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Weekly Market Recap: July 8, 2024

Posted July 8, 2024 at 9:45 am
J.P. Morgan Asset Management

The week in review

  • Job openings increased to 8.1M in May
  • 206K jobs were added in June
  • Wages grew 0.3% m/m (3.9% y/y) in June

The week ahead

  • CPI
  • PPI
  • Consumer sentiment

Thought of the Week

Summer travel is more than just sightseeing; it’s a critical economic driver for many countries. The European Commission estimates that tourism makes up to 10% of the EU’s annual GDP and as much as 25% for some individual countries as this week’s chart illustrates. With the UN predicting that 2024 will be the biggest year for international travel to Europe since 2019, there is good reason to believe that tourism, along with other factors, could boost the EU economy.

Travel spending falls under the consumption bucket of GDP. Private consumption growth in the eurozone peaked at a booming 6.7% y/y in 2Q21, but, as rising energy costs squeezed consumers, it fell sharply in 2022. However, with energy woes subsiding, real wages rising and travel activity recovering, consumption could be poised for a comeback. This would allow the more services-oriented economies in Southern Europe to sustain their stronger contributions to GDP. Additionally, all EU countries, but especially those in Southern Europe, are set to benefit from the almost 300 billion euros the Recovery Fund plans to deploy over the next three years. Moreover, the larger economies, like Germany, are slowly recovering as evidenced by stabilizing PMIs and industrial confidence. However, long-term challenges such as the aging population still pose risks to growth.

Consensus forecasts show the EU accelerating while other developed economies slow down over the next two years. Although investors have long worried about the EU’s sluggish economy, a mix of foreign and domestic factors seems to be shifting in its favor.

Chart of the Week: World Travel & Tourism Council, J.P. Morgan Asset
Management.

Thought of the week: World Travel & Tourism Council, J.P. Morgan
Asset Management.

Originally Posted July 8, 2024 – Weekly Market Recap

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Past performance does not guarantee future results.

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

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