This week ahead || Aug 12th - Aug 16th 2024
Here's some news for the week ahead.
Whipsaw week for stocks leaves markets 'on edge' ahead of busy economic data week
The S&P 500 experienced significant volatility last week, with a 3% drop on Monday and a 2.3% rally on Thursday, reflecting market unease about the economy. This volatility underscores the market's fragility, as even routine jobless claims data triggered sharp reactions. Key inflation and retail sales data due this week could further influence market sentiment. Expectations for Federal Reserve rate cuts in September have cooled, and analysts anticipate continued volatility as markets react strongly to both positive and negative economic news.
Review: Rivian's updated R1S looks the part but left us wanting more
Rivian's updated second-generation R1 vehicles, including the R1S SUV, have hit showrooms after a major retooling of the Illinois assembly plant. While the R1T pickup received widespread acclaim upon its release, the R1S SUV struggled with ride and handling issues. The new version aims to correct these problems with improvements like in-house motors, reengineered battery packs, and a revised suspension setup. However, the R1S still faces challenges, such as an uneven ride and handling that falls short of expectations for a vehicle in its price range. Despite these issues, sales of the R1S are outpacing the R1T, although the SUV's performance remains a concern in the competitive luxury EV market.
What is the yen carry trade and why does it matter?
The yen carry trade, which involves borrowing yen at low interest rates to invest in higher-yielding assets, has recently contributed to global market turbulence. Factors such as the Bank of Japan's unexpected rate hike, fears of a US recession, and reduced confidence in tech stocks have made the trade riskier. UBS strategists argue that while the yen carry trade is under pressure, the scale of potential unwinding is smaller than some media reports suggest. Most "fast money" trades have already been liquidated, with the main risk now lying in $94 billion of "semi-fast money" trades.
Top 5 things to watch in markets in the week ahead
Investors are closely watching key inflation data set to be released on Wednesday, which could provide insight into the potential size of a rate cut expected from the Federal Reserve in September. Market volatility is anticipated, especially as retail earnings are scrutinized for indications of consumer spending strength. The July Consumer Price Index (CPI) data will be crucial, with modest inflation cooling possibly easing fears of prolonged elevated rates, while a weaker report could heighten recession concerns. Additionally, upcoming comments from Fed officials and ongoing earnings reports, particularly from major retailers, will be pivotal in shaping market sentiment. Meanwhile, oil prices have risen amid easing recession fears and geopolitical tensions in the Middle East, and UK economic data will also be in focus, potentially influencing the Bank of England's next monetary policy move.
