The American markets closed last week on a positive note, with a strong turnaround in the second half of the day. Core inflation data for July was released by the US on Friday. Core inflation increased by 0.2 percent in July compared to the previous month and by 2.6 percent compared to the same month last year, in line with analysts’ expectations. The S&P 500 rose by 1.0 percent, the Nasdaq Composite strengthened by 1.1 percent, and the Dow Jones Industrial Average traded up 0.6 percent.
Commodities traded mostly negatively on Friday, with oil prices dropping, especially WTI oil losing over 2 dollars per barrel. The reason for the price decline is that OPEC+ plans to increase oil production starting in October. According to six different OPEC+ sources, member countries are set to begin increasing production in October by 180,000 barrels per day, marking the first step in the plan to release the 2.2 million barrels per day that OPEC+ has voluntarily held back since mid-2023. The number of active oil rigs in the US remained unchanged last week at 483. WTI oil decreased by 2.3 dollars to a price of 73.6 dollars per barrel, while Brent oil fell by 1.1 dollars to a price of 78.8 dollars per barrel.
Among base metals, there was a mixed performance. Nickel saw the biggest decline, dropping by 1.7 percent. Aluminum fell by 0.8 percent, while copper retreated by 0.2 percent. Lead and tin advanced by 1.3 and 0.6 percent, respectively. Zinc added 0.5 percent. The price of gold fell by 17.1 dollars to a price of 2,503.9 dollars per ounce.
Among individual companies in the American markets, chipmaker Intel was the big winner on Friday. The stock surged by 9.5 percent after the company announced that it is considering divestitures and halting expansions at its factories. Intel is contemplating spinning off its foundry business, which involves making chips for other companies. Cybersecurity company Crowdstrike rose by 2.1 percent after HSBC bank upgraded the company to a buy rating.
The ten-year US Treasury bond yield climbed 5 basis points to 3.91 percent.
Asian markets opened Monday morning with negative trading. China is down after the country’s manufacturing Purchasing Managers’ Index (PMI) fell to 49.1 in August, compared to 49.4 in July. At 07:30, the Japanese Nikkei 225 is down 0.1 percent, the Hang Seng is trading 1.4 percent lower, and the Shanghai Composite Index is down 0.7 percent.
On the home front, new price targets have been released this morning. Goldman Sachs lowered the target price for SKF to 219 kronor (248) and reiterated a buy rating.
It’s a quiet day on the macroeconomic front. The day starts at 08:30 with Sweden releasing the Manufacturing Purchasing Managers’ Index. At 09:00, Turkey presents its GDP. Half an hour later, Switzerland releases the Manufacturing Purchasing Managers’ Index. At 11:00, Italy releases the Producer Price Index.
Analysis:
Last week’s positive performance in the American markets, despite some negative movements in commodities and Asian markets, indicates a level of resilience. Investors should keep an eye on oil prices as OPEC+ plans to increase production, which could impact the energy sector. Chipmaker Intel’s potential divestitures and cybersecurity company Crowdstrike’s positive momentum are worth monitoring for investment opportunities. The rise in the US Treasury bond yield may signal market expectations of future economic conditions. Overall, staying informed about global market trends and company-specific developments can help investors make informed decisions about their portfolios.