Despite showing a lackluster performance on Friday due to weak corporate earnings, the 3 main indices on Wall Street saw weekly gains last week. Dow Jones added +2.0% to close at 31,899.29, the S&P 500 was up by +2.4% to end at 3,961.63, while the tech-heavy Nasdaq gained +3.3% to close at 11,834.11. Dow Jones and the S&P 500 marked their biggest weekly
percentage gains in 4 weeks.
Out of the 16 major indices that MIDF tracked, 15 were in the positive territory except for Shenzhen which declined by -0.2%. Among the top advancers were Bombay’s Sensex (+4.3%), Tokyo’s Nikkei (+4.2%), and Jakarta’s JCI (+3.5%).
Based on the US Labour Department data, the initial unemployment claims have increased to 251,000 (+7,000) during the week ended July 16, the highest since November as more companies proceeded to announce job cuts amid growing
concerns over a recession. On an adjusted basis, initial claims rose to 248,991 last week. In the recent weeks, big tech companies including Microsoft Corp and Apple Inc have warned that they will slow down on hiring due to the global
economic uncertainty.
After 11 years, the European Central Bank (ECB) has raised its benchmark deposit rate on Thursday by 50-basis points to 0%, more than expected as it has previously guided for a 25-basis point hike. The policymakers have also unveiled its Transmission Protection Instrument (TPI), a new bond purchase scheme aimed to help more indebted euro zone countries, including Italy, and to prevent financial fragmentation within the currency bloc.
According to the Office for National Statistics, Britain’s annual consumer price inflation (CPI) rose to +9.4% in Jun-22, its highest rate in 40 years. This was up from +9.1% in the month prior and slightly above consensus estimates of +9.3%. The latest rise shows that Britain has had the highest rate of inflation among the Group of Seven advanced economies in almost 40 years. Investors are now expecting the Bank of England (BoE) to raise the interest rates from 1.25% to 1.75% next month.
The Bank of Thailand (BoT) is expected to raise its key interest rate for the first time since late 2018 from a record low of 0.5% at the next meeting. The central bank governor said that the economic recovery is still not broad-based with the export sector performing better than its pre-pandemic levels, while tourism remains low. He ruled out an off-cycle policy meeting ahead of the one scheduled on Aug 10 as the factors to be monitored are still within forecasts. In Jun-22, the BoT forecasted the economy to grow by +3.3% this year and +4.2% next year, with the headline inflation expected to be at +6.2% and +2.5% in 2022 and 2023 respectively.
On Friday, Indonesia’s trade minister stated that the country is considering removing a domestic sales requirement for palm oil exports. This was underpinned by the high inventories which have derailed the recovery of palm oil fruit prices. After putting a temporary ban on exports in late May, Indonesia requires companies to sell a portion of their output domestically before issuing export permits, under a policy known as DMO. However, the previous temporary ban on shipments coupled with the DMO policy had led to a surge in stocks, storage issues, and a dip in the price of palm oil fruit received by farmers.
MIDF Research
