MARKET REPORT

Shanghi Stock Exchange

Day in Review:

Today:
– Tesla SOARS (+10%) on deliveries beating Wall Street Expectations
– ACT 443,956 vs EXP 439,302

The second quarter total delivery figure is higher than the 386,810 vehicles globally delivered in the first quarter but lower than the approximate 466,140 delivered a year ago.

– Fed POWELL stated he is encouraged by cooler inflation but reinforced that the central bank will need to see more evidence before cutting interest rates.
– He noted the latest inflation readings from April and May “do suggest that we are getting back on a disinflationary path.”
– Goolsbee does not buy the last mile of inflation could take longer

– US JOLTS (Job openings) Beat Expectations ACT: +221k to 8.14m beating Exp of 7.91m
– Apr revised DOWN
– Most new openings in PUBLIC sector

– US Economic Optimism Index TIPPS hits 6-month high +3.7points to 44.2 vs Prev 40.5 Exp 41.2

– US Treasuries with longer durations were pressured by the skew toward Donald Trump’s favor in the incoming Presidential election following last week’s debate due to his expansionary fiscal pledges.
Additionally the Supreme Court’s ruling on Monday that ex-presidents have broad immunity from criminal prosecution. A potential Trump presidency is seen as inflationary due to tax cuts, tighter immigration policy and higher tariffs on imports

– Macro Surprises have turned negative according to Goldmans.

– Chinese Yuan hits 33-week LOW

– Lithium hits 3-year LOW

– French 10yr Bond falls 7.1bps.
– The yield on France’s 10-year bonds fell by nearly 10 basis points to 3.26% on Tuesday, down from an eight-month high of 3.34% on Monday. This decline followed increased efforts by opponents of France’s National Rally to block the far-right party from gaining power. Over 200 candidates have withdrawn from the race, easing investor concerns about the potential for an extremist government pursuing a fiscally expansive agenda. In the recent snap parliamentary election, the National Rally party won the first round, but with a smaller margin than some polls had predicted and without securing a majority.

– Euro Bourses close LOWER on HOT core EU inflation

– Cocoa +5.3%, Canola +3.6%, Wheat -4.8%, Corn -4.6%

– DOLLAR DOWN, GOLD UNCH, EQUITIES UP, TECH LEADS, CRYPTO DOWN, CRUDE FAILS AFTER HITTING 2 MONTH HIGH $84+, TREASURIES UP (YIELDS DOWN)

DOLLAR DX down: 105.37            -0.21% (105.735 – 105.365) LOWS
– AUD up: 66.69                                 +0.17% (66.36 – 66.72) HIGHS
– EUR UNCH: 93.03                          UNCH (92.34 – 93.03) LOWS
– GBP up: 1.2686                              +0.29% (126.17 – 126.88) HIGHS
– JPY UNCH: 161.45                         UNCH (161.73 – 161.27) Off LOWS

GOLD UNCH: $2338                                        UNCH (2328 – 2346) MID
DOW/ES/ND up/up/UP:                                 39664 +0.04%, 5563 +0.5%, 20240 +0.95%
CRYPTO: BTC/ETH down:                              61912 -2%, 3412 -1.5%
CRUDE down: $83.13                                     -0.3% (84.37 – 82.77) LOWS

Upcoming:

– AU, EZ, UK & US Final PMIs
– CH Services PMI
– US ADP, IJC, Challenger, Factory Goods, ISM Services
– FOMC Minutes
– Riksbank Minutes

Speakers:

– Fed’s Williams
– ECB: Lane, Lagarde, de Guindos, Cipollone, Knot

EARNINGS:

– Constellation Brands

MAJORS:

DX:
The Dollar was generally UNCH against its peers, with the DXY seeing session highs above the 106 level early on in the session amid dovish-leaning commentary from Fed Chair Powell, noting the disinflation trend shows signs of resuming.

However, the index saw another bout of strength in wake of the hotter-than-expected JOLTS.

Nonetheless, DXY swiftly erased any gains post-data, with attention on a deluge of US data on Wednesday, given the July 4th market holiday.
The data includes, ADP, initial jobless claims, challenger layoffs, ISM Services, and factory orders.

DOLLAR DX down: 105.37            -0.21% (105.735 – 105.365) LOWS

EUR:
The Euro was flat against the Buck with the recent relief rally which sparked from France’s RN party obtaining a lesser majority than thought in the 1st round of elections, taking a pause.

EZ supercore Inflation Y/Y was slightly hotter-than-expected at 2.9% (exp. 2.8%), while the rest of the report was in line, with analysts at Citi noting that the sticky core CPI is becoming a concern for the ECB.

The region saw multiple ECB speakers, with slight divergences between views on the interest rate path in 2024; Centeno expects a few more rate cuts this year; Kazaks expects one or two further cuts, and is consistent with the baseline scenario; Simuks and Wunsch appear to back two further rate cuts; meanwhile, Maklouf said he is comfortable with expectations of another interest rate cut, but two cuts are probably going a little too far.

Attention will remain on Sintra as the event wraps on Wednesday, with Cippolone, Guidnos, Lane, and Knot still to speak.

Data on Wednesday consists of Final HCOB’s PMIs for France, Italy, Germany, and the Eurozone.

EUR UNCH: 93.03                            UNCH (92.34 – 93.03) LOWS

GBP
Cable gained momentum ahead of the UK General Election on Thursday, with the pair ascending above its 50 DMA (1.2656), gaining over 30 pips in the session.

GBP up: 1.2686                +0.29% (126.17 – 126.88) HIGHS

AUD:
RBA minutes from the June meeting (where the cash rate was held at 4.35%), which revealed the Board judged the case for holding rates steady was stronger than hiking, although a hike might be needed if the board judged its policy was not sufficiently restrictive, with data suggestive of upside risk for May CPI; the minutes also unveiled that the recent data wasn’t sufficient for the Central Bank to change its inflation target outlook for 2026; AUD/USD immediately moved higher by 4 pips to 0.6650 from 0.6646.

The AU calendar for Wednesday involves, Jubo Bank Services PMI FInal June, and Retail Sales M/M Prelim for May

AUD up: 66.69                                  +0.17% (66.36 – 66.72) HIGHS

YEN:
The Yen continued to make fresh multi-decade highs of 161.75, that said, the cross finished off session highs. Traders await any possible commentary from Japan overnight, with much attention on intervention speech. The 165 mark is being touted by many as a potential entry point for intervention.

JPY UNCH: 161.45                           UNCH (161.73 – 161.27) Off LOWS

GOLD/SILVER

Gold unchanged despite dollar weakness in a muted session.

GOLD UNCH: $2338                                        UNCH (2328 – 2346) MID

EQUITIES:

US:
– SPX +0.62% 5,509
– NDX +1.01% 20,012
– DJI +0.41% 39,332
– RUT +0.19% 2,034

EURO:
– DAX -0.75% 18,153
– CAC -0.3% 7,538
– FTSE -0.56% 8,121
– ES50 -0.47% 4,907

SECTORS (W to S): Health -0.4%, Energy -0.2%, Materials +0.16%, Real Estate +0.4%, Utilities +0.44%, Technology +0.54%, Industrials +0.55%, Consumer Staples +0.62%, Communication Services +0.84%, Financials +1.1%, Consumer Discretionary +1.81%.

STOCKS:
Tesla (+10%): Reported deliveries Q2 deliveries of 444k vehicles (exp. 439k) and produced 411k vehicles

General Motors (-0.72%) – Announced deliveries +0.6% Y/Y at 696k, total EV deliveries +34% Q/Q and +40% Y/Y to 21.9k.
Toyota (+1.23%) – Reported North America US sales (June): -1.2% to 193k, EV sales +64.5% to to 84.7k ehicles.
Amazon (+1.42%) – Amazon’s international arm is expected to achieve an annual profit, reversing years of losses, the FT reports.
Novo Nordisk (-1.69%), Eli Lilly (-0.8%) – US President Biden said: “If Novo Nordisk and other pharmaceutical companies refuse to substantially lower prescription drug prices in our country and end their greed, we will do everything within our power to end it for them”.
Paypal (+2.01%) – Upgraded at Susquehanna citing the stock’s recent sell-off, and said it is making “profitable growth” a top priority.
Paramount Global (+5.72%), IAC (-0.17%) – IAC’s Chairperson Diller is exploring a bid to take control of Paramount. In other news, Paramount is reportedly in talks to sell its BET network for USD 1.6bln per Bloomberg.
Blackstone (+0.8%) – Nearing a deal to sell Alinamin Pharmaceutical to MBK Partners for USD 2.17bln, according to Reuters sources.

OIL:
– Oil prices touched a new two-month highs before legging back down for the day with WTI holding around $83 into tonight’s API data:

CRUDE down: $83.13                                     -0.3% (84.37 – 82.77) LOWS

BOND YIELDS:

US 1-MO 5.364 -0.009
US 6-MO 5.31 UNCH
US 1-YR 5.084 -0.038
US 5-YR 4.399 -0.040
US 10-YR 4.436 -0.042
US 30-YR 4.606 -0.037

2YR/10YR -0.31

CRYPTO
– Having rallied back up to the scene of the Mt.Gox headline crime, Bitcoin slipped back lower today, despite 5 straight days of ETF inflows leading into this

– Coinbase has inked a $32.5m deal with Justice Departments US Marshals to provide custody and trading of its digital assets.

CRYPTO: BTC/ETH down:                              61912 -2%, 3412 -1.5%

KEEP DOING WHATS WORKING
STOP WHAT ISNT.

Best of luck out there. Let the market come to you

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