US economic data: Economy crashes, stock market reaches new all-time highs - Important stock market data in July

Chart of the week

The chart shows when which companies in the USA publish their earnings results. Other important companies that are not shown in the chart above are Google and Microsoft 7/23/2024, Apple 8/1/2024, NVIDIA 8/23/2024.
Read more in our other market analysis on Tesla and NVIDIA stocks.
Why this is important
At the same time as the quarterly earnings are published, the CEO usually holds a press conference to discuss the outlook for the coming quarters. Shares often react very strongly to the figures or the statements made at these press conferences. Movements of 10% up or down are not uncommon. If you own these shares, you should definitely follow the press on these days.
Read more in our other market analysis on the earnings season for the second quarter of 2024.
One of the most important days for the stock market will be July 23. On the same day, Tesla, Google and Microsoft will announce their results.
July 17 is also important for investors. This is when the US Federal Reserve holds its last meeting before the summer vacation. There is currently a 95% probability that key interest rates will not be changed.

The chart from the National Association of Active Investment Managers shows the level of investment. Most active managers are already more heavily invested than ever before. There is therefore a risk that they will take profits and sell when good earnings figures are published and also sell when the figures are bad.

They no longer have any extra money for additional purchases.

The US economy crashes and the stock market rises to new all-time highs
Last week, various economic figures were published in the USA, all of which were significantly worse than expected:

- Services Purchasing Managers' Index:
Still at 53 in May, now at 49. A value below 50 signals a shrinking economy. In recent months, the Industrial Purchasing Managers' Index has been below 50 and the good performance of the service sector has prevented a recession. Now the service sector is also falling into recession.
- Business Activity / Production:
Still at 63 in May, now at 49 in June. Production in the industrial sector has plummeted.
- New Orders Index:
In May still at 54, now at 46. Orders are also collapsing.
- All 4 indicators turned negative in June after a long upward trend.Backlog of orders (order book):
In May still at 51, now at 44. Although production is falling, the order book is also declining.

The Surprise Index also shows whether the published economic data surprised positively or negatively.

US economic data is performing worse than ever before! The Bloomberg Eco Surprise Index shows that the data is falling well short of expectations - a trend that has not been seen for over a decade.
Normally, the stock market should plummet after so much negative news. However, the exact opposite is happening and the US stock markets are rising to new all-time highs.

This is due to the fact that inflation is also falling sharply at the same time.

The chart shows the US Truflation Rate. Truflation is a new financial data service that provides real-time economic and inflation data using blockchain technology. This platform was developed to provide more accurate and transparent inflation data compared to traditional methods such as the Consumer Price Index (CPI). The data is updated daily rather than monthly like the official CPI.
The sharp fall in inflation is fueling hopes that the US Federal Reserve will cut interest rates sooner than expected. That is enough to put the stock markets in a party mood. Whether this hope will be realized remains to be seen. There is a risk that corporate profits will fall more sharply than companies will benefit from falling interest rates.

The chart shows the change in full-time jobs in the USA. The unemployment rate has fallen slightly recently, but this was due to a large number of new part-time jobs being created. When companies are no longer loyal to the economy, they only create part-time jobs and no longer want to make long-term commitments.

It would be the first time in six decades that so many full-time jobs have been lost that are not linked to a recession.

Therefore, one should not trust the new all-time highs and rather be cautiously invested. It should also be worth keeping a high proportion of cash in order to buy more cheaply.