AUGUST 2024
MACROECONOMIC REPORT
MACROECONOMIC REPORT
The report provides a detailed analysis of significant macroeconomic trends and developments in developed and emerging markets. It covers inflation, GDP, retail sales, industrial production, unemployment, yield curves, stock indices, interest rates, commodities, sector and industry dynamics, IPO and M&A deals,
new unicorns, and cryptocurrency performance.
new unicorns, and cryptocurrency performance.
SUMMARY
Monthly
Macroeconomic Report
Sep 20, 2024
Macroeconomic Report
Sep 20, 2024
Key Rate and CPI , %
US inflation slowed to 2.50% in August from 2.90% in July, leading to expectations that the US Federal Reserve will cut interest rates to 4.75 – 5.00% at its September meeting.
The ECB is forecast to cut the rate to 4.00% in September as Eurozone inflation remains at 2.20%.
In August, the Central Bank of China left the key rate at 3.35%, while experts consider it necessary to soften the monetary policy to maintain economic growth at the target level of 5.00%. Key rates in Indonesia and Brazil did not change.
The ECB is forecast to cut the rate to 4.00% in September as Eurozone inflation remains at 2.20%.
In August, the Central Bank of China left the key rate at 3.35%, while experts consider it necessary to soften the monetary policy to maintain economic growth at the target level of 5.00%. Key rates in Indonesia and Brazil did not change.
GDPNow model projects US GDP growth of 2.50% for the third quarter of 2024. Third-quarter expectations for Eurozone GDP growth for 2024 were revised upward but remained moderated at 0.70%. France's economy accelerated in the third quarter thanks to the Summer Olympics, which could drive an additional 0.30% of the country's GDP growth.
Industrial production in developed countries 2 years, YoY, %
In August, the growth rate of US retail sales slowed to 2.10% year-on-year from 2.70% in July. Retail sales in China also slowed to 2.10%, presumably due to weather-related events.
US industrial production was unchanged year-on-year in August, while capacity utilization in the manufacturing sector increased to 78.0% from 77.4% a month earlier. China's industrial production slowed to 4.50% year-on-year from July's 5.10%.
The US unemployment rate fell to 4.20% in August from 4.30% in July, bringing the unemployed to 7.1M and the labor force participation rate to 62.70%.
US industrial production was unchanged year-on-year in August, while capacity utilization in the manufacturing sector increased to 78.0% from 77.4% a month earlier. China's industrial production slowed to 4.50% year-on-year from July's 5.10%.
The US unemployment rate fell to 4.20% in August from 4.30% in July, bringing the unemployed to 7.1M and the labor force participation rate to 62.70%.
Yield curves for August 2024, 2023, and 2022 years
In August, the US Treasury yield curve shifted downward amid expectations of a long-awaited key rate cut at the Fed's September meeting. The yield on 10-year Treasury bonds fell from 4.04% to 3.91%. Meanwhile, UK bond yields rose in August.
The dollar index (DXY), which measures its strength against a basket of six other currencies, fell to 101.73 by the end of August from 104.05 at the end of July and set a new one-year low. Among the reasons for the spikes in volatility is Jerome Powell's announcement that inflation has fallen significantly and the labor market is no longer overheated, which means interest rates are about to fall.
The dollar index (DXY), which measures its strength against a basket of six other currencies, fell to 101.73 by the end of August from 104.05 at the end of July and set a new one-year low. Among the reasons for the spikes in volatility is Jerome Powell's announcement that inflation has fallen significantly and the labor market is no longer overheated, which means interest rates are about to fall.
FACT
Throughout August, the S&P 500 Index rose by 2.28%, the Dow Jones Industrial Average by 1.76%, and the NASDAQ Composite by 0.65%. Meanwhile, the indices have been up 18.42%, 10.28%, and 18.00% since the beginning of the year.
Dynamics of key stock indices, YTD
- Nine out of eleven sectors of the US economy demonstrated positive dynamics. The growth leaders were Consumer Staples (+5.99%), Real Estate (+5.73%) and Healthcare (+5.06%).
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The price of WTI crude oil futures fell by 5.59% during the month, while Brent crude fell by 2.25%. The decline in oil prices was caused by concerns about a slowdown in economic growth in the United States and China, which could lead to a decrease in demand for energy. Nevertheless, compared with the beginning of the year, the price of WTI crude oil has increased by 3.37%, and Brent by 0.33%.
- In August, the price of natural gas fell by 23.06% due to a decrease in demand due to cooler weather than expected and an increase in natural gas production in the United States.
- Despite investors' confidence in the US Federal Reserve's key rate cut in September, the price of gold rose by 2.36% in August 2024 due to a weakening US dollar. Since the beginning of the year, the price of gold has increased by 21.16% and silver by 21.27%. Over 5 years, the price of copper and aluminum increased by 63.55% and 41.59%, respectively, and steel fell by 13.46%.
Dynamics of energy commodities prices, YTD
- In August, the number of IPOs in the US totaled 13 (+30.0% MoM) with an aggregate value of about $1.91B (-73.2% MoM). Globally, there were 122 (-6.2% MoM) IPOs valued at $5.55B (-60.0% MoM).
- The number of M&A deals completed totaled 1,186 (-30.7% MoM) for $112.69B (+22.7% MoM), including 494 (-12.6% MoM) deals in the US for $94.9B (+123.9% MoM).
IPO dynamics in the USA, 2016 – 2024
M&A dynamics in the USA, 2016 – 2024
FACT
The list of unicorns was expanded to include 7 new non-public technology companies valued at more than $1 billion.
In the first 8 months of 2024, the price of the main cryptocurrency increased by 38.74%, and Ethereum, the second cryptocurrency by capitalization, by 9.87%. At the same time, in August, the price of Bitcoin fell by 8.60%, and Ethereum by 22.21%.
From August 4 to 5, the price of Bitcoin fell by about 12%, to $53,000. The price of Ethereum fell by almost 20% over the same period, to $2,100 at one point. The reduction in the capitalization of the crypto market by more than $400B was the result of a complex interplayof macroeconomic factors and growing geopolitical tensions.
From August 4 to 5, the price of Bitcoin fell by about 12%, to $53,000. The price of Ethereum fell by almost 20% over the same period, to $2,100 at one point. The reduction in the capitalization of the crypto market by more than $400B was the result of a complex interplayof macroeconomic factors and growing geopolitical tensions.
Dynamics of Bitcoin and Ethereum prices, YTD
Important notice: The figures presented in the reports for previous periods may be subject to subsequent backward-looking adjustments in later reports due to the delay in obtaining data on closed transactions and the possibility of their adjustments in the market intelligence systems used to extract deal data.
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