Jul. 12 Markets Report: Brace Yourselves, We’re in for a Bumpy Ride
Jul. 12 Markets Report: Brace Yourselves, We’re in for a Bumpy Ride

Jul. 12 Markets Report: Brace Yourselves, We’re in for a Bumpy Ride

Turmoil abounds in several G8 countries (can't wait to see what that means for world markets), the most talked about buyout of the year is in some serious trouble, and the crypto market may actually be turning the corner.

Darry Port

Updated Jul 12, 2022

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Russia’s Just Getting Started

  • President Putin has issued a warning that Russia’s war in Ukraine is just getting started, and that peace talks are only going to get harder over time. 
  • On July 9th, Russian rockets struck an apartment building in the city of Chasiv Yar, resulting in at least 24 confirmed dead. 

Rising Political Crises

  • Amid a growing lack of confidence in the Prime Minister of the UK, Boris Johnson formally resigned as PM on Thursday, stating that he would stay on until his successor is appointed. Following the resignation, the British pound (GBP) shortly traded 1.05% higher at $1.205 before cooling back down.
  • In more troubling news, Shinzo Abe, the former prime minister of Japan, was shot and killed on Friday while he was delivering a speech in the city of Nara.

Recessions and Economic Collapses

  • Sri Lankan Prime Minister Ranil Wickremesing stated on Wednesday that the island nation’s economy has collapsed due to mounting debt plus fuel, electricity and food shortages.
  • Atlanta Fed’s GDPNow indicator estimates that the US’ second-quarter output will contract by 2.1%. If this holds up, then the US would officially be in a recession since the first-quarter GDP contracted by 1.6%. 
  • Despite macro conditions, the US economy shows strong job growth. Nonfarm payrolls increased 372,000 for the month of June, with the unemployment rate remaining at 3.6%.

Stocks & Bonds

Inflation Coming in Red Hot

  • This past week, the 2-year Treasury yield rose above the 10-year note, a so-called yield curve inversion that many investors see as a recession indicator.
  • Despite the fact that strong job growth is a positive for the US economy, investors also see these numbers as a reason for the Federal Reserve to continue hiking interest rates until something breaks. 
  • Investors will be looking at key inflation data this week, with June’s consumer price index (CPI) releasing Wednesday and the producer price index (PPI) due Thursday. Economists are expecting CPI to come in at 8.8%.

Bond Yields

  • US2Y: 3.0738%
  • US10Y: 2.989%
  • US30Y: 3.173%

Stock Market Indices

  • Dow: 0.38%
  • S&P: 0.87%
  • Nasdaq: 2.61%

Stock Market Sectors

  • Telecom: 4.92%
  • Consumer Discretionary: 4.55%
  • Utilities: -2.87%
  • Energy: -2.39%

Sorry Twitter, No Deal

  • While the primary stock market indices are all slightly up for the week, the market could flip in an instant following the release of June’s inflation data and corporate earnings in the coming days. 
  • Twitter shares fell over 17% after Elon Musk terminated his $44 billion acquisition of the social media giant, with Musk claiming that the company wouldn’t disclose its fake account numbers. 
  • In response to this, Twitter has apparently hired the law firm Wachtell, Lipton, Rosen & Katz to sue Musk.
  • Asian stocks took a nosedive on Monday as hundreds of bank depositors gathered to protest after being unable to withdraw their funds from certain banks in China’s Henan and Anhui provinces.