Monthly Macroeconomic Report

June 2024
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.

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SUMMARY

Monthly
Macroeconomic Report
July 31, 2024

Key Rate and CPI , %

On June 6, the European Central Bank cut its key rate by 25 basis points to 4.25% for the first time since 2019. The decision was justified by the slowdown in inflation in Germany (2.20%) and France (2.20%). CPI in the US fell from 3.30% in May to 3.00% in June, prompting Fed officials to say they “will not wait until inflation reaches 2% to cut interest rates.”

The central banks of China, Brazil, Indonesia and Mexico followed the previously outlined policy, keeping key rates at the level set in May. At the same time, China decided to stimulate key sectors of the economy by issuing long-term treasury bonds instead of cutting its key rate.

As of June 28, the US economy is expected to grow by 2.2% in the second quarter, below May forecasts.

According to the French National Institute of Statistics and Economic Studies (INSEE), the Olympic Games, which will begin in July 2024 in France, could add 0.30% to the country's GDP in the third quarter.

Industrial production in developed countries 2 years, YoY, %

In June, retail sales in the United States decreased to 2.30% year-on-year. Retail sales in China rose 2.00%, slowing significantly from a 3.70% increase in May. However, according to JATO Dynamics, China will overtake the US in auto sales for the first time in 2023. Chinese brands sold 13.43 million new cars, while US brands sold 11.93 million.

US industrial production rose 1.58% year-on-year in June, beating expectations, and capacity utilization in the manufacturing sector rose to 78.8% from 78.3%.

The US unemployment rate rose to 4.10% in June, an anti-record since December 2021. The number of unemployed rose by 162,000 to 6.81 million.

Yield curves for June 2024, 2023, and 2022 years

The US Treasury yield curve shifted lower after US retail sales data for May rose less than expected, while French long-term bond yields rose after President Emmanuel Macron decided to call snap parliamentary elections.

The dollar index (DXY), which measures its strength against a basket of six other currencies, rose to 105.85 by the end of June from 104.62 at the end of May. According to a report released by the European Central Bank, global central bank euro holdings are set to fall by around €100 billion in 2023 to a three-year low of 20%.

FACT

During June, the S&P 500 Index rose by 3.47%, the NASDAQ Composite by 5.96%, and the Dow Jones Industrial Average by 1.12%. Since the beginning of the year, the indices have increased by 14.48%, 18.13%, and 3.79%, respectively.

Dynamics of key stock indices, YTD

Only five of the eleven sectors of the US economy showed positive dynamics: Technology (+8%), Consumer Discretionary (+4%), Communications (+3%), Real Estate (+2%) and Health Care (+2%).
At the June 2 meeting, OPEC+ countries extended voluntary oil production cuts by about 2 million barrels per day. The price of WTI crude oil rose by 5.56% in June and Brent by 4.52%, bringing the year-to-date growth to 14.00% and 10.47%, respectively.
Natural gas prices rose 2.90% in June after 27.7% in May. However, natural gas prices have begun to decline since mid-June. They may continue to decline in July; among the reasons are rising inventories and the possible emergence of a surplus of natural gas supplies in the US.
Since the beginning of the year, the price of gold has increased by 12.75% and silver – by 22.50%. Over five years, copper and aluminum prices have increased by 62.11% and 41.65%, respectively, and steel has decreased by 12.67%.

Dynamics of energy commodities prices, YTD

In June, the number of IPOs in the US totaled 18 (+63.6% MoM) with an aggregate value of about $3.7B (+27.7% MoM). Globally, there were 150 (+23.0% MoM) IPOs valued at $8.3B (-16.2% MoM).
The number of M&A deals completed totalled 1,418 (-13.3% MOM)for $ 66.8B (-51.8% MoM), including 481 (-16.8% MoM)deals in the US for $ 38.7B (-65.1% 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 3 new non-public technology companies valued at more than $1 billion.

In the first six months of 2024, the price of the main cryptocurrency rose by 45.65% and Ethereum by 49.69%. At the same time, in June, the prices of the two leading cryptocurrencies fell by 8.49% and 9.89%, respectively. Despite the slowdown in inflation in the United States and the possibility of the US Federal Reserve soon switching to a stimulating policy, the price of the two main cryptocurrencies fell sharply. Possible reasons include the sale of tokens by the German government and thedistribution of compensation to creditors due to the bankruptcy of Mt. Gox.

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.