Stocks start August cautiously after strong July performance

📰 After the best month since 2020, global equities are trading slightly weaker at the beginning of August – earnings reports and economic data remain in focus. The latest economic data showed further signs of recession. US GDP data showed two consecutive quarters of negative GDP, while Eurozone GDP surprisingly increased. Economic data from China also disappointed (unexpected decline in China's manufacturing purchasing managers' index) as the Chinese economy suffers from China's strict zero COVID policy. 

Investors are eagerly awaiting the U.S. labor market report next Friday, which will provide further insight into the strong labor market. Solid job growth in the U.S. has so far led economists to believe that the U.S. is not yet in a recession. 

Investors and analysts still expect the Fed to slow its next rate hikes – as the economy also shows signs of slowing down. Lesser concerns about very tight monetary conditions continue to support the ongoing rally, which I believe can continue into August. However, I still believe there will be more evidence of a typical recession that will eventually lead to another sell-off. Equity markets may end the day slightly weaker as some of last week's strongest gainers saw profit taking.

Broader USD strength looks increasingly limited – although a weak EUR will keep the USD in demand. The JPY continues to recover. Commodity prices may continue to recover from the sharp losses in June. Oil prices will remain at the levels seen in recent months, but it will become increasingly difficult to get above $100/barrel (WTI). I expect tailwinds for oil prices as no increase in oil production quotas is likely at Wednesday's OPEC+ meeting. Overall risk sentiment remains improved, supporting riskier assets as well as AUD and GBP.

Investors are also watching U.S. House of Representatives Speaker Nancy Pelosi's trip to Asia. A statement from her office did not mention a possible stop in Taiwan. A visit would significantly increase tensions between the US and China.


🇺🇸 US Markets ➡️/↘️
Cyclical Stocks ➡️/↘️
Tech/Growth Stocks ➡️/↘️
Financial stocks ➡️
Energy ➡️/↘️

💱 Forex Markets
AUD ↗️
JPY, GBP ➡️/↗️
USD, CHF ➡️/↘️

⚒ Commodity Markets ↕️
Oil prices ↕️
Natural Gas prices ↕️/↘️
Metal prices ➡️/↗️
Precious Metals ➡️/↗️

⚡️Crypto Market ➡️/↘️

(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)

Yours, Robert 📈🌅🔍