Worldwide economic markets increase due to lower recession worries

(MENAFN) Global financial markets are experiencing a positive shift, driven by recent US economic data that indicated a reduction in inflationary pressures and stronger-than-expected retail sales. This trend has alleviated some of the recession concerns that have been prevalent in recent months.

In July, US retail sales increased by 1 percent, surpassing expectations and marking the highest monthly gain since January 2023. This robust performance has eased fears of a potential recession and signals strong consumer spending. Additionally, the US job market demonstrated resilience with weekly jobless claims dropping to 227,000, the lowest since early July, and falling below forecasts. However, US industrial production fell by 0.6 percent month-over-month in July, a decline slightly more significant than anticipated.

Federal Reserve officials have noted that while inflation is approaching the 2 percent target, rising unemployment might prompt the Fed to consider rate cuts before the fourth quarter. Analysts are now suggesting that the Fed is more likely to reduce rates by 25 basis points in September, as opposed to a more substantial cut of 50 basis points, based on the latest economic data.

The US 10-Year bond yield ended its four-day decline, stabilizing at 3.93 percent as recession fears abated. The US Dollar Index stands at 102.9. In commodities, gold prices rose by 0.1 percent to USD2,453 on Friday, following a 0.3 percent increase on Thursday. Brent crude oil prices are trading around USD80.2 per barrel, reflecting a 0.3 percent decrease from the previous close. In equity markets, the Dow Jones Index climbed 1.39 percent, the S&P 500 gained 1.61 percent, and the Nasdaq surged by 2.32 percent on Thursday, with index futures showing further gains on Friday.

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