What’s in Bloom – First Week of August 2024

By Anna Nehrbas on August 5, 2024

Weekly data-driven insights on the markets and economy

1. Markets (Mostly) Back on the Decline
   Markets have been lackluster in the waning days of July. The S&P fell .5%, the Dow up .14% and Nasdaq fell into negative territory at -1.04% midday on Tuesday. Following last week’s tech selloff due to weak Alphabet and Tesla earnings, all eyes will be on Microsoft, Apple, Amazon, Meta and their associated AI initiatives. AI chipmaker AMD is set to kick off the week’s tech earnings after Tuesday’s close.[i]
2. Yields Await Fed Decision
   As 10-year yields hover between 4.15 and 4.20, the Fed holds its two-day meeting Tuesday and Wednesday this week. Expect traders to be dialed into Chair Jerome Powell’s rate decision, though it’s unexpected that Powell will cut rates at this week’s meeting. Most traders see the first rate reduction since 2020 coming at the September Fed meeting.[ii]
3. Delta Strikes Back
   Delta’s challenging week, with videos of stranded passengers wall to wall at its US hubs of Atlanta and Detroit, has the company reaching out to prominent attorney David Boies to pursue potential damages. Delta’s damage estimates from the faulty Crowdstrike update are expected to be $350 to $500 million. For its part, Crowdstrike’ stock lost nearly 25% of its value in the two trading days following the massive outages as concerns ramped up about the company’s business after the incident.[iii]
4. GDP Surprises Expectations
   Consumer spending led the way to a surprise in the GDP number for the April-through-June period at a 2.8% annualized pace. Analysts had been looking for growth of 2.1%. Private inventory investment and nonresidential fixed investment also led to the higher number. Some cracks in the consumer also showed up in the data; the personal savings rate continued to decelerate, and the Philadelphia Federal Reserve showed credit card balances at an all-time high going back to 2012.[iv]
5. Crude Eases on China’s Woes
   Increasing tensions in the Middle East are being overshadowed by China’s sluggish economy leading to the lowest level of crude imports since early June. China’s falling imports of crude oil pushed crude prices down 2%, below the $76 per barrel mark, seemingly unfazed by the Israel-Hezbollah escalation.[v]
6. Going For the Gold (And Cash, Cars, Etc.)
   Out of the 206 countries and territories competing for Gold/Silver/Bronze in the Paris Olympics, 33 have confirmed they’ll award athletes for winning such medals. Medal winners for the US stand to receive $37,500 for gold, $22,500 for silver, and $15,000 for bronze. Malaysia grants a lifetime pension to all medal winners, but those who earn gold also get a foreign car. Kazakhstan awards housing – the higher the medal, the bigger the apartment.[vi]

• [i] Ferré, Ines and Friar, Karen, “Stock Market news today: Nasdaq sinks, Nvidia drops 5% ahead of next round of Big Tech earnings,” Yahoo!Finance, July 30, 2024, https://finance.yahoo.com/news/stock-market-news-today-nasdaq-sinks-nvidia-drops-5-ahead-of-next-round-of-big-tech-earnings-141615307.html. Accessed July 30, 2024.
• [ii] Picchi, Aimee, “The Federal Reserve will make an interest rate decision this week. Here’s what to expect,” CBS NEWS, July 30, 2024, https://www.cbsnews.com/news/interest-rate-cut-decision-federal-reserve-july-september-meeting-2024/. Accessed July 30, 2024.
• [iii] Levy, Ari and Novet, Jordan, “Delta hires David Boies to seek damages from CrowdStrike, Microsoft after outage,” CNBC, July 29, 2024, https://www.cnbc.com/2024/07/29/delta-hires-david-boies-to-seek-damages-from-crowdstrike-microsoft-.html. Accessed July 30, 2024.
• [iv] Cox, Jeff, “U.S. economy grew at 2.8% pace in the second quarter, much faster than expected,” NBC NEWS, July 25, 2024, https://www.nbcnews.com/business/economy/us-economy-gdp-q2-2024-faster-than-expected-rcna163606. Accessed July 30, 2024.
• [v] Kimball, Spencer, “U.S. crude oil falls below $76 per barrel, lowest level since early June,” CNBC, July 30, 2024, https://www.cnbc.com/2024/07/30/us-crude-oil-falls-below-76-per-barrel-lowest-level-since-early-june.html. Accessed July 30, 2024.
• [vi] Harries, Kristen, “Here’s How Much Money Olympic Medalists Get When They Win Gold, Silver, or Bronze,” BuzzFeed, July 29, 2024, https://www.buzzfeed.com/kristenharris1/how-much-money-olympic-medalists-win-paris-2024. Access July 30, 2024.