up to 3.2% in July
US headline inflation for July saw a minor rise from June, supporting arguments for the Federal Reserve to maintain interest rates in its September meeting. The Bureau of Labor Statistics indicated the consumer price index (CPI) increased by 0.2 percentage points, mirroring June's figures, taking the annual rate to 3.2% from June's 3%. This slight increase doesn't suggest a notable surge in inflation. Core inflation, omitting food and energy, also rose 0.2% for July.
Following this data, future market traders projected a 91% chance the Fed would hold interest rates stable in September.
Stocks see modest uptick; Disney shares boosted by streaming price update
Stocks rose slightly on Thursday following new inflation data, revealing an annual increase for the first time in over a year, though disinflationary trends remained favorable. The Dow Jones closed up by 0.2%, the S&P 500 remained approximately unchanged, and the Nasdaq Composite increased by 0.1%. These indices reduced their earlier gains by the end of the session. As the earnings season approaches its end, Alibaba ($BABA) and Ralph Lauren ($RL) announced their quarterly results. Additionally, Disney ($DIS) shares surged nearly 5% after the announcement of a price hike for its ad-free streaming plans.
Oil prices declined on Thursday as concerns over another US interest rate hike waned, with Brent Crude nearing January highs. Despite a rally since June, Brent dropped 1.3% to $86.40 a barrel, and WTI decreased 1.9% to $82.82. The recent rise in oil prices was influenced by extended output cuts from Saudi Arabia and Russia and potential disruptions to Russian oil shipments due to tensions with Ukraine.
However, deflationary trends in China's consumer sector and declining factory gate prices in July raised alarms about fuel demand in the world's second-largest economy.
US Dollar nears 103.00 amid rising yields despite Fed's optimism on inflation
The US Dollar Index (DXY) experienced significant fluctuations, initially dropping to a weekly low, but ultimately closing positively. Despite a quiet start during the early Asian session, the index is trending upwards, hovering around 102.65. This upward momentum comes in spite of the Fed's confidence in managing inflation, and as market participants await more data.
This concludes our weekly recap. Have a great weekend and see you next week! 👋
IMPORTANT NOTICE: Any news, opinions, research, analyses, prices or other information contained in this article are provided as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and therefore, it is not subject to any prohibition on dealing ahead of dissemination. Past performance is not an indication of possible future performance. Any action you take upon the information in this article is strictly at your own risk, and we will not be liable for any losses and damages in connection with the use of this article.
RISK WARNING: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail client investors lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
NAGA is a trademark of The NAGA Group AG, a German based FinTech company publicly listed on the Frankfurt Stock Exchange | WKN: A161NR | ISIN: DE000A161NR7.
The website is operated by NAGA Capital Ltd which is authorised and regulated by the Financial Services Authority Seychelles (FSA) under licence No. SD026. The registered address of CT House, Office 9A, 2nd Floor, Providence, Mahe, Seychelles. Tel: +248 4373121
The group also includes NAGA Global (CY) Ltd, with registered address at Nikokreontos 2, NICE DREAM, 6th floor, Flat/Office 601, 1066, Nicosia, Cyprus. NAGA Global (CY) Ltd is wholly owned by The NAGA Group AG.
RISK WARNING: Derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how derivatives work and whether you can afford to take the high risk of losing your money. This is not investment advice. Trading with NAGA Trader by following and/or copying or replicating the trades of other traders involves high levels of risks, even when following and/or copying or replicating the Lead Traders. Such risks include the risk that you may be following/copying the trading decisions of possibly inexperienced/unprofessional traders, or traders whose ultimate purpose or intention, or financial status may differ from yours. Before making an investment decision, you should rely on your own assessment of the person making the trading decisions and the terms of all the legal documentation.
Restricted countries: NAGA Capital Ltd does not provide services for the residents of certain countries, such as Afghanistan, Albania, American Samoa, Anguilla, Australia, Austria, Barbados, Belarus, Belgium, Bermuda, British Indian Ocean Territory, Bulgaria, Burkina Faso, Canada, Cayman Islands, Central African Republic, Christmas Island, Cocos (Keeling) Islands, Congo, The Democratic Republic of the, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Falkland Islands (Malvinas), Finland, France, Germany, Gibraltar, Greece, Guam, Haiti, Heard Island and McDonald Islands, Hungary, Iceland, Iran, Islamic Republic of, Ireland, Isle of Man, Israel, Italy, Jamaica, Japan, Jersey, Korea, Democratic People's Republic of, Latvia, Libyan Arab Jamahiriya, Liechtenstein, Lithuania, Luxembourg, Mali, Malta, Montserrat, Mozambique, Myanmar, Netherlands, New Zealand, Norfolk Island, Norway, Palestinian Territory, Occupied, Pitcairn, Poland, Portugal, Romania, Russian Federation, Saint Helena, Ascension and Tristan Da Cunha, San Marino, Senegal, Serbia, Slovakia, Slovenia, Somalia, South Georgia and the South Sandwich Islands, South Sudan, Spain, Sri Lanka, Sweden, Switzerland, Syrian Arab Republic, Trinidad and Tobago, Tunisia, Turks and Caicos Islands, Uganda, Ukraine, United Kingdom and any other countries where the citizens have British proof of identity (i.e. British Virgin Island, Gibraltar, Isle of Man etc.), United States, U.S. Minor Islands, Vanuatu, Virgin Islands, British, Virgin Islands, U.S., Yemen, and Zimbabwe.