• Wall Street closed lower on July 18, as the DJIA slipped by -1.29%, the S&P 500 dropped by -0.78% and the Nasdaq closed down by -0.70%.
• Stock indexes fell Thursday, with the S&P 500 and Nasdaq hitting 2-week and 3-week lows, respectively, due to declines in mega-cap tech stocks and money-center banks. Despite an early boost from chip stocks following TSMC's strong Q2 results and raised 2024 revenue forecasts, the market reversed gains.
• The 10-yr UST yields surged by +4.0 bps to 4.20%, while the 2-yr yields rose by +4.0 bps to 4.46%. While the upcoming USD213 billion Treasury auction put pressure on T-notes, losses on Thursday were restrained by higher-than-expected US weekly unemployment claims, indicating labor market weakness and dovish Fed policy.
• US weekly initial unemployment claims climbed by 20,000 to 243,000, surpassing the expected 229,000 and signaling a weaker labor market. Continuing claims also rose by 20,000 to a 2.5-year high of 1.867 million, above the forecast of 1.856 million, further reflecting labor market weakness.
• The European Central Bank (ECB) announced its decision to maintain the main refinancing rate at 4.25% as widely anticipated. The ECB emphasized its commitment to keeping borrowing costs restrictive until inflation returns to its target level of 2%.
• In Asia, the annual inflation rate in Japan stayed at 2.8% YoY in June 2024, the highest since February. Core inflation rose to 2.6% YoY, its highest in three months, bolstering expectations of a possible central bank rate hike
• Global bond yields were mixed on Thursday: the 10-yr German bund yield rose by +1.1 bps to 2.43%, the 10-yr UK gilt yield slid by -1.2 bps to 4.06%, and the Japanese 10-yr JGB yield closed up by +1.2 bps to 1.04%.
