TRG Fast Facts
By TRG Advisors on August 1, 2024
Weekly data-driven insights on the markets and economy
1. Markets (Mostly) Back on the Decline
Markets have been lackluster in the waning days of July. The S&P fell .5%, the Dow up .14% and Nasdaq fell into negative territory at -1.04% midday on Tuesday. Following last week’s tech selloff due to weak Alphabet and Tesla earnings, all eyes will be on Microsoft, Apple, Amazon, Meta and their associated AI initiatives. AI chipmaker AMD is set to kick off the week’s tech earnings after Tuesday’s close.[i]
2. Delta Strikes Back
Delta’s challenging week, with videos of stranded passengers wall to wall at its US hubs of Atlanta and Detroit, has the company reaching out to prominent attorney David Boies to pursue potential damages. Delta’s damage estimates from the faulty Crowdstrike update are expected to be $350 to $500 million. For its part, Crowdstrike’ stock lost nearly 25% of its value in the two trading days following the massive outages as concerns ramped up about the company’s business after the incident.[ii]
3. GDP Surprises Expectations
Consumer spending led the way to a surprise in the GDP number for the April-through-June period at a 2.8% annualized pace. Analysts had been looking for growth of 2.1%. Private inventory investment and nonresidential fixed investment also led to the higher number. Some cracks in the consumer also showed up in the data; the personal savings rate continued to decelerate, and the Philadelphia Federal Reserve showed credit card balances at an all-time high going back to 2012.[iii]
4. Crude Eases on China’s Woes
Increasing tensions in the Middle East are being overshadowed by China’s sluggish economy leading to the lowest level of crude imports since early June. China’s falling imports of crude oil pushed crude prices down 2%, below the $76 per barrel mark, seemingly unfazed by the Israel-Hezbollah escalation.[iv]
5. Going For the Gold (And Cash, Cars, Etc.)
Out of the 206 countries and territories competing for Gold/Silver/Bronze in the Paris Olympics, 33 have confirmed they’ll award athletes for winning such medals. Medal winners for the US stand to receive $37,500 for gold, $22,500 for silver, and $15,000 for bronze. Malaysia grants a lifetime pension to all medal winners, but those who earn gold also get a foreign car. Kazakhstan awards housing – the higher the medal, the bigger the apartment.[v]
[i] Ferré, Ines and Friar, Karen, “Stock Market news today: Nasdaq sinks, Nvidia drops 5% ahead of next round of Big Tech earnings,” Yahoo!Finance, July 30, 2024, https://finance.yahoo.com/news/stock-market-news-today-nasdaq-sinks-nvidia-drops-5-ahead-of-next-round-of-big-tech-earnings-141615307.html. Accessed July 30, 2024.
[ii] Levy, Ari and Novet, Jordan, “Delta hires David Boies to seek damages from CrowdStrike, Microsoft after outage,” CNBC, July 29, 2024, https://www.cnbc.com/2024/07/29/delta-hires-david-boies-to-seek-damages-from-crowdstrike-microsoft-.html. Accessed July 30, 2024.
[iii] Cox, Jeff, “U.S. economy grew at 2.8% pace in the second quarter, much faster than expected,” NBC NEWS, July 25, 2024, https://www.nbcnews.com/business/economy/us-economy-gdp-q2-2024-faster-than-expected-rcna163606. Accessed July 30, 2024.
[iv] Kimball, Spencer, “U.S. crude oil falls below $76 per barrel, lowest level since early June,” CNBC, July 30, 2024, https://www.cnbc.com/2024/07/30/us-crude-oil-falls-below-76-per-barrel-lowest-level-since-early-june.html. Accessed July 30, 2024.
[v] Harries, Kristen, “Here’s How Much Money Olympic Medalists Get When They Win Gold, Silver, or Bronze,” BuzzFeed, July 29, 2024, https://www.buzzfeed.com/kristenharris1/how-much-money-olympic-medalists-win-paris-2024. Access July 30, 2024.