What Moved The Markets This Week 📈
Fed Hikes Rates 25 Basis Points, Volkswagen Buys Stake In Xpeng, Altman's New Worldcoin Project, Twitter Rebrands As "X", PCE Inflation Falls To 4.1%, and MSFT + GOOG + META Earnings
Sunday Morning Markets
Trading Week 30, covering Monday, July 24 through Friday, July 28. Your weekly financial markets update, in less than 5 minutes.
The Week In Review ⏪
Interest rate policy changes:
Fed hikes 25 bps, “data-driven for future decisions”
ECB hikes 25 bps, “inflation too high for too long”
BoJ to loosen grip on yield curve, “greater flexibility” in its policy
PCE inflation falls to 4.1%, from 4.6% in May
Twitter rebrands as “X” and scraps its original bird logo
OpenAI’s Sam Altman launches his Worldcoin crypto project
StabilityAI releases its new text-to-image model
China to offer more support for troubled real estate
Volkswagen buys a stake in Xpeng, to develop EVs together
Earnings from Microsoft, Alphabet, Meta — see breakdowns below
US Markets 🇺🇸
Fed hikes interest rates 25 basis points to bring the Fed Funds Rate to a target range of 5.25-5.5%, the highest level in more than 22 years. Chair Powell said they will make data-driven decisions on a “meeting-by-meeting” basis.
Fed’s key inflation gauge falls in June to the lowest level in two years, as the PCE Index showed inflation at 4.1% for the year, down from 4.6% in May. Consumers continued to spend, with expenditures up 0.5% on the month.
GDP growth in the second quarter beats estimates as the economy grew 2.4% annually, topping the consensus estimate of 2%. Consumer spending increased 1.6% and accounted for 68% of all economic activity during the quarter.
Business activity growth slowed to a 5-month low in July, dragged down by decelerating service-sector growth. S&P Global said its flash U.S. Composite PMI index fell to a reading of 52 in July, from 53.2 in June.
UPS, Teamsters reach labor deal to avoid a strike but is still subject to a ratification vote by the more than 300,000 workers. The agreement is worth $30B and includes wage increases for both full and part-time workers.
Banc of California and PacWest to merge in an all-stock deal to create a bank with over $36B in assets. To help fund the combination, the companies will sell $400M of new shares. PACW 0.00%↑ shares rallied 27% on Wednesday.
New home sales fall 2.5% in June after three straight monthly increases. The trend still remains positive as sales are up 23.8% for the year. Median prices for new homes have fallen 4.0% this year.
Rest of World 🌏
ECB raises rates by a quarter percentage point, bringing its main rate to 3.75%. The European Central Bank added “inflation continues to decline but is still expected to remain too high for too long,” and didn’t offer a future outlook.
Bank of Japan loosens grip on its Yield Curve Control after announcing it will have “greater flexibility” in its monetary policy. The move shocked the markets, sending the yen whipsawing against the dollar while Japanese stocks slid.
IMF raises its global growth forecast to 3%, up from 2.8% at its April assessment, despite China’s recovery losing steam. They also shared concerns about tighter credit conditions and depleted household savings in the U.S.
China pledges economic support for troubled real estate causing investors to pile into shares of public real estate developers. The Hang Seng Mainland Properties Index jumped 14% following the news.
Volkswagen buys stake in Chinese EV brand Xpeng and announces they will jointly develop two new EVs together. As part of the deal, Volkswagen will invest about $700 million in Xpeng, taking a 5% stake.
Tech ⚡
OpenAI's Sam Altman launches Worldcoin crypto project offering its “World ID”. To signup for World ID, a customer must do an in-person iris (eye) scan using Worldcoin’s ‘orb’. The project already has 2 million users from their beta.
Stability AI releases its latest image-generating model called Stable Diffusion XL 1.0. The new model delivers “more vibrant” and “accurate” colors and better contrast, shadows, and lighting compared to its predecessor, Stability claims.
Samsung launches two new folding smartphones to fend off competition from rivals. The Galaxy Z Flip 5 has a larger cover display and a much tighter hinge. The Galaxy Fold 5 has a bright 7.6-inch display and reduced device thickness.
Crowdstrike looking to acquire Bionic AI, a security posture management platform for cloud service for between $200 million and $300 million. A deal has yet to be closed, but investors are confident enough that they’re close.
Waymo halts its self-driving truck program and shifts most of its capital, resources, and talent to ride-hailing. The move comes six years after Waymo first tested its autonomous vehicle system in Class 8 trucks.
Twitter rebrands to ‘X’ and gets rid of its bird logo as part of Musk’s elaborate plan to build an “everything” app that has features similar to Twitter, Substack, YouTube, PayPal, Amazon, TikTok, WeChat, and Baidu.
Product Hunt 🧠
Alpha Vantage Inc., the company that has brought you the Sunday Morning Markets newsletter, has been acknowledged by Hackernoon reviewers as a leading provider of financial market news powered by AI and natural language processing (learn more)
Earnings Reports 💰
See other breakdowns on our Twitter page.
Weekly Poll 🗳️
Week Ahead 📅
Monday
Europe - CPI Inflation (JUL)🇪🇺
Germany - GDP Growth (Q2)🇩🇪
China - Caixin Manufacturing PMI (JUL)🇨🇳
Earnings Reports: SoFi, ZoomInfo💰
Tuesday
US - JOLTS Job Openings (JUN)🇺🇸
US - ISM Manufacturing PMI (JUL)🇺🇸
Germany - HCOB Manufacturing PMI (JUL)🇩🇪
Australia - RBA Interest Rate Decision🇦🇺
Earnings Reports: AMD, Pfizer, Starbucks, Uber, Caterpillar, Jetblue, Pinterest💰
Wednesday
US - ADP Employment (JUL)🇺🇸
Earnings Reports: Qualcomm, Shopify, PayPal, Etsy, Robinhood, Mercado Libre, Unity💰
Thursday
US - GDP (Q2)🇺🇸
US - ISM Services PMI (JUN)🇺🇸
UK - BoE Interest Rate Decision🇬🇧
Earnings Reports: Apple, Amazon, Airbnb, Fortinet, Block, Cloudflare, WarnerBros, Coinbase, Expedia, Draftkings, Wayfair💰
Friday
US - Nonfarm Payrolls (JUL)🇺🇸
Canada - Ivey PMI (JUL)🇨🇦
Germany - CPI Inflation (JUL)🇩🇪
Earnings Reports: Fubo, Nikola, Fisker💰
Want to partner with Sunday Morning Markets? Click here to inquire.