UK unemployment rate increases, while average hourly wages remain high

author: FutureCar Staff    

US equity markets experienced a rise on Monday, with tech stocks leading the way. One notable increase was seen in Tesla shares, which rose by 10% after being upgraded by Morgan Stanley from "equal-weight" to "overweight". The investment bank believes that Tesla's Dojo supercomputer has the potential to increase the company's market value by nearly $600 billion.

Meanwhile, the Asia Pacific (APAC) region saw a mixed session overnight. In Australia, consumer sentiment continued to decline in September. The Westpac-Melbourne Institute index of consumer sentiment dropped by 1.5% from August to 79.7, indicating that pessimists outnumbered optimists.

The Westpac-Melbourne Institute index has remained below the neutral 100 mark since March 2022. On a positive note, NAB business confidence increased by 1 point to 2. The survey also revealed that business conditions rose to +13 in August from an upwardly revised +11 in July. Additionally, there has been a strong demand for labor, with a slight easing in labor costs from 3.7% to 3.2% in the past three months.

In the UK, the unemployment rate rose as expected to 4.3% in July. Average hourly earnings excluding bonuses remained unchanged at 7.8% from the previous month's data.

Bank of England policymaker Catherine Mann recently stated that it is premature for the BoE to halt its interest rate hikes. Mann expressed a preference for over-tightening and stated that if inflation decelerates more quickly or activity deteriorates significantly, she would not hesitate to cut rates. This stance contrasts with the words of Andrew Bailey, the Governor of the Bank of England, who stated last week that the central bank is nearing the end of its interest rate increases. The BoE's next rate decision is scheduled to be announced on Sept. 22, with an 80% chance of a rate increase to 5.5% from 5.25% according to market expectations.

In Germany, ZEW economic sentiment is anticipated to decrease to -15 in September from -12.3 in August. Oracle shares initially reached a record high after earnings were announced, but later closed down 8.9% due to the software giant's projection of current-quarter revenue falling below Wall Street forecasts. Earnings per share, excluding items, came in at $1.19, surpassing estimates of $1.15. First-quarter revenue totaled $12.50 billion.

Oracle has forecasted second-quarter revenue growth between 5% and 7%, which is lower than the average estimate of 8.2% by analysts. Despite facing challenges in the current economic environment, particularly from larger competitors like Amazon Web Services and Microsoft, Oracle's cloud infrastructure business is being boosted by the development of AI applications. Larry Ellison, the company's founder, highlighted that several development companies have signed contracts worth over $4 billion to purchase capacity in Oracle's Gen2 Cloud, a figure that has doubled in the last three months.

Finally, Apple is set to unveil its next generation of iPhones tonight. While no major technological breakthroughs are expected, improvements in chips, batteries, and cameras are anticipated. Additionally, Apple is rumored to announce a shift to the USB-C cable standard for charging its iPhone 15 models, a standard already used in Mac computers and some iPad models. The question remains whether these updates will be enough to boost sales and reverse the slowdown experienced in the past three quarters.

FutureCar Staff