Commentary
US stocks saw significant gains last week, recovering from a sell-off in week before. In regional terms, Japan and the US were the best performers. In the US, growth stocks generally outperformed their value counterparts. The major reason underlying last week’s rally was positive economic data that fueled hopes for a soft landing. The tech-heavy Nasdaq 100 led the charge with 5.4% weekly rise. Notably, NVIDIA stock rebounded and delivered an 18.9% weekly gain. Consumer discretionary stocks also performed well, with Starbucks jumping 26.3% during the week.
US economic data further improved investor sentiment. The Commerce Department reported that retail sales jumped 1.0% in July, the largest increase in 18 months. The gains were broad-based, signaling strong consumer spending despite a slowing labor market.
Inflation data also provided some relief. The Labor Department reported that core producer prices (PPI) were mostly flat in July, rising by a mere 0.1% month-over-month. Meanwhile, headline CPI came in less than forecasts at 2.9%, a figure below 3% for the first time since April 2021.
