European stocks closed the week at / near fresh highs but disappointing returns from tech stocks weighed on US indices.
UK
The FTSE 100 gained 0.6% over the week.
US
The S&P 500 eased 0.2% over the week, while the Nasdaq dropped 1.6%. Since its peak in mid-July, 16 of the 20 biggest detractors from the S&P 500 were tech stocks, groups, including Microsoft, Amazon, Alphabet, Tesla, Apple and NVIDIA. Meta Platforms is the only Magnificent Seven stock to have risen since mid-July. In contrast, the best-performing areas have been rate-sensitive sectors like real estate, utilities and financials.
US second-quarter GDP growth was revised up to 3.0% on an annualised basis, from an initial estimate of 2.8%.
Core PCE inflation was unchanged at 2.6% in June.
Shares of NVIDIA declined after its latest earnings report failed to top analysts’ lofty expectations, despite revenue more than doubling in the last quarter.
Warren Buffett’s Berkshire Hathaway became the first publicly traded US company outside the technology sector to be valued at $1tn. Buffett has spent the year selling off stocks — including half of the stake in Apple that generated a mammoth trading profit for Berkshire — and pumping the proceeds into cash and short-term Treasuries. Shareholders have rewarded Berkshire, pushing its valuation up by more than $200bn this year.
Europe
The Eurofirst 300 rallied 1.3% over the week to close in on their May all-time peak.
Eurozone inflation slowed to 2.2% in July, the lowest level in three years due to lower energy prices, while core inflation slid to a four-month low of 2.8%.
Markets are betting on a quarter-point reduction in the European Central Bank’s benchmark interest rate at its September meeting.
Japan
The Nikkei 225 rose 0.7% over the week.
Pacific Basin ex Japan
China’s NBS Composite PMI eased to 50.1 from July’s 50.2, remaining at the lowest level since December 2022. The Manufacturing PMI fell to 49.1 in August from 49.4 in the preceding month, marking the fourth straight month of contraction in factory activity and the steepest decline since February. The Non-Manufacturing PMI China ticked up to 50.3 from July’s 8-month low of 50.2.
Emerging Markets
The MSCI EM Index fell 1.4% over the week.
Turkish stocks fell sharply in August as local interest wanes in the face of high interest savings accounts while foreign investors cash in on gains. Turkish policymakers are expected to unveil their medium-term economic plan in the coming weeks, and investors say they will closely scrutinise the documents for clues on how far President Erdoğan is willing to go in cooling Turkey’s economy and bringing down inflation.
Foreign institutional investors have turned net sellers of Indian shares in August, with net outflows of more than $1bn, according to data from Bloomberg and the Securities and Exchange Board of India.
Bonds
The yield on the US 10-year Treasury closed the week up 7 bps at 3.88%. Two-year yields eased 2 bps to close at 3.91%, almost eradicating the yield curve inversion.
The yield on the 10-year German Bund rose 7 bps over the week to close at 2.30%.
Commodities
Oil prices eased as higher-than-expected US inventories offset concerns about a shutdown in Libya and war in the Middle East.
