MARKET REPORT
(Unburdened by what has been)
Glasgow Stock Exchange
Day in Review:
Today:
DATA (Kamalanomics):
– The Fed’s favorite inflation indicator – Core PCE – instead came in slightly hotter than expected, rising 2.6% YoY (vs +2.5% YoY exp). The headline PCE dipped to +2.5%
– Durable goods deflation continues to drag Core PCE lower while Services costs continue to rise:
– UMich Consumer Sentiment slumped further in July with Current Conditions plunging to their weakest since Dec 2022
– UoM Final headline, 5yr inflation revised Higher, with 1yr Unchanged
– Rate cut Expectations up modestly on the week
COMPANIES:
– Warner Bro’s sues NBA after rejection of rights
GENERAL:
– Paris opening ceremony (Paris was closed?)
– Euro Bourses close higher
– Apple’s IPhone falls out of China’s Top Five as domestic brands soar in popularity
– Japan’s MoF wants BoJ to cut bond purchases, Cooler than forecasted Tokyo CPI.
– Obama’s endorse Kackler
– Netanyahu meets with Kackler
– Credit card delinquency rate hits 12-yr high
– Coordinated sabotage hits French railway system for Opening ceremony
– Steel hits 7yr LOW, Wheat hits 4yr LOW, Corn (-6.21%) hits 3.5yr LOW, OJ up 3.25%
– Nat Gas +1.95%, Heating Oil -1.87%
– Equities SOAR, DOW leads. Gold/Si Bounce. Crypto JUMPS, Crude pukes, Dollar FLAT
DOLLAR DX UNCH: 104.31 UNCH (104.45 – 104.23) MID
– AUD up: 65.54 +0.23% (65.37 – 65.68) MID
– EUR UNCH: 92.09 UNCH (92.20 – 91.99) MID
– GBP up: 1.2872 +0.14% (128.51 – 128.78) Off HIGHS
– JPY UNCH: 153.77 UNCH (154.72 – 153.26) MID
GOLD up: $2385 +1.34% (2364 – 2389) Off HIGHS
DOW/ES/ND UP/up/up: 40817 +1.56%, 5496 +1.02%, 19169 +0.94%
CRYPTO: BTC/ETH up/up: 67834 +5.18%, 3264 +5.52%
CRUDE DOWN: $76.69 -1.85% (78.44 – 76.23) Off LOWS
Coming Up:
– Swedish GDP, Retail Sales, US Dallas Fed Manufacturing Business Index
Week Ahead:
– FOMC, BoJ, BoE, NFP, ISM Mfg. PMI and OPEC+ JMMC
Speakers:
– UK Chancellor Reeves
EARNINGS:
– Poste Italiane, Pearson, Entain, Heineken, Philips, McDonald’s
MAJORS:
DX:
The Dollar Index was flat, trading within an extremely tight range, and largely unreactive to the mixed US PCE data for June, whereby Core M/M and Y/Y came in marginally above expectations, while the headline price index came in line.
Atlanta Fed’s Initial GDPNow for Q3 was 2.8%.
The Greenback finished the week flat, in what was a muted week, in terms of ranges, as traders await the deluge of risk events next week.
The Fed’s interest rate decision is one, and we will be looking to see how they frame the recent cooling economic data and see if they open the door to a widely expected cut in September, although Powell will likely stress data dependence. At the moment, Fed Pricing sees a 95.5% chance they hold next week.
Data for the upcoming week will see ISM Manufacturing PMI and NFP out of the US, as well as mega-cap earnings.
DOLLAR DX UNCH: 104.31 UNCH (104.45 – 104.23) MID
EUR
The Euro is slightly firmer vs. the Buck, with the cross hovering near 1.0860.
News-flow in the session was thin, albeit, Friday did see the ECB’S SCE 12-month and 3-year projections unchanged at prior levels.
ECB Schnabel’s remarks largely aligned with the Central Bank’s narrative, IE, the speed of ECB rate cuts will depend on data. Tempered with she stressed services inflation is showing that the last mile of the inflation fight is especially difficult, and that a first rate cut does not automatically lead to a series.
News for the day saw France and Italy report positive consumer Confidence reports, while Spanish Unemployment fell more than expected.
EUR UNCH: 92.09 UNCH (92.20 – 91.99) MID
GBP/AUD:
BoE’s rate decision (Thu), where BoE pricing puts an approx. 50/50 chance of a rate cut or hold.
GBP up: 1.2872 +0.14% (128.51 – 128.78) Off HIGHS
AUD up: 65.54 +0.23% (65.37 – 65.68) MID
YEN:
Bloomberg reported that Japan’s Ministry of Finance stated he wants the BoJ to cut bond purchases gradually, a view which corresponds to the BoJ source’s reports earlier in the week that the BoJ is to have a detailed plan in the upcoming meeting on having bond buying in the coming years.
Havens continue their weekly streak of gains, with the USD/JPY dropping below its 200WMA (155.21) to 153.74, its third consecutive week of losses.
JPY UNCH: 153.77 UNCH (154.72 – 153.26) MID
GOLD/METALS:
The yellow metal was on pace to trim Thursday’s nearly 1.5% decline and recover some of the losses incurred in the last six of seven trading sessions.
Gold was up $24.96 and hovering around the $2,390 per ounce level. Silver, meanwhile, was more mixed, shifting multiple times between negative and positive territory. The gray metal – which struggled this week on an unclear demand outlook in China – was down $0.09 at $27.75 per ounce.
– Sick week overall.
GOLD up: $2385 +1.34% (2364 – 2389) Off HIGHS
BONDS:
– Treasuries have been broadly bid the last two days, with the long-end lagging (but managing to get back to unchanged on the week today) as the short-end yields tumbled
– the yield curve (2s30s) disinverted most sine July 2022
EQUITIES:
– Since peaking on July 10th, the market cap of the Magnificent 7 stocks has dropped a mind-numbering $2 trillion
– Another week goes by (the third in a row) with Small Caps (+3%) dramatically outperforming Nasdaq (-3%)
– NASDAQ vs Russell back in ‘normal’ range
EUR:
– DAX +0.68% 18,423
– FTSE +1.21% 8,286
– CAC +1.22% 7,518
– ES50 +1.03% 4,861
US:
– SPX +1.1% 5,459
– NDX +1% 19,024
– DJIA +1.6% 40,589
– RUT +1.7% 2,260
Sectors (W to S): Energy +0.36%, Health +0.57%, Consumer Staples +0.89%, Communication Services +0.91%, Utilities +0.99%, Technology +1.09%, Consumer Discretionary +1.17%, Financials +1.49%, Real Estate +1.67%, Materials +1.68%, Industrials +1.72%
STOCKS:
– CrowdStrike (+0.79%) – CEO said that 97% of Windows sensors are back online after a global outage caused by a faulty software update in their Falcon platform.
– Honeywell (+0.14%) – Reportedly weighing Quantinuum IPO at a USD 10bln valuation, according to Bloomberg; listing in the US could take place as soon as next year.
– Boeing (+1.38%) – Told suppliers to disclose all paperwork on titanium bought from China since 2014; and titanium paperwork by August 9th, according to Reuters citing a letter.
OIL:
WTI crude oil futures fell by 1.4% to settle at $77.16 per barrel on Friday, marking a third consecutive weekly decline due to weak Chinese demand despite positive US inventory data. Concerns about China’s economic growth, highlighted by Beijing’s rate cuts to stimulate the economy, negatively impacted market sentiment.
China’s reduced oil imports and refinery activity due to slow economic growth also weighed on prices.
Ceasefire talks between Israel and Hamas eased supply concerns, adding further pressure.
Strong US Q2 economic growth raised expectations for potential Fed rate cuts in September, which could boost oil demand. On Wednesday, the EIA reported a larger-than-expected drop in US crude inventories by 3.7 million barrels and a significant decrease in gasoline stocks by 5.6 million barrels.
Looking ahead, market watchers are divided on whether OPEC+ will ease output curbs next quarter, with a meeting scheduled for August 1.
CRUDE DOWN: $76.69 -1.85% (78.44 – 76.23) Off LOWS
BOND YIELDS:
US 1-MO 5.373 +0.012
US 6-MO 5.131 -0.013
US 1-YR 4.803 -0.044
US 5-YR 4.076 -0.068
US 10-YR 4.195 -0.060
US 30-YR 4.455 -0.044
2YR/10YR -0.19
CRYPTO
– BTC 2024 conference continues in 2024
– The spot Ether ETFs had $152.4 million of net outflows yesterday, while the spot Bitcoin ETFs had $31.1 million of net inflows.
– Jersey City Mayor Steven Fulop revealed that the city’s pension fund will invest in bitcoin ETFs, while and the State of Michigan Retirement System reported owning $6.6 million of the ARK 21Shares Bitcoin ETF.
– Coinbase stock is up 4.83% after it named three new board members
– Back to $68 on the week VS:
– Sell the news for ETH
CRYPTO: BTC/ETH up/up: 67834 +5.18%, 3264 +5.52%
KEEP DOING WHATS WORKING
Best of luck out there. Let the market come to you
Clip of the Day:
Song of the day:
Joke of the Day:
https://www.youtube.com/shorts/0fUOEgWNhJ8?sttick=0
On this day:
July 2th:
1775: US Postal system established
1908: FBI Founded
(Seize all assets of Duke and Duke enterprises)
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