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If inflation calms down, investors will regain their confidence

Recent economic data has eased recession fears that began to emerge in early August, reducing the likelihood of major interest rate cuts by the Federal Reserve and increasing investor confidence in risky assets.

The S&P 500 and Nasdaq 100 indices had their strongest week since late October 2023 through Friday afternoon, driven by encouraging economic data throughout the week.

Inflation continues to slow. In July, the consumer price index rose 2.9% year-on-year – the slowest pace since March 2021 and below both the previous month's rate and the 3% expected. Core inflation, which excludes food and energy prices, fell to 3.2% from 3.3%, in line with analysts' expectations.

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Initial jobless claims rose less than expected for the second week in a row, suggesting that the July increase in unemployment was a temporary phenomenon rather than a sign of a general slowdown in the labor market trend.

In addition, retail sales rose 1% in July, the strongest monthly growth since January 2023 and significantly exceeding expectations. Consumer confidence also exceeded forecasts in August, further strengthening the economic outlook.

Starbucks vs Chipotle

Chipotle lost $7 billion in market value, while Starbucks gained $15 billion after CEO Brian Niccol moved from Chipotle to Starbucks. The contrasting market reactions underscore investors' confidence in leadership changes that impact company performance.

Harris leads in new poll

A new poll from Emerson College shows Kamala Harris leading Donald Trump by 4 percentage points in the 2024 presidential race, with strong support from younger, older and independent voters. Harris is viewed favorably by 51% of voters, compared to just 45% of Trump.

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Walmart's profit increase

Walmart's second-quarter profit beat expectations. The 4.8% increase in sales was driven by growth in e-commerce and advertising. The company raised its full-year forecast on strong performance in the U.S. and international markets.

Burry's China bet

Big short investor Michael Burry has significantly increased his holdings in Chinese companies, with Alibaba being his largest holding. His hedge fund Scion Asset Management also holds significant positions in JD.com and Baidu, suggesting he is betting big on the potential of the Chinese technology market.

Benzinga is a financial news and data company headquartered in Detroit.

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