A Slow Week on the Markets with Worrying Economic Data Left Most in Negative Territory

UK & Europe: Manufacturing Flop

Data showing manufacturing figures for the wider eurozone, as well as local economies, have been released showing worrying signs of economic weakness and therefore left stock markets languishing. 

The Eurozone, Spain, Italy, France and notably Germany all saw a fall in manufacturing output.

In turn, the Euro Stoxx 50 fell by 3.09% for the week, with the French CAC 40 index being the biggest faller of the major European economies (down by 3.89%). 

Increasing government bond yields also compounded economic worries.

In tough times on stock markets, investors tend to move towards the more stable bond markets.

UK government bond yields hit their highest level since 2008, whilst German, French and Italian government bonds also saw their yields rise. 

Americas: Never Ending Jobs

US markets had a slow week due to the closing of markets for Independence Day, with the major market indicators ending the week flat and discouraged by the Federal Reserve meeting minutes and unemployment data. 

The Fed minutes showed a clear direction toward further interest rate hikes, which never pleases markets and shows fears of economic turmoil. 

Furthermore, more jobs were created again in June according to unemployment data, with unemployment slipping in June from 3.7% to 3.6%. 

Whilst people being in work is a good thing, it’s not so great for those trying to tame inflation and curb spending. 

Meanwhile, Chile and Mexico voted to keep their interest rates flat, with both already being above the 10% mark. 

Argentina announced that it will allow deposit accounts to be opened in Chinese Yuan for the first time, after they face a dire shortage of the USD. 

Finally, the Argentinian Peso has fallen over 80% to the dollar just in 2023.  

Asia & Australasia: Market Rally Eases

Asian markets were subdued for the week, echoing a slow week on US markets and weak economic data emerging around the globe. 

The Japanese Nikkei 225 index fell by 2.4%, having hit 33 year highs recently. 

In better news, the Japanese Yen has strengthened slightly to the dollar, as speculation on their need to intervene in the currency markets eased. 

Data revealed that private sector activity in China was at its lowest level in six months.

Whilst the Shanghai index remained relatively flat on this news, the Hong Kong index fell by 2.91%. 

Lastly, the Australian Central Reserve Bank voted to keep interest rates untouched. This did little to stimulate the Australian market however, as the ASX 50 was down by over 2% for the week.

Stock World: Pharma Trial Results

The British-Swedish pharmaceutical giant AstraZeneca saw shares fall 9% after announcing disappointing trial results. 

Whilst the results weren’t as poor as most people would think, they didn’t match up to investors hopes for the future which resulted in rapid sell-off.

Other pharmaceutical companies were also down on the back of the news, although share prices of the sector have struggled to rally after the Covid-19 pandemic.