MARKET REPORT
(Unburdened by what has been)
New Zealand Bourse
Day in Review:
Today:
(Kamalanomics):
DATA:
– ADF Employment MISS. Act 122k, EXP 150k Prev 155K
– US pending home sales bounced in June +4.8% MoM. YoY sales decline 7.8% YoY
– The pending-sales figures tend to be a leading indicator of sales of previously owned homes, because houses typically go under contract a month or two before they’re sold
– BoJ Shocks by HIKING into weakening economy to contain crashing Yen
– BoJ lifted its benchmark interest rate to 0.25% and outlined plans to halve its monthly bond purchases.
– By a majority of 7-2, the BoJ raised its overnight interest rate to “around 0.25 per cent”, the highest level since the global financial crisis in late 2008, from a previous range of 0 to 0.1%. The bank in March ended its negative interest rate policy following decades of on-and-off deflation.
– FOMC:
– Federal Open Market Committee votes unanimously to leave benchmark rate unchanged in target range of 5.25%-5.5%, a more than two-decade high, for the eighth straight meeting
– Statement repeats prior language saying the FOMC doesn’t expect to cut rates “until it has gained greater confidence that inflation is moving sustainably toward 2%”
– Statement tweaks language to say “the committee is attentive to the risks to both sides of its dual mandate”; had previously said officials were “highly attentive to inflation risks”
– Fed also tweaks language to say price pressures remain “somewhat” elevated, and acknowledge “some further progress” toward inflation goal, from “modest further progress” in previous statement
– Decision is unanimous for 17th straight meeting
COMPANIES:
– Boeing (+3.64%) released earnings per share at -2.90 USD, compared to market expectations of -1.69 USD
– Boeing appoints new CEO
– Kelly Ortberg (former head of one of its suppliers)
– NVDA BOUNCE! (JP Morgan ‘Top Pick’) +14%
– NVDA added a stunning $330BN in market cap today – its largest single-day gain ever
– Pinterest PLUNGES -14.5%
– TSLA +4.5%
– META +5% POST CLOSE on Earnings
– Samsung Electronics (+3.58%) released earnings per share at 1,419 KRW, compared to market expectations of KRW
– T-Mobile Us (+4.19%) released earnings per share at 2.49 USD, compared to market expectations of 2.28 USD.
– Kraft Heinz (+4.26%) released earnings per share at 0.78 USD, compared to market expectations of 0.74 USD
– Marriott International (-4.91%) released earnings per share at 2.50 USD, compared to market expectations of 2.47 USD
– Mastercard (+4.26%) released earnings per share at 3.59 USD, compared to market expectations of 3.51 USD
GENERAL:
– UK Stocks End at Over 2-Month High, Log Monthly Gain, CAC higher, IBEX lower
– Israel kills leader of Hamas in Tehran
– Ayatollah promises severe retribution
– Solid AMD report & raises FY chip sales guidance; US exemptions for ASML and Tokyo Electron in new sanctions on exports to Chinese chipmaker
– Delta CEO prepares legal battle against Crowdstrike after IT outage sparks $500m loss.
– Crude Inventory tumbles to 6-month LOWS
– Russia launches single biggest drone attack on Kiev of war.
– Venezuelan ‘President’ Maduro challenges Elon Musk to a fight. Yup. Post Musk tweets of Maduro election fraud
– Natural Gas Pares (-4.63%), Crude Surge (+4.42%), Rapeseed +7.3%, Corn -5.51%
– Equities/Crude/Bonds UP, Dollar pares (Yen), Crypto UNCH
DOLLAR DX down: 104. 04 -0.5% (104.50 – 103.94) LOWS
– AUD UNCH: 65.38 UNCH (64.80 – 65.38) Off HIGHS
– EUR UNCH: 92.36 UNCH (92.15 – 92.53) MID
– GBP up: 1.2854 +0.16% (128.22 – 128.64) Off HIGHS
– JPY SMOKED: 149.81 -1.92% (153.63 – 149.58) LOWS
GOLD UP: $2494 +1.67% (2459 – 2495) HIGHS
DOW/ES/ND up: 41119 +0.4%, 5552 +1.46%, 19464 +2.7%
CRYPTO: BTC/ETH down/UNCH: 65232 -1%, 3264 UNCH
CRUDE SURGE: $78.39 +4.88% (75.87 – 78.51) HIGHS
Coming Up:
– Australian, Chinese, EZ, UK, US PMIs, US IJC, ISM Manufacturing
– BoE & CNB Policy Announcements, OPEC+
Speakers:
– BoE’s Bailey & Pill
EARNINGS:
– ING, ArcelorMittal, Merck, Evonik, Symrise, Hugo Boss, BMW, Rational, Volkswagen, MTU Aero, Vonovia, DHL, Technip Energies, Credit Agricole, Société Generale, Rolls Royce, Smith & Nephew, BAE Systems, Shell, Barclays, Haleon, WPP, Mondi, Next, Ball, Moderna, Amazom.com, Apple, Coinbase, Intel, MicroStrategy, Cigna, Wendy’s, Snap Inc.
MAJORS:
DX:
The Dollar Index was weaker against all of its G10 FX peers, and was already trading lower ahead of the FOMC decision.
Upon the Fed’s decision to hold the FFR at 5.25-5.50% (as expected), the index spiked higher, however, it swiftly resumed its decline into the red as Chair Powell spoke, nearing earlier session lows of 103.92. Overall, Powell held a dovish tone noting that September is the base case for a rate cut, albeit data dependent, and even said there was a real discussion about the case for reducing rates at the meeting, yet, a strong majority supported not moving.
Elsewhere in the US space, ADP National Employment (Jul) added fewer jobs than expected; Employment Costs rose 0.9% (exp. 1.0%), and Chicago PMI for July beat expectations. Buck-specific drivers lie ahead, with the focus now turning to ISM and Initial Jobless Claims on Thursday, NFP report on Friday, and mega-cap earnings in between.
DOLLAR DX down: 104. 04 -0.5% (104.50 – 103.94) LOWS
EUR
The Euro saw slight gains on Wednesday, after slightly hotter-than-expected EZ inflation data. EUR/USD continues to sit near the low end of the 1.08 level, with EZ drivers thin for the remainder of the week, with the upcoming US data (ISM, NFP) the likely influences on a move for the pair.
EUR UNCH: 92.36 UNCH (92.15 – 92.53) MID
GBP/AUD:
Aussie: weakness ensued in response to softer-than-expected RBA CPI Metrics for Q2, though Australian Retail M/M Final was better than forecasts, AUD saw lows of 0.6479, bouncing significantly after, particularly post-FOMC meeting, sending the cross into positive territory.
Pound climbs higher, to roughly 1.2860 ahead of BoE’s announcement on Thursday, where BoE pricing puts an approx. 60% chance of a 25bps cut.
GBP up: 1.2854 +0.16% (128.22 – 128.64) Off HIGHS
AUD UNCH: 65.38 UNCH (64.80 – 65.38) Off HIGHS
YEN:
The Yen outperformed significantly and saw notable gains against the Buck, following the BoJ unexpectedly hiking interest rates to 0.25% (a 40% chance of a 15bps hike was priced in).
The vote to hike was made with a 7-2 vote, whereas the decision on bond buying was made unanimously, with the Central Bank to reduce scheduled monthly bond buying by around JPY 400bln each quarter.
BoJ Governor Ueda said the decision to hike this time was made considering the upward risks to prices as being considerably large.
Going forward, the Governor said they will continue to lift rates and adjust the degree of easing if the current economic/price outlook is realised, with the main issue on where to stop raising rates, when approaching the neutral rate.
USD/JPY was volatile following the decision, immediately dropping 100pips to 151.60 from 152.60, though clawed back losses swiftly after. Nonetheless, weakness resumed in the cross, with USD/JPY falling to lows of 149.60.
JPY SMOKED: 149.81 -1.92% (153.63 – 149.58) LOWS
GOLD/METALS:
Gold held its earlier gains and traded above $2,420 per ounce on Wednesday, remaining relatively close to the record high of $2,470 from July 16th, supported by expectations of looser monetary policy in the United States and fresh demand for safe-haven assets.
The Federal Reserve held its interest rate unchanged, as largely expected by markets, and hinted that recent economic developments are aligning with those that warrant less restrictive interest rates, including progress in moderating consumer prices and a softening labor market. Lower interest rates ease the opportunity costs for holding non-interest-bearing bullion assets, raising their prices.
Elsewhere, Hamas leader Ismail Haniyeh was reported assassinated in Tehran, lifting the safety appeal of gold. This followed the Israeli government’s claim of killing Hezbollah’s top commander in a Beirut airstrike on Tuesday in response to an attack on the Israel-occupied Golan Heights over the weekend.
GOLD UP: $2494 +1.67% (2459 – 2495) HIGHS
EQUITIES:
Thanks to a massive $440BN surge today (the biggest day since Feb), the market cap of Magnificent 7 stocks ended the month down only 2.5% (though admittedly down 10% from the highs):
– MSFT Bounces back
EUR:
– DAX +0.48% 18,500
– FTSE +1.13% 8,368
– CAC +0.76% 7,531
– ES50 +0.70% 4,875
US:
– SPX +1.6% 5,522
– NDX +3% 19,362
– DJIA +0.2% 40, 843
– RUT +0.5% 2,254
Sectors (W to S): Health -0.39%, Real Estate -0.29%, Consumer Staples -0.20%, Financials -0.19%, Energy +0.42%, Materials +1.05%, Industrials +1.13%, Utilities +1.25%, Communication Services +1.29%, Consumer Discretionary +1.79%, Technology +3.95%
STOCKS:
– Microsoft (+5%) – Cloud revenue missed and Azure Q1 sales were seen rising 28-29% (exp. +30.5%). Reaffirmed capex outlook whilst it also said it expects H2 Azure growth to accelerate, showing tangible results from the AI spend
OIL:
Gasoline futures rose toward the $2.45 per gallon mark, rebounding sharply from the near two-month low of $2.35 touched on July 20th as the surge in crude oil prices lifted the input costs for refineries across the globe.
The assassination of Hamas’s leader in Iran triggered fresh concerns that warfare in the Middle East may escalate, threatening the outlook of supply and adding to the risk premium for energy commodities.
Further, data from the EIA showed that gasoline stocks in the US fell by 3.7 million barrels from the prior week on the period ending July 26th, nearly three times the expected draw, while crude oil inventories sank for a fifth straight week. This was enough to offset the poor energy demand from China as the world’s top energy consumer continued to struggle in reverting its economic slowdown.
CRUDE SURGE: $78.39 +4.88% (75.87 – 78.51) HIGHS
BOND YIELDS:
US 1-MO 5.371 -0.009
US 6-MO 5.089 -0.024
US 1-YR 4.753 -0.044
US 5-YR 3.933 -0.103
US 10-YR 4.057 -0.083
US 30-YR 4.34 -0.059
2YR/10YR -0.22
CRYPTO
– Grayscale unveils BTC mini Trust
– Trump raises $20m at BTC convention
– Economists skeptical about Trumps BTC Stockpile plan
It was a mixed month for crypto with Bitcoin managing gains (+4.5%) but Ethereum dumped (-4.5%), despite the launch of the ETH ETFs
CRYPTO: BTC/ETH down/UNCH: 65232 -1%, 3264 UNCH
KEEP DOING WHATS WORKING
Best of luck out there. Let the market come to you
Song of the day:
Joke of the Day:
https://www.youtube.com/watch?v=CI3cJx5D9Zg
TIED electoral race
On this day:
July 31st 1979: Hoffa goes missing
1973: Delta flight 723 crashes at Boston Logan
1556:Ignatius of Loyola, founder of the Jesuit order, dies
(Seize all assets of Duke and Duke enterprises)
I can be contacted should anyone have any questions, input at [email protected] during US hours of EST 9am until 5pm
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