Market Wobbles Indicate a Tough Market Season Amid China's Struggle

UK & Europe: Interest Rate Fears

It was a rocky week on the European markets, with the wider Euro STOXX 600 index falling by 2.34% for the week. 

This all follows growing fears around China’s economic slowdown, which has unsurprisingly had a domino effect on European indexes, which have taken a bruising this week.

In better news, UK inflation was shown to have slowed, from 7.9% in June to 6.8% in July. 

However, wages were shown to still be increasing – as was core inflation – which furthered the pressure on the Bank of England to continue interest rate changes. 

The Norwegian central bank also lifted their interest rates, whilst signalling that there may well be more interest rate changes to come. 

Americas: Market Wobble Continues

The US markets closed their third consecutive week in negative territory. 

Trading volumes on the markets are often down in August as more people take their holiday month – this year is no exception. This means that any changes on the markets are amplified, as there is not a lot going on. 

Small cap stocks particularly suffered last week on the US markets, which may be indicative of the tougher economic climate.

Economic data released showed that retail sales had increased by 0.7%, which was over double what analysts had expected for this figure. Bars, restaurants, utilities and new houses all saw an increase. 

In the meantime, Argentina allowed their currency to devalue over 20% to the USD, whilst simultaneously increasing their interest rate to 118%. 

Having struggled with rampant inflation this year, the IMF is on hand to assist with the government’s financial issues. 

However, political changes may see a rumoured abandoning of the Argentinian Peso and a move toward the USD. 

Asia & Australasia: China’s Economic Downturn

Further fears of an economic downturn in China caused local and global markets to slump, with the Shanghai index falling 1.8% in the week and the Hang Seng index falling 5.89%. 

The beleaguered Chinese property company Evergrande filed for bankruptcy protection in the USA, furthering worries of the impact of a Chinese economic crash. 

In the meantime, Japan released data showing that their economy had grown by 6% in 2023, with exports driving the growth – notably that of ca

The Japanese Yen is weaker than usual at the moment which is encouraging their exports and helping to control inflation. 

Stock World: Vietnamese Vehicle IPO

VinFast, a Vietnamese electric vehicle company, broke the global IPO spell by going public this week. 

Having initially launched via a SPAC led debut, the value soared up to $85 billion, a value which exceeds that of Ford and General Motors combined. 

However, being SPAC led, details on the company have been kept quiet for most of the investors for a while. 

It is yet to turn a profit as a company and delivered only 11,300 cars in 2023, which is considerably lower than other competitors on the market. 

SPAC led debuts on the stock market are growing in their notoriety for producing a quick profit but lacking in longevity. However, as the electric vehicle space grows in size and competition, it could be that VinFast bucks the trend.