The major US equity indices moved lower Friday as investors digested July’s slowing but still resilient jobs numbers and a mixed batch of quarterly earnings reports, leaving the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite all down for the week. Equities looked like they might shake off an early wobble and moved higher for much of the afternoon, only for the enthusiasm to fade in the last couple of hours of trading. In contrast, European equity markets closed mostly higher on Friday, after a three-day selloff, with the Euro Stoxx 50 Index up 0.7% on the day but still down 3.0% for the week. 

Summary for 07.08.2023 

  • Most Asian shares moved in a flat-to-low range on Monday tracking mixed signals from US payrolls data released last week with the focus now turning to a slew of major earnings reports, as well as inflation signals from the world’s largest economies. Shares in Australia, South Korea, Hong Kong and mainland China declined, while Japanese equities fluctuated around the flatline. 
  • European shares are on track to fall following declines on Wall Street last Friday while US equity futures were on the rise as investors look ahead to a fresh batch of corporate earnings reports and key inflation data this week. 
  • Oil prices traded sideways this morning, sticking to their highest levels in nearly four months after major producers Saudi Arabia and Russia extended recent supply cuts, with the focus now turning to key inflation readings this week.  
  • The US Labour Department said Friday that 187,000 jobs were created in July. That’s a slight increase from the downwardly revised 185,000 jobs added in June, but slower than the 200,000 increase analysts were expecting and the smallest growth in more than a year. However, hourly wages still rose 0.4% in July from the month before, which was faster than the 0.3% analysts expected. On an annual basis, wages were up 4.4%. The unemployment rate edged down to 3.5% from 3.6%.  
  • Airbnb shook off early losses and gained about 0.3% on Friday as investors weighed the company’s better-than-expected forecast for the current quarter against slowing growth in bookings. Elsewhere, Bookings Holdings was up about 9% after the room-booking service delivered better-than-expected quarterly results and an upbeat forecast for travel demand the day before. 
  • Apple was down more than 4% after iPhones sales for the last quarter disappointed, overshadowing the company’s better-than-expected earnings and revenue. Meantime, Amazon was up more than 9% after delivering better-than-expected results for the previous quarter. 
  • Block dropped about 13.6% on Friday after the company behind the Square payment-processing service reported disappointing gross payments volume number for the last quarter, which overshadowed its better-than-expected earnings and revenue. 
  • Shares of Country Garden Holdings, one of China’s biggest property developers, tumbled on Monday after rating agency Moody’s downgraded the firm’s rating to B1 from Ba3 after it recently cancelled a $300 million share sale and capital raising. The rating agency said that the downgrade reflected growing concerns over weakening property sales, limited funding access, and a large amount of expiring debt over the next 12-18 months, which could dent the firm’s credit position and liquidity. 
  • The earnings season will slow down this week, with some two-thirds of S&P 500 companies having reported. Perhaps the most prominent company expected to report this week is Walt Disney, scheduled after the close on Wednesday. Others to watch include UPS, Under Armour, Eli Lilly, and Lyft. 
  • On the economic front, all attention will be focused on the US inflation report scheduled for Thursday. In the US, investors will also be keeping a close eye on producer prices and the Michigan Consumer Sentiment. Additionally, important events include China’s inflation and trade data and GDP growth figures for the UK.