UK & Europe: An Uncertain Sentiment Spooks the Region

After a lot of indecision behind the scenes, the Bank of England decided to raise interest rates by a quarter of a basis point (0.25%).

A statement was released released stating that they understand the pain continued interest rate changes causes, whilst markets remained muted in their response to the widely anticipated raise.

Meanwhile, Germany has announced some challenges in the economy, with high inflation and rising interest rates. These struggles spooked investors, and saw the German DAX 40 index drop by 3.24.

Due to the scale of Germany’s economy, this movement is set to have a huge impact on the rest of Europe in the days and weeks to come.  

Nonetheless, Futures, which are a complex financial instrument that provide indications of what traders are expecting from markets, looked quietly positive for the European major markets.

Although with Spain’s industrial production data, as well the Eurozone’s retail sales data scheduled to be released later today, it’s unlikely to be a week to celebrate.  

Americas: S&P 500 Drops in Response Fitch Downgrades

The American S&P 500 index has decreased in the last week, with the index falling by 2.27%.

It is believed to be a result of the Fitch’s decision to downgrade the government, which has taken it from the highest possible rating (AAA) to the second highest rating (AA+).

Fitch claims the downgrade is mostly because of the heavy debt situation that the US government finds itself in, as well as the general financial situation of the government.

Whilst the downgrade doesn’t mean anything especially tangible, it may cause investors to question their unwavering belief in the stability of one of the world’s leading economies.

Meanwhile, US non-farm payrolls, which measure of how many jobs are being created in Americawhen looking outside of farms, also shows a slight decrease in unemployment(from 3.6% to 3.5%).

The US economy added fewer new jobs than expected last month, with official data showing non-farm payroll rose by 187,000 in July, below forecasts of an increase of 200,000.

According to experts, this data offers enough evidence of cooling labour market conditions to weigh in favour of no additional rate hikes. 

Asia & Australasia: Trades Mixed as Investors Await Chinese and Indian CPI Data

Asian stock markets trade mixed following mixed US employment data. 

Meanwhile, the Shanghai Composite Index rose 0.6% to 3,301.26 after China's central bank governor told real estate developers on Thursday they would be allowed to raise more money by selling bonds.

Furthermore, China's top economic committees announced on Friday that the government will implement additional measures to boost consumer expenditure and enhance local liquidity.

The lack of specifics about an additional stimulus plan from the Chinese government, however, has dampened investor expectations.

Meanwhile, the Reserve Bank of India (RBI) is expected to hold interest rates at 6.5% at its upcoming policy meeting.

Looking ahead, the Indian Consumer Price Index (CPI) forJuly and Industrial Production for June will be released on Friday. It’s worth noting that the RBI started hiking in May 2022 and has maintained the repo rate of 6.5% since February.

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Stock World: Tech Giants Apple and Amazon Deliver a Mixed Bag  

Amazon reported earnings way above analysts’ expectations yesterday, with a return to growth that hasn’t been seen since 2020, and which stimulated a stock increase of 10%.

Apple, on the other hand, reported its third consecutive quarter of declining sales, as the global slowdown is affecting demands for their phones.

The world's most valuable firm, Apple fell to a more than one-month low and lost around $144 billion in value as of Friday's close.

The tech giant also downgraded their outlook for the next quarter, despite climbing digital subscriptions and raising overall profits.

Unsurprisingly, the Apple share price fell slightly on the back of the announcement. 

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