Stock news - optimism from France, cooling in the USA, corporate news of the company
Fundamental Analysis
• Any worries about a far-right victory in France appear to have been premature, as polls show the left-wing New Popular Front alliance winning a majority of seats, albeit well short of a majority. Pollsters' forecasts, which are generally accurate, are for the left to win 184-198 seats out of 577, President Emmanuel Macron's centrist alliance 160-169, and Marine Le Pen's nationalist and Eurosceptic National Rally (RN) party and her allies. 135–143.
• Stocks were broadly supported by growing confidence that the Federal Reserve will cut rates in September following weak June jobs report data. Futures now suggest a 76% chance of easing on Sept. 18, with 53 basis points of easing priced in this year, up from about 40 basis points a month earlier. Federal Reserve Chairman Jerome Powell will have a chance to make his case when he testifies before Congress on Tuesday and Wednesday, while several more Fed officials will testify this week.
• NATO countries are no longer afraid of Donald Trump returning to the White House, Politico reports. According to the publication, alliance members feel much more confident than when he first came to power. NATO fears Biden is too old and unhealthy to beat Trump in the presidential election. Politico writes about this, citing conversations with about 20 representatives of the alliance from different countries. “We are not sure that even if he wins, he will be able to hold out for another four years,” the publication quotes one of the interlocutors.
• The British billionaire decided to distribute part of the money from the sale of the company to his employees. Mark O'Hara said he would split $653 million of the $3.2 billion sale of Prequin equally among his 1,500 employees. As a result, each of them should receive approximately $430 thousand.
• The annual ranking of world competitiveness 2024 was published by the International Institute of Management Development (IMD). Singapore, Switzerland and Denmark again topped the list. These countries demonstrate high levels of government and business efficiency, as well as the ability to quickly adapt to changes in the global economy. At the same time, such giants as the USA are gradually losing their positions.
• China calls on the EU to “meet halfway” in the dispute over electric vehicles. In a statement released after the EU executive confirmed that temporary tariffs of between 17.4% and 37.6% on Chinese-made electric vehicles would take effect from Friday (July 5), China's Ministry of Commerce stressed its "strong opposition" with this decision and called for “resolving the dispute through dialogue and consultation.”
Corporate analysis
• 10 billion passwords were publicly available. This is the largest data breach of people and companies around the world in history - CyberNews.
• Amid the collapse of cryptocurrencies, the fear and greed index dropped to 29. This is the lowest value since the beginning of 2023, when BTC was trading at $17 thousand - Coindesk.
• Europe's largest solar power plant has opened in Germany. The Witznitz Energy Park in Saxony near Leipzig consists of 1.1 million photovoltaic panels that occupy an area of 500 hectares - that's about 700 football fields.
• The Chinese company BYD is expanding its control zones. China's BYD is acquiring a 20% stake in its local distributor Rever Automotive in Thailand, the largest market outside China where it is a market leader in electric vehicles.
• Large banks suffer from commercial real estate - WSJ. While smaller banks do most of the lending, it is the larger banks' loans that are showing signs of trouble.
• China's anti-dumping investigation into cognac industry is a reaction to EU auto tariffs - Reuters. China's anti-dumping probe into Europe's cognac industry is a tit-for-tat response to European Union tariffs on Chinese electric cars, LVMH's chief financial officer said on Saturday.
• The ECB cannot rush to cut rates due to rising wages and service costs: Mueller (Bloomberg). European Central Bank Governing Council member Madis Müller said officials should be cautious about further easing monetary policy.
• Hackers stole $1.38 billion worth of cryptocurrencies in the first half of 2024. The amount of cryptocurrency stolen in hacking attacks worldwide rose to $1.38 billion in the first half of 2024 from $657 million in the same period last year. One of the biggest cryptocurrency losses this year was the theft of approximately $308 million worth of bitcoins from the Japanese cryptocurrency exchange DMM Bitcoin.
• Revolut CEO to sell $500 million worth of shares - Sky News. The Financial Times reported last month that the digital finance app was working with bankers to sell shares, including shares owned by employees.
Corporate France braces for new era of political turmoil - Reuters
• Fraudsters steal billions from Americans every year - APF. Worse than that. Moreover, most scammers go unpunished. The scammers are winning. Internet and telephone scams are growing "exponentially", overwhelming police and prosecutors who have managed to catch and convict relatively few criminals.
• The Chinese central bank suspended gold purchases for the second month in a row (Bloomberg).
• Former UBER CEO Travis Kalanick may head Robotaxi Tesla on September 8 - rumors.
this week
- Thursday's inflation report is expected to be the headline story for U.S. markets in a busy week that also includes the start of second-quarter corporate earnings reporting season, several Treasury auctions and potential developments in the presidential race.
Economists surveyed by The Wall Street Journal expect core inflation to slow to an annualized 3.1% in June from 3.3% in May, while core inflation is a more closely watched measure that does not take into account volatile commodity prices. food and energy products - will remain stable at 3.4%.
- And hurray - the reporting season for the 2nd quarter begins. Earnings season also kicks off this week, with JPMorgan Chase, Citigroup and Wells Fargo reporting on Friday. PepsiCo and Delta Air Lines are also reporting.
- The S&P 500 trades at about 21 times projected future earnings, but if you exclude the 10 largest stocks by market value, the average for the rest of the index drops to 16.5.
Key events that could impact markets on Monday:
- Bank of England Monetary Policy Committee member Jonathan Haskell speaks
- Spanish Economy Minister Carlos Cuerpo to speak at Europa Press event
- German trade figures for May, Euro Zone Sentix index for July