ECONOMIC SURGE
According to the initial estimate released by the Bureau of Economic Analysis, the U.S. economy demonstrated stronger-than-expected growth in the second quarter, with real gross domestic product rising at an annual rate of 2.8%. This growth surpassed economists’ projections of 1.9% and marked a significant improvement from the 1.4% growth seen in the previous quarter. The positive performance was driven by increased consumer spending in both goods and services, as well as rises in private inventory and nonresidential investments. Sectors such as healthcare, housing, utilities, and recreation experienced growth in service spending, while spending on goods saw an uptick in categories like auto parts, recreational equipment, household furnishings, and gas.
SLIGHT RISE
Based on the latest report from the U.S. Department of Labor, there was an uptick in the number of U.S. citizens filing for unemployment insurance benefits in the week ending July 20. The increase of 235,000 applications was slightly below initial estimates but lower than the previous weekly gain, while the insured unemployment rate stood at 1.2%, with a 4-week moving average of 235,500. Furthermore, continuing claims decreased by 9,000 to 1.851 million in the week ended July 13, which could be a positive sign for those already receiving benefits. Overall, the latest data suggests a slight volatility in the job market and economic landscape, with mixed indicators on the stability of employment and the potential impacts on individuals relying on unemployment benefits.
RESURGENCE
The digital currencies tied to the value of assets like the U.S. dollar, also known as stablecoins, are seeing a revival in market value after being stagnant for a while. Stablecoins provide a safe way to invest in cryptocurrencies and help reduce the risk of big price swings, and with the rise of their market capitalization, it suggests that more money is flowing into the cryptocurrency market, showing that investors are feeling more positive about it. The total value of stablecoins has now reached over $164 billion, with many different types available for use, and while some major cryptocurrencies have recently dropped in value, the increasing popularity of stablecoins is likely to keep driving growth and innovation in the cryptocurrency market.
GLITTERING PERFORMANCE
Newmont Corporation celebrated impressive second-quarter results, surpassing Wall Street predictions with their robust production and higher gold prices. The average price of gold rose to $2,347 per ounce compared to $1,965 in the previous year, and Newmont has gone hand in hand with this rise as its production rose from 1.24 million ounces to 1.61 million ounces, beating analyst expectations. Production costs rose to $1,562 per ounce, nevertheless, Newmont still managed to exceed analyst profit estimates. Moreover, the company’s decision to divest its deferred payment rights related to the Batu Hijau mine in Indonesia for $153 million helped in enhancing its financial performance. Furthermore, looking ahead, Newmont’s performance is expected to continue benefiting from the upward trajectory of gold prices, with a total estimated production of 6.9 million ounces of gold for the year.
PROFIT CHALLENGES
Stellantis and Ford Motor faced setbacks in their earnings reports as Stellantis saw a 48% decrease in net profit during the first half of the year, attributing it to reduced volumes and production gaps, while Ford posted lower-than-expected second-quarter earnings due to warranty costs, disappointing analysts. American Airlines shares also dropped over 5% after revising their profit forecast downwards, and they now expect to earn adjusted earnings per share of 70 cents to $1.30, far below previous estimates. The airline blames a failed sales strategy and an oversupply of flights for the reduction in unit revenue. Furthermore, Southwest Airlines also reported a 46% profit decline in the second quarter, despite an increase in revenue.
