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Author: Anatol Antonovici
Senior Reporter
Anatol Antonovici

Weekly Market Review - August 26-30

As of late Friday, stock markets in the US and Europe rose over the week on increased optimism that the US-china trade conflict would ease soon.

In the US, S&P 500 and NASDAQ have added over 2.7% each while Dow gained more than 3% over the week. German DAX 30 and French CAC 40 rose over 2.8% each.

The yield on the American 10-year Treasury note declined to 1.52% from 1.60%.

In the commodity market, West Texas Intermediate (WTI) crude oil added about $3 to $56.35, driven by a reported decline in US crude inventories.

In the cryptocurrency market, Bitcoin has lost about $500 to trade at around $9,500.

Macroeconomic News

Exports Put The Brake on Germany’s Economy

Germany’s gross domestic product (GDP) slowed in the second quarter, driven by weak exports. On Tuesday, the Federal Statistics Office said that the economy had contracted by 0.1% in the three months through June after a 0.4% growth in the first quarter. Exports declined more than imports during the second quarter, fueled by weakening global demand amid trade war disputes between the US and China. Construction investment also put pressure on the economy, as it declined 1.0% over the quarter.

British House Prices Surged 0.6% in August

House prices in the UK showed the best performance in three months. On Friday, mortgage lender Nationwide Building Society said that housing prices jumped 0.6% year-on-year after increasing 0.3% in July. The house price growth has slowed since the Brexit referendum, particularly in London. However, the market seems to note a robust price increase at a national level. Economists expect the growth in British house prices to contract despite the recent bounce.

US Car Sales Likely Rose 5% Over The Month

US auto sales will likely increase by 5% in August compared to the same period in 2018, according to local consultancy firms J.D. Power and LMC Automotive. The probable growth was driven by increased volume boosted by higher sales prices and manufacturer incentives. The consultancies expect the total auto sales in the US to have reached 1.62 million in August. The sales of new cars have probably increased by 5.8% to 1.4 million units. Americans tend to pay for SUVs, with the average price of new cars reaching $33,322 – a record for the month of August.

France’s GDP Exceeded Previous Estimates

France’s gross domestic product (GDP) accelerated at a faster pace in the second quarter compared to previous estimations. The economic growth was driven by strong business investment that offset a slowdown in consumer spending. The INSEE statistics agency said on Thursday that the GDP had grown 0.3% in the second quarter, the same pace as in the first quarter. Growth in consumer spending slowed to 0.2% compared to 0.3% in the first quarter.

US Consumer Confidence Weakened

US consumer confidence declined in August but only slightly as optimism on the economic state improved to the highest level since the 2000s. On Tuesday, the Conference Board released its index on consumer confidence, which fell to 135.1 in August compared to 135.8 in the previous month. The July figure was revised upward. Analysts surveyed by Reuters on average expected the index to tumble to 129.5.

Hong Kong’s Exports Hit by Protests

Hong Kong’s exports declined for the ninth month in a row, though at a slower pace than anticipated. The city’s economy is negatively influenced by the Sino-US trade war and local anti-government protests. Thus, exports fell last month by 5.7% compared to the same period of 2018, to the equivalent of $43.2 billion. Analysts expected a more dramatic decline by 8.2%. On the other side, imports fell more than economists’ estimates – by 8.7% to HK$370.8 billion,

Upcoming News to Watch

On Monday, the UK, eurozone, and Japan will report on their manufacturing purchasing managers’ indices (PMI). The US will also publish its manufacturing PMI the next day.

On Wednesday, the UK, eurozone, and Japan will release PMI data again, at this time for their services sectors. Besides, the eurozone will report on its retail sales. Elsewhere, the Bank of Canada will hold a meeting to decide its interest rates.

On Thursday, the US will release non-manufacturing and composite PMI. The US Labor Department will update on the initial jobless claims.

The week will end with several significant indicators. The eurozone will report on the GDP growth, while the US and Canada will release employment data. The long-awaited US nonfarm payrolls report might impact the price of the US dollar.

On Monday, markets in the US and Canada will be closed in observance of the Labour Day, while India will celebrate the Ganesh Chaturthi holiday.

Meet The Author
Anatol Antonovici
Anatol Antonovici
Senior Reporter

Anatol has been writing for our news site for a year and is the newest member of our team. While he’s new to us, he’s certainly not new to trading with over 10 years’ experience being a professional financial journalist and working in the markets.

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