Weekly summary 25-29 July 2022

USA

Unexpectedly, the positive trend returned to the equity markets, with the main indexes showing a good recovery this week. Strangely, the GDP data, negative compared to expectations, was ignored by most investors who maintain a positive stance.

One of the reasons for this positive sentiment was the good earnings data from some companies. Many tech giants that have a strong weight in the indices showed good results, in some cases even better than expected.

There was also the FOMC meeting where a 0.75% interest rate hike was announced, something already discounted by the market. Combined with the fact that the economy presented some good data, investors are becoming more optimistic and expect the FOMC to slow down its more aggressive monetary policy.

Europe

Europe is in a very similar situation, where bad news seems to be being ignored. News such as July’s inflation hit a new high of 8.9%, up 0.3% from the previous month.

It also continues to receive less and less gas from Russia. This week it cut capacity at Nord Steam to 20%, citing maintenance needs.

Asia

In Japan, markets ended slightly negatively due to a mix of news. Some positive news that increased risk appetite. But the risk of a possible recession in the US, and the continuing problem they face with COVID-19 reduced risk appetite in Japan’s markets.

The regulatory dispute between China and the US continues to be relevant. There is a possibility that the Chinese giant Alibaba will be banned from the American stock markets due to a limitation of access to information by China.

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