What to Watch Across Markets This Week: July 22, 2024

What to Watch Across Markets This Week: July 22, 2024

• Cybersecurity firm CrowdStrike (CRWD) released faulty software update, impacting Microsoft Windows systems
• Joe Biden withdraws from the presidential race
• Earnings releases to watch for this week
• Fed’s favorite inflation gauge takes the spotlight
• Canada expected to cut interest rates for the second consecutive time
• G20 meetings set to take place in Rio de Janeiro, Brazil

Weekend Market Shocks

A Single Glitch Causes Global Impact

On Friday, July 19, 2024, cybersecurity firm CrowdStrike (CRWD) software update caused widespread disruption and a significant 11% drop in its stock price. The glitch led to grounded flights, interrupted 911 services, canceled hospital surgeries, and closed retailers around the globe. The problem, originating from an update to Microsoft Windows systems, highlighted the fragility of global tech infrastructure and demonstrated how a single software flaw can have immediate and extensive impacts on essential services and organizations.

Biden Drops Out

Joe Biden has shaken up the presidential race by dropping out, making him the first president in over 50 years to step down from running for reelection. At 81, he has endorsed Vice President Kamala Harris to take on Donald Trump in the upcoming election, which is less than four months away. Biden's decision, once unthinkable, became inevitable as Democrats lost confidence in his ability to defeat Trump. This unexpected move leaves the Democratic Party in a state of uncertainty, with no guarantee they will retain the White House in November. 

Upcoming Earning Releases This Week:

Stay tuned to our telegram channels to get the latest Earnings Releases. 

English Channel: https://t.me/cfimarketupdates

Arabic Channel: https://t.me/cfijgroup

What to Watch This Week

The U.S.

On Thursday, July 25, 2024, the Census Bureau will release the Durable Goods Orders report at 4:30 PM Dubai Time (GMT+4). The market anticipates an increase in orders, indicating a rise in purchases of durable goods. Historically, actual data has often exceeded expectations (Figure 1), which might suggest a similar outcome this time. If the report surpasses forecasts, it could lead to an appreciation of the U.S. Dollar following the announcement, as per analyst analysis.

Figure 1: March 26, 2024 – June 27, 2024, Forex Factory

On Friday, July 26, 2024, at 4:30 PM Dubai Time (GMT+4), the Core PCE Price Index, the Federal Reserve's preferred measure of inflation, will be released. The market expects a rise from the previous 0.1% to 0.2%. Despite this expected increase, the data suggests that inflation has been gradually easing since February 2024. If the report comes in at or below the anticipated 0.2%, this could boost the likelihood of a rate cut by the Fed in September.

Canada 

On Wednesday, July 24, 2024, the Bank of Canada will announce its Overnight Rate at 5:45 PM Dubai Time (GMT+4). The market expects a decline from the current rate of 4.75% to 4.50%, marking a 25-basis point cut. This anticipated reduction is driven by recent inflation data from June, which shows easing inflationary pressures. Factors contributing to this trend include slower rent increases and reduced consumer spending, which together help lower overall inflation.

G20 Meetings

The G20 meetings will be held in Rio de Janeiro, Brazil, from Thursday, July 25, 2024, to Friday, July 26, 2024. This summit will address key global economic issues, such as climate change, international taxation, and financial system reforms. It’s the final opportunity in 2024 for G20 Finance Ministers to reach a consensus on crucial reforms to restore trust and demonstrate strong collective action on climate finance. Their decisions will play a significant role in shaping the discussions at the upcoming COP29 climate talks.