Weekly News Recap 30 July – 2 August 2024

News for 30 July 2024

Gold Pressured by Strengthening Dollar

On July 29th, the price of gold weakened, closing at $2,384/oz. This decline was due to the market awaiting the results of the FOMC meeting at the end of the week, following the higher-than-expected 2Q24 GDP of the U.S., which came in at 2.8%. This may delay interest rate cuts.

On July 30th at 21:00, the U.S. will announce the consumer confidence index and job openings, with forecasts of 99.7 and 8.02M, respectively.

McDonald’s Stock Rises 3.7% Despite Global Sales Drop

McDonald’s shares increased by 3.7% despite reporting its first global sales decline in 13 quarters. The decrease was attributed to consumers seeking value deals and avoiding higher-priced menu items, including the Big Mac.

News for 31 July 2024

BOJ Raises Interest Rates

The Bank of Japan (BOJ) has raised interest rates to 0.25%, which is expected to continue putting pressure on the Japanese economy. However, the USD/JPY pair has decreased from 152.78 to 152.61, approaching a key support level. There is a potential for the yen to strengthen further, which could push the USD/JPY below this critical support level.

News for 1 August 2024

Gold Rebounds on Fed Rate Cut Speculation

On July 31st, gold prices rose, closing at $2,447/oz, as the market speculated that the Federal Reserve might lower interest rates in September. However, the Fed has indicated it will wait for inflation to moderate to the 2% target. The market’s easing sentiment has supported gold prices.

On August 1st, at 19:30, the U.S. will announce weekly jobless claims, with a forecast of 236k. Later, at 21:00, the U.S. Manufacturing Purchasing Managers’ Index (PMI) will be released, with a forecast of 48.8.

META Reports Strong 2Q24 Earnings Amid User Growth and Increased Ad Revenue

META announced robust 2Q24 earnings, with revenue reaching $39 billion, up 22% YoY and 7% QoQ. Net profit surged to $13.5 billion, marking a 73% YoY and 10% QoQ increase. This growth was driven by a rise in daily active users to 3.27 billion, a 7% YoY increase, which aligned with a 10% YoY boost in advertising revenue. Costs increased to $24.2 billion, up 7% YoY, but at a slower rate than revenue growth, leading to an improved gross margin of 38% compared to 29% in 2Q23. The effective tax rate dropped to 11% from 16% last year, contributing to a higher net profit margin of 35% from 24%.

Management forecasts 3Q24 revenue between $38.5 billion and $41 billion, supported by an expected increase in active accounts and a lower effective tax rate. Despite the stock’s 37% YTD rise, which puts it at a P/E ratio of 27, adjusting for the latest EPS brings the P/E ratio to 24. The 2024 target price is $520, suggesting a 10% upside.

News for 2 August 2024

Gold Remains in Narrow Range Awaiting Non-Farm Data Tonight

On August 1st, gold prices fluctuated within a narrow range, closing at $2,446/oz. The market is awaiting the U.S. labor data announcement tonight, as it could impact future monetary policy decisions.

On August 2nd at 19:30, the U.S. will release labor market data, including Non-Farm Payrolls and the unemployment rate, with forecasts of 176k and 4.1%, respectively.

GBP/USD Weakens After BOE Rate Cut

On August 1st, the Bank of England (BOE) met and decided to cut interest rates by 0.25%, lowering them from 5.25% to 5.00%. This led to a depreciation of the British pound against the dollar. Meanwhile, the dollar has begun to rebound, testing the current resistance level at 104.35.

Apple Reports Revenue and Profit Growth – Driven by Strong iPad and MacBook Sales

Apple announced its 3Q24 earnings (for the period ending June 30, 2024), with revenue rising to $85.8 billion, a 5% YoY increase but a 5% QoQ decrease, surpassing the forecast of $84.4 billion. Earnings per share (EPS) grew to $1.40, up 11% YoY but down 8% QoQ, exceeding the expected $1.34. The growth was fueled by strong sales in the Americas and Europe, with revenue reaching $37.7 billion (+7% YoY) and $21.9 billion (+8% YoY), respectively. Notably, sales of iPads surged to $7.16 billion (+24% YoY) and MacBooks to $7.01 billion (+3% YoY). The gross margin improved from 44.5% in 3Q23 to 46.2%, driven by a decrease in unit material costs.