Weekly Market Update - 8 August 2022

Pressure Easing

US inflation decelerated in July by more than expected, reflecting lower energy prices, which may take some pressure off the Federal Reserve to continue aggressively hiking interest rates. The consumer price index increased 8.5% from a year earlier. A decline in gasoline offset increases in food and shelter costs. Two Federal Reserve officials said the softening inflation data does not change the US central bank’s path toward even higher interest rates. Meanwhile in China inflation accelerated to the highest level in two years, largely driven by food prices. The People’s Bank of China said consumer inflation will likely exceed 3% in some months during the second half of the year, but pledged to safeguard the economy.

Source: Bloomberg

Disney Hike

Disney is raising the price of its flagship Disney+ streaming service by 38% the US, in a bid to generate more revenue for its money-losing online businesses. The company also plans to introduce an ad-supported version of the flagship streaming service. The price hikes, subscriber gains — the company added 14.4 million new Disney+ subscribers in the last quarter, beating analysts’ estimates of 9.8 million — and a strong performance from its theme parks may help reverse investor sentiment that sent the shares down 27% this year.

Source: Bloomberg

Testing Firepower

Taiwan reiterated it won’t succumb to pressure from China after days of military drills in the air and seas surrounding the island, sparked by Nancy Pelosi’s visit. The People’s Liberation Army said it conducted exercises around Taiwan on Sunday, with drills focused on testing the capabilities of joint firepower on long-range air and ground strikes. Taiwan said the drills simulated attacks on its main island and Taiwanese ships. China is engaging in increasingly destabilizing action, US Secretary of State Antony Blinken said, adding that he’d told his Chinese counterpart Wang Yi that lines of communications between the two sides must be kept open.

Source: Bloomberg