World Street | US markets shine, Goldman Sachs trims recession fears, oil cools and more

World Street offers sneak peak into top global news

Here’s a quick roundup of the latest global happenings: US markets continued their winning streak for a third day, sparking gains in Asian markets. Meanwhile, oil prices cooled off thanks to soft demand trends. Dive into the August 20 World Street edition for the full details!

US markets shine; all eyes on Jackson Hole

The S&P 500 climbed nearly 1 percent, while the Nasdaq rose by 1.4 percent, marking their eighth consecutive positive session—something the S&P 500 hasn’t seen since November 2023. For the Nasdaq, it was the longest winning streak since December 2023. Strong retail sales data and last week's mild inflation report have eased economic concerns for investors. This week, all eyes are on the Federal Reserve's annual Jackson Hole Economic Symposium, where Chair Jerome Powell is set to speak on August 23. Wall Street is eager for clues about what to expect at the Fed’s September meeting.

Asian markets strengthen

Asia-Pacific markets surged on Tuesday, following Wall Street's rally and buoyed by the release of key economic data from China. China's loan prime rates were maintained at 3.3 percent for the one-year LPR and 3.8 percent for the five-year LPR. Japan's Nikkei 225 rose by 1.6 percent, with the broader Topix index gaining 0.9 percent. In South Korea, the Kospi increased by 0.7 percent, and the small-cap Kosdaq advanced 0.9 percent. Meanwhile, Australia's S&P/ASX 200 edged up 0.2 percent ahead of the Reserve Bank of Australia's announcement.

Recession worries dials down

Goldman Sachs has reduced its probability forecast for a US recession to 20 percent, just after a recent increase, following new labor market data that prompted a reassessment of economic outlooks. The firm indicated that a strong jobs report on September 6 could likely lead them to lower the recession probability back to 15 percent, a level it had maintained for nearly a year before August.

Brent below $80

US crude oil futures dropped nearly 3 percent overnight, closing below $75 per barrel. This decline came as the US pushed for a cease-fire in Gaza and concerns over weakening demand weighed on the market. The West Texas Intermediate (WTI) September contract fell by 2.97 percent, to $74.37 per barrel, while the Brent October contract decreased by 2.54 percent, to $77.66 per barrel.

China-Vietnam deal

China and Vietnam signed 14 agreements, covering areas from cross-border railways to crocodile exports, following a meeting between Chinese President Xi Jinping and Vietnam's new leader, To Lam, in Beijing. During the talks, Lam requested soft loans and technology from China to support Vietnam's transport infrastructure development. The two leaders also agreed to strengthen defense and security ties and enhance connectivity through railways and highways between the two nations. Additionally, Xi pledged to increase imports of Vietnamese agricultural products.

US-China agreement

Last week, the US and China signed agreements to cooperate on financial stability. The agreements were finalized during a meeting of the US-China Financial Working Group in Shanghai on August 15-16. As part of the discussions, both sides also exchanged a list of contacts to be used in the event of financial stress or risk events.

Disclosure penalty

The US Securities and Exchange Commission (SEC) announced that it has fined billionaire activist investor Carl Icahn and his company $2 million. The fine settles allegations that Icahn failed to disclose billions of dollars in personal margin loans that were pledged against the value of his Icahn Enterprises stock.

Layoffs ramp up

General Motors is laying off over 1,000 salaried employees worldwide in its software and services division, following a review aimed at streamlining operations, according to reports. The layoffs include around 600 positions at the company's tech campus near Detroit. These cuts come less than six months after leadership changes in the division, including the departure of former Apple executive Mike Abbott, who left the company in March after less than a year due to health reasons.

(with inputs from Reuters and other agencies)