A Resoundingly Positive Week on Global Markets with the Dow Jones Hitting a Winning Streak

Big earnings announcements are keeping investors positive in the face of interest rate changes

Zoe Burt
July 31, 2023
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A brief overview: 

UK & Europe: ECB Raises Interest Rates

Americas: Earnings Driving Markets

Asia & Australasia: China’s Stimulus Measures

Stock World: Tech Giants

UK & Europe: ECB Raises Interest Rates

The European Central Bank raised interest rates by 0.25%, taking them to their highest ever levels. 

Despite interest rate announcements, positive news from US earnings and China’s government stimulus measures helped to keep markets afloat, whilst the Euro Stoxx 50 ended the week on a high. 

Meanwhile, European financial sector announcements showed slightly more weakness, in comparison to the US.

Whilst retail banking is thriving on the back of high interest rates, investment banking arms are really struggling in the face of reduced deals and low investor sentiment in the European region. 

In other local news, Shell reported disappointing earnings believed to be on the back of the changing seasons. 

Ryanair also reported profits that quadrupled their least earnings seasons, reflecting the persistent consumer spending in spite of climbing prices. 

Christian Lue / Unsplash

Americas: Earnings Driving Markets

The Dow Jones hit 13 consecutive days of gains, which is the longest winning streak since 1987. 

Meta, Alphabet and Microsoft led the charge, with tech showing further strength. 

The financial sector also showed a reassuring level of resilience, with the beleaguered PacWest bank reaching an agreement with the Bank of California mid week, causing shares of the latter to soar. 

The Federal Reserve Bank raised interest rates by 0.25%, hinting that the likelihood of a recession before the end of the year was dwindling. 

GDP was also shown to have risen for the quarter, whilst inflation appears to be falling. This further good news left the markets closing the week on a high. 

Lo Lo / Unsplash

Asia & Australasia: China’s Stimulus Measures

China released data indicating slowing economic growth, causing many analysts to revise their expectations for the annual growth levels. 

The government announced further stimulus measures to help inject some energy into the economy, which markets responded very positively to. 

The Shanghai Composite was up by 3.42%, whilst the Hang Seng climbed a staggering 4.41%. 

This moves the market much closer into bull market territory, which is where many analysts would expect consistent growth. 

The Bank of Japan also announced greater flexibility to their yield curve control measures. This basically means that markets sense further optimism for the growth of the Japanese economy, with the Japanese TOPIX index going up by 1.3%. 

Fanette Guilloud / Death To Stock

Stock World: Tech Giants

There were major tech earnings announcements this week, with Meta, Microsoft and Alphabet leading the charge. 

Apple, Microsoft and Nvidia have been responsible for over 50% of the growth of the S&P 500, with Alphabet, Amazon, Meta and Tesla taking up a further 34%. 

Meta announced profits that exceeded analysts expectations, causing shares to soar by over 8%. Most of the investor hype seems to be generated by their latest progress into the AI field. 

Alphabet shares also shot up in value after a similarly successful earnings announcement, also tied to their AI progress. 

Microsoft unfortunately failed to hit the mark. Despite profits exceeding expectations, their cloud service fell in numbers and their AI partnerships failed to impress. 

Many are seeing this quarter as an AI trial for big tech, with their investigative success acting as a gauge point for the future. 

Rajeshwar Bachu / Unsplash

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