Markets tumbled last week on a raft of worry about the global economy. Bad news is bad news and good news isn't bad news. 

After our call on Nvidia being too big to fail last week, it got crushed this week

• Nvidia biggest ever drop for any stock ever - 279bln USD shareholder value wiped out in 1 day

• DoJ subpoena Nvidia, leaked early spooked markets

• Semi-conductors and stocks globally followed suit.

This week also brought us

• A clear deterioration in the US jobs market
• A big jump in Canadian unemployment
• A third rate cut in a row by the Bank of Canada
• Volkswagen  talking about closing manufacturing plants in Germany
• UK Govt embarrassing financial incompetence
• Collapse in the price of iron ore
• US yield curve uninverted
• YEN carry trade still in play

Crashes are never about one event. They're a confluence of events and market positioning.

There are lots of those dark clouds on the horizon.

Breaking

AfD’s success in German elections piles pressure on a fragmented EU[The Guardian]

In Focus
China

More support for property via cheaper bank lending to add to the plethora of stimulus already released.

Macro is not looking at all good with population decrease now a big focus.

China's population drops for second year, with record low birth rate[Reuters]

Japan

Ueda Reiterates That BOJ Will Lift Rates If Outlook Realized[Bloomberg]

Then of course the Nikkei 225 craters 5% on Tuesday

Nikkei 225 Daily

Japan Household Spending July 2024

US Economy

The founder of the market's most famous recession indicator says the Fed overdid it with rate hikes and a downturn is still coming [Business Insider]

US JOLTS July 2024

A big drop in JOLTS and an anaemic ADP reading set the tone mid week

ADP Nonfarm Employment August 2024

US Nonfarm Payroll August 2024

Nonfarm payroll was weak but not a distaster, but yet more downgrades reminded us the numbers aren't to be trusted anyway.

Stock markets had a very bad week with Nvidia recording the biggest ever daily market cap devalution.

Nvidia Daily

In The Background

CRE / Banks / CLOs

How a Recent Major CRE Bond Failure Happened[Globe St]

Bonds backed by commercial mortgages are a 'disaster' as real estate values crumble, hedge funder says[Business Insider]

Bitcoin / US Election

Mastercard Launches Euro Denominated Non-Custodial Bitcoin Debit Card[Nasdaq]

Qatar Financial Centre Issues QFC Digital Assets Framework 2024 [Qatar Financial Centre] 

Canada

Canadian PM Trudeau weakened after key ally withdraws automatic support 

Canada Unemployment August 2024

England

Risking a Liz Truss moment, the UK government thrashes around in the mire.

Reeves plans to ‘fiddle’ fiscal rules to boost borrowing, claim Tories [FT]

Rachel Reeves faces Whitehall revolt over spending cuts[FT]

Europe

VW Weighs First-Ever Germany Plant Closures to Cut Costs[Bloomberg]

How low can Germany go? Well a lot lower if the rumours about the solvency of Volkswagen are true.

Volkswagen warns time running out as it clashes with workers over cuts [Reuters]

Australia

Treasurer turns on RBA, says rates strategy ‘smashing’ economy. 

Labor is leaning into an assault on the 'barbarians' at the bank. It may be great politics, but the economics are trickier[ABC]

Record government spending prolonging RBA’s inflation fight[AFR]

The political bickering continues as everyone ignores the price collapse of iron ore. A decline to $50, the low from 2016, would have a significant impact on budget, unemployment and consumer confidence.

Australia Building Approvals July 2024

Australia GDP Q2 2024

Iron Ore Daily

What's Next ?

US CPI and PPI the big news next week.

And the ECB rate decision on Thursday. 

This Week's Important Economic Indicators [London time]