Markets recovered and began to slow down, gold record, corporate and financial news
Market Reviews
• Markets' rapid recovery from the early August sell-off hit a hole: Asian stocks fell on Wednesday and a slight drop on Tuesday left the S&P 500 one day shy of matching its 20-year winning streak. The US stock market paused its rally, having reached its first significant goals. There will be an NVDA report in a week and the reaction to it could provide the next powerful impetus for the entire market. Small capitalization and oil stocks traded weakest yesterday. The dollar has fallen in price again. There are rumors that hedge funds have started using USD to fund their operations, switching from the yen. That is, they are betting on a long-term decline in the dollar exchange rate.
• The yen traded at 145.5 to the US dollar as growing souring sentiment in Japanese stock markets and news that Walmart plans to sell its stake in JD-com sent the Chinese online retailer's shares tumbling on the Hong Kong Stock Exchange after a big jump. on the back of an upbeat earnings report. Market momentum has more or less slowed since selling began two weeks ago, bringing us back full circle to the economic outlook: waiting for data to gauge recession risk and watching polls to gauge the outcome of the US presidential race.
• Fed minutes will be released later on Wednesday, along with a revision of US labor data. Goldman Sachs expects a downward revision of between 600,000 and 1 million jobs, although it says this overstates labor market weakness. Much will also depend on the US labor report due on September 6, as the labor market is now the focus of increasing attention as inflation appears to be trending downward.
• Rate markets have fully priced in a 25 basis point US interest rate cut in September and a close to 1/3 chance of a 50 basis point cut, sending the dollar steadily lower across virtually every metric.
• Some analysts see risks if the labor market is stronger than expected or if Fed Chairman Jerome Powell shows little resolve in his speech due in Jackson Hole on Friday.
• The CNN Fear and Greed Index, based on conditions in the equity, options and credit markets, has recovered to neutral levels from “extreme fear” just a week ago. But investors appear to want new data to confirm the favorable outlook before diving in again.
• Asia data on Wednesday showed Japanese exports lagged expectations, while South Korean exports rose 18.5% in the first 20 days of August from a year earlier.
• The price of a standard gold bar exceeded one million US dollars for the first time in history. The spot price of one troy ounce of gold (31.1 grams) for the first time in history exceeded $2,500 on August 16, and at the auction on August 19 it strengthened above it. Thus, a standard 400-ounce gold bar became worth more than a million dollars.
• Trump Media's stock price has hit an all-time low since it went public. Since mid-July, the securities have lost almost half of their value. Donald Trump is a month away from turning his paper social media fortune into cold, hard cash. The question is, can he?
• Authors sue Anthropic for copyright infringement in AI training - Reuters. Artificial intelligence company Anthropic has received a class-action lawsuit in California federal court from three authors who claim the company misused their books and hundreds of thousands of others to train its AI chatbot, Claude.
• Elon Musk's purchase of X was the worst deal for banks since the financial crisis - WSJ. It was financed by 7 financial institutions, including Morgan Stanley and Bank of America. Typically, banks are quick to pass on such debts to other investors, but X's disappointing financial results made this process more difficult, so the loans remained on the banks' financial statements. Despite these difficulties, financial institutions receive interest payments and do not lose hope that X will eventually repay the entire debt.
• Uber Technologies hired former Tesla executive Rebecca Tinucci. To oversee the taxi platform's transition to electric vehicles, bringing in an executive who helped open up the automaker's network of charging stations to other auto brands.
• Alphabet's robotaxi unit Waymo doubles paid rides in three months - Reuters. Alphabet's Waymo said Tuesday it doubled the number of paid rides to 100,000 per week in just over three months as the autonomous firm expanded service areas and allowed more people to ride in its robotaxis.
• Netflix shares continued their rise during the sixth session and hit an all-time high. As the changes the company has made to its streaming platform are boosting subscriber and sales growth.
• Kroger is offering $10.5 billion in bonds to pay for the Albertsons merger. Kroger is tapping the U.S. investment-grade bond market Tuesday to help finance its acquisition of Albertsons in what could be one of the largest corporate bond deals this year.
• Coinbase's Q2 earnings report shows a slight slowdown. Overall, Coinbase continues to perform well despite slow crypto growth in Q2. In July, thanks to the Olympic Games in the United States, the number of viewers of streaming platforms increased sharply - Nielsen. Streaming platforms accounted for 41.4% of TV viewing for the month and accounted for the largest share of all TV viewing formats, including traditional broadcast and cable broadcasting.
• China and Hong Kong are set to expand a pilot wealth management scheme that allows residents to invest overseas, sources said. They added the first batch of 10 brokerages, including the country's largest brokerages, two people with direct knowledge of the matter told Reuters.
• Lowe's (LOW) cut its full-year earnings and sales forecasts in its quarterly report. The home goods retailer noted muted consumer demand for larger purchases. High interest rates, inflation and economic uncertainty are causing homeowners to pause large projects, according to the CEOs of Lowe's and Home Depot. LOW shares fell 1% yesterday.
• The EU will propose new 9% tariffs on Chinese-made Tesla cars. This is compared to 20.8% that was introduced previously.
• Shares of developer TOL rise by 0.65% after the report. Toll Brothers raises its full-year forecast, citing optimism about "robust" housing demand. “Given the lowest mortgage rates in a year and trending downwards, favorable demographics and ongoing imbalances between supply and demand in the housing market, we are optimistic that demand will remain strong through the end of fiscal 2024 and into 2025.”
• Microchip Technology said a cybersecurity breach disrupted its operations. MCHP shares are down 0.65% in premarket trading. The full scale, nature and consequences of the incident are still unknown.
• Boeing shares fell 4% yesterday due to the grounding of the 777x. The company will ground its test fleet of four 777x aircraft after cracks were discovered in part of the plane's structure connecting the engine to the fuselage.
Key events that may affect markets on Wednesday:
Economy: revision of US labor data.
Politics: Minutes of the US Federal Reserve.
International reviews
• More Americans are looking for work as unemployment fears rise to the highest level in a decade
The average expected probability of being unemployed over the next four months has reached its highest level in a decade, according to a new survey released by the Federal Reserve Bank of New York on Monday. throughout the survey's 10-year history, rising to 4.4%, up from 3.9% in the same period last year.
• Consumer inflation in the Eurozone is expectedly stable in July. Core CPI remained 2.9%. And CPI expectedly increased from 2.5% to 2.6%.
• Japan has recorded a trade deficit as rising world prices lead to increased imports. Japan's imports rose nearly 17% year-on-year to 10.2 trillion yen ($70.6 billion), while exports rose 10% to 9.6 trillion yen ($66 billion).
Imports of meat and other food products. and iron also rose, indicating a relatively healthy domestic economy, where consumer spending improved amid rising wages.
Exports to the United States, China and Brazil rose, but auto exports continued to suffer due to a test-rigging scandal that has halted production at some manufacturers, including leading Japanese automaker Toyota Motor.
• Israel agreed to a ceasefire in the Gaza Strip: Blinken called on Hamas to do the same. “During a very constructive meeting with Prime Minister Netanyahu, he confirmed to me that Israel supports the proposal for an intermediate option. The next important step must be a response from Hamas,” the US Secretary of State said.
• A manufacturer of counterfeit banknotes worth 11 million euros has been arrested in the EU. A counterfeiter has been arrested in Naples in southwestern Italy and his underground printing press, which "resembled a bunker", has been dismantled, Europol said. According to investigators, the man issued more than 27% of all counterfeit euro banknotes discovered and withdrawn from circulation in 2023. Banknotes worth 3 million euros were seized from the printing house itself.
• For the first time since World War II: Lithuania began to build bases for German troops near the border with the Russian Federation, - Reuters. Up to 4,000 German troops will be stationed there by the end of 2027. In addition, there will be storage and maintenance for tanks and shooting ranges of all sizes. Another ~1000 German fighters and civilian contractors will be stationed at other sites in Lithuania.
• Former President Barack Obama returned to the national stage Tuesday night to support his longtime Democratic ally Kamala Harris in her 11th-hour presidential race against Republican Donald Trump.
• “If I lose, the country will go into a tailspin”: Trump criticized Harris. Republican candidate for the 2024 US presidential election Donald Trump again insulted Democratic rival Kamala Harris, calling her “not very smart.”
Trump said that he wants to take Musk as an adviser if he wins the election.
Musk reacted on the social network X (Twitter): “I am ready to serve.”
Trump said Harris pulled out of the Sept. 4 debate.
Trump said he was not surprised by her decision and he would answer questions from voters on the same date instead of a debate.
• China has equated transactions with cryptocurrencies to money laundering. The country's anti-money laundering law introduced the concept of “virtual asset transactions.” Now, for the transfer and conversion of digital assets obtained illegally, violators will face a fine of up to 200 thousand yuan or imprisonment for a term of 5 to 10 years.
• According to the Bundesbank, wage growth in Germany is not slowing and inflation is likely to remain high. Which is a worrying sign for the ECB, which is struggling to bring price growth back to its 2% target.
• Inflation in Canada has slowed to its lowest rate in three years. This allowed the Central Bank to maintain its policy of lowering rates at its third meeting next month.