Top 5 Things to Know in the Market on Monday

Top Five Financial Market Insights for Monday, August 1

1. Global Stocks Reach 11-Month Highs
   Global stock markets opened at 11-month highs on Monday, bolstered by signals that major central banks may increase stimulus measures or remain cautious about tightening in the near future. U.S. equity futures indicated a positive start, following disappointing growth data that reduced expectations for an early interest rate hike by the Federal Reserve. Additionally, investors evaluated results from the European Banking Authority in early trading.

2. U.S. Dollar Bounces Back from Recent Lows
   The U.S. dollar experienced a slight recovery on Monday after reaching five-week lows the previous Friday due to disappointing economic growth figures. The dollar index, which measures the currency against a basket of six others, rose 0.15% to 95.67 in early trading, moving up from Friday’s low of 95.34—the lowest point since late June. An official at an international central bankers conference mentioned the potential for rate hikes before the upcoming November U.S. elections if economic conditions and the labor market improve.

3. U.K. Manufacturing Activity Hits Three-Year Low
   The manufacturing sector in the U.K. contracted at an accelerated pace, with new orders reflecting their steepest monthly decline in 18 years. The recent manufacturing purchasing managers’ index fell from an initial reading of 49.1 to 52.4 in June. This disappointing performance adds pressure on the Bank of England to act and potentially cut interest rates in their upcoming meeting.

4. Diverging PMI Results in China for July
   China’s manufacturing sector presented mixed signals in July, as the official gauge unexpectedly fell into contraction, while another survey indicated expansion for the first time in 17 months. The official manufacturing purchasing managers’ index dropped from 50.0 the previous month, marking the first contraction in five months. In contrast, the Caixin manufacturing purchasing managers’ index showed expansion among small to medium-sized enterprises.

5. Oil Prices Remain Near April Lows Amid Supply Concerns
   Oil prices declined on Monday, weighed down by increasing production levels in the U.S. and rising output from OPEC members. Prices fell by 55 cents, or 1.32%, to $41.05 a barrel, while another benchmark dropped 62 cents, or 1.42%, to $42.91 a barrel. Concerns about oversupply continue to pressure the market.