Recap –
US stock prices were again in the green last week. The S&P 500 rose 0.9%, the Nasdaq increased by 0.2% and the Dow Jones jumped 1.6%. Thursday’s US CPI Inflation data was the economic highlight of the week that markets used to provide clues for potential Fed rate cuts this year. The mainline number came in slightly lower than expectations at 3%, boosting the chances of two potential Fed rate cuts by the end of the year. The Greenback fell against most of its rivals while gold prices jumped to a two month high. Platinum prices remained above the $1010 level, but Palladium’s price descended to a two week low. Natural gas prices continued their recent downtrend and recorded a two month low. In geopolitics Israel and Hamas began a new round of negotiations on a potential ceasefire. In France broadly pro-European left wing and Macron’s centrist parties came first and second in the final round of parliamentary elections.
This Week–
The shock news of the weekend was the attempted assassination of former President Trump who is standing for re-election against President Biden. Trump travelled to the Republican Convention on Monday after being treated for a light flesh wound and is now clear favourite to beat Biden in US November elections. On Monday gold prices responded to the news by rising above $2420, but the dollar declined by the end of the session. Fed Chair Powell made dovish comments at the Economic Club of Washington and on Tuesday US Retail Sales data came in slightly above expectations.
Stocks –
NETFLIX
Netflix’s price fell by 6% last week, dropping below $645 and hitting a four week low. The drop came after the stock hit a more than two year peak last week, amid reports of positive returns. Its been a positive year for Netflix so far with better than expected results and the announcement of deals with TKO Holdings to stage sporting events and the continued success of shows such as Formula 1: Drive to survive. The company also built on its subscriber base after cracking down on password sharing last year. Netflix will release its 2nd Quarter earnings on July 18th.
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY (TSMC)
Taiwan Semiconductor’s price fell 1.7%, even though the stock hit an all time high last week after positive returns before close of business on Friday. The value of the chipmaker stock has increased by $420 billion at this year and the company is expected to be worth more than $1 trillion dollars soon. On June 11th TSMC indicated that sales in the second quarter had increased by 40%, compared to forecasts of a 36% rise. The company will post its earnings results on July 18th.
Commodities
Crude Oil
Crude Oil prices declined by 1.2%, but remained above $82.1 after recording a two week low on Wednesday. It was a volatile week for oil, but a larger than expected fall in oil inventories wasn’t enough to pare losses by Friday’s close. Worse than expected data from China and somewhat easing tensions in the Middle East likely had an impact on crude prices last week.
Gold
Gold prices climbed 1% by Friday’s close and recorded another multi week high with the precious metal trading above $2410 dollars. The week’s boost might have been influenced by lower than expected US CPI Inflation and lower US data throughout the week. CME Group’s Fedwatch tool states it’s most likely that the Federal Reserve will cut US interest rates twice by the end of the year.
Wheat
Wheat prices fell by 6.5% with the commodity hitting an almost three month low last week as prices fell to just above $550. The commodity declined after the US Department of Agriculture released bearish July supply and demand estimates. Stocks rose substantially to 856 million bushels while supplies also continued rising. The US wheat crop is now projected to be its largest in five years, adding to an already oversupplied global wheat market.
EUR/USD
The Eurodollar moved higher and finished the week above $1.09 after the Euro continued to strengthen following the unexpected third place showing of the Eurosceptic National Rally coalition in the second round of French parliamentary elections. The dollar declined after US CPI Inflation figures came in lower than expected, as hopes grew for two potential interest rate cuts in September and December.