Weekly Market Recap: IT Outage, Retail Sales and Commodities Turbulence Shape the Week

During the period from July 15 to July 21, 2024, the financial market experienced significant influence from critical indicators, including the Consumer Price Index (CPI), Crude Oil Inventories, Retail Sales, and addresses delivered by the Federal Reserve Chair. This summary aims to present an overview of the major economic releases of the week and their impact on financial markets.

The S&P 500 saw mixed performance throughout the week, ending at 5,509 points, a decline of 1.95% from the previous week. The S&P 500 kicked off the week with an upside gap, reaching a record high of 56714.14, only to tumble to a weekly close of 5509.06. The Nasdaq Composite followed a similar trend, ending the week at 19,529.58, down by 4%. On the other hand, the Dow Jones Industrial Average edged higher by 0.66% from the previous week, closing at 40,299.94.

An incident caused by an update released by the cybersecurity organization CrowdStrike led to a widespread IT disruption on Friday, significantly affecting businesses globally. This incident, following multiple reports of technical difficulties, including the ‘blue screen’ error experienced by many Microsoft users, underscored the urgency of addressing IT issues.

In the United States, commercial crude oil inventories decreased by 4.9 million barrels compared to the previous week, while the price of crude decreased to 78.94 dollars per barrel, reflecting a 3.3% decline from the preceding week. This downward trend is attributed to concerns surrounding a potential deceleration in China’s economic expansion, mixed indicators from the United States, and a global slowing of oil demand.

Recent retail data from Canada indicated lower-than-anticipated sales, suggesting ongoing challenges in consumer spending. In response to this trend, speculation about an imminent interest rate reduction has surfaced. Additionally, robust retail sales in the United States strengthened the USDCAD exchange rate, causing it to rise by 0.69% compared to the previous week.

Anticipation and concerns surrounding the upcoming US presidential elections exerted upward pressure on Gold prices over the past week, potentially leading to higher levels.

Despite Gold reaching a new weekly high of 2483.62, profit-taking led to a 0.4% w/w decline in the value of this precious commodity. Similarly, the price of silver saw a downturn, dropping to 29.195 per troy ounce, marking a decrease of 5.1%. This decline can be linked to China’s underperforming manufacturing data and subdued demand for silver in the Asian region. It is worth noting that Gold recorded an intra-week decline of 3.4%, while Silver’s decline was 7%.

The EURUSD concluded the week at 1.08813, showing a 0.22% decline from the preceding week. This decrease is attributed to robust US Retail Sales and disappointing German PPI data. Additionally, the GBPUSD exchange rate experienced a 0.6% downturn relative to the previous week, driven by subdued Retail Sales in the UK.

Statements from Japanese officials regarding potential interventions notably affected market sentiment, resulting in increased volatility and a need for clear direction. Gopher remained flat in the week but declined for the third consecutive week to close at 157.441, down by 0.27%.