MARKET REPORT
(Unburdened by what has been)
– Moscow Stock Exchange 1873
Day in Review:
Today:
(Kamalanomics):
DATA:
– BoE cuts by 0.25% to 5.0% (60% Exp cut) vote 5-4 for.
– the minutes did not provide any indications about the future rate cuts stating that “[t]he Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting”.
– Initial Jobless Claims surges to 12month highs 249k.
– S&P Global US Manufacturing PMI falls to 49.6 in July, dropping into contraction for the first time since Dec 2023
– ISM Manufacturing PMI plunged to 46.8 (48.8 exp) – weakest since Nov 2023
– Chinese PMI’s disappoint
COMPANIES:
– AMAZON pukes post bell on earnings release
– Moderna -20.75%
– Moderna (MRNA) released earnings per share at -3.33 USD, compared to market expectations of -3.35 USD
– Tech SMOKED
– NVDA (-6.67%)
– Qualcomm (-9.37% ) Reversed initial post-earnings gains, where EPS and revenue beat, after CEO flagged the impact of the US revoking an export license for China firm Huawei.
– Strong META report (+4.82%). Top and bottom line beat, gave better-than-expected guidance and said Meta AI is on track to be the most used AI assistant in the world by the end of the year.
– ING (-5.02%) released earnings per share at 0.54 EUR, compared to market expectations of 0.50 EUR
GENERAL:
– Hezbollah sends 60 rockets into northern Israel
– Euro Bourses close sharply lower
– California wildfires swell to 5th largest in history
– Bond Traders Are Fully Pricing In Three Fed Rate Cuts This Year
– United, Lufthansa, Delta, BA cancel flights to Tel Aviv
– A $1 Million Starter Home Is Now The Norm In 237 American Cities
– Russian/US prisoner swap
– Euro & Pound hit 4 week low
– Cocoa -6%, Corn -4%, Copper -3.26%, Nat Gas +3.8%
– Tech Stocks/Crude SMOKED, Dollar up, Gold UNCH Silver DOWN, Treasuries up, BTC SQUEEZE
DOLLAR DX up: 104.39 +0.28% (103.94 – 104.44) HIGHS
– AUD down: 65.01 -0.65% (65.60 – 64.90) Off LOWS
– EUR up: 92.67 +0.36% (92.27 – 92.75) Off HIGHS
– GBP down: 127.90 -0.90% (128.58 – 127.27) LOWS
– JPY down: 149.34 –0.38% (150.87 – 149.27) LOWS
GOLD up: $2489 ++0.68% (2474 – 2506) MID
DOW/ES/ND down/down/DOWN: 40405 -1.65%, 5467 -1.64%, 18943 -2.88%
CRYPTO: BTC/ETH SQUEEZE/down 64788 UNCH, 3165 -2%
CRUDE down: $76.93 -1.26% (78.83 – 76.26) Off LOWS
Coming Up:
– NFP!!!
– Australian PPI!
– Swiss CPI, Italian Industrial Output, Italian Retail Sales, Durable Goods (R)
Speakers:
– BoE’s Pill & Fed’s Barkin
EARNINGS:
– AXA, Engie, IAG, IMCD, Volvo Car AB, Chevron, Exxon
MAJORS:
DX:
The Dollar Index was firmer, with strength stemming from gains over Cylical Currencies, as havens saw strength in flight-to-quality after the exceedingly soft ISM Manufacturing PMI. Initially, the Index dropped on the ISM unexpectedly declining even further into the contractionary space. That said, the DXY swiftly pared losses, and made fresh session highs of 104.44 later on. ISM drop can largely be attributed to the declines seen in Employment, Production, and New Orders. Elsewhere in the data space, Initial Jobless Claims rose 14k to 249k, markedly above the expected, and also the consensus range.
The NFP on Friday will be the next possible catalyst for the Buck, with the US economy forecasted to add 175k jobs in July, while the Unemployment Rate is projected to hold steady at 4.1%
DOLLAR DX up: 104.39 +0.28% (103.94 – 104.44) HIGHS
EUR
EUR/USD dipped below 1.08, with weakness ramping up in response to the release of European PMI Mfg data for July, which France and Spain disappoint, while EZ and Germany beat. That said, EZ the EZ Unemployment Rate surprisingly ticked higher to 6.5%, although, movement in the cross was sustained, with losses resuming after the poor US ISM data, which saw the cross test the earlier mentioned trough.
EUR up: 92.67 +0.36% (92.27 – 92.75) Off HIGHS
GBP:
The BoE cut rates by 25bps to 5%, as expected, with 5 voting to cut, and 4 dissenting. Looking ahead, the BoE cut its 2024 inflation forecast by 25bps to 2.5%, though raised 2024 growth to 1.25% (prev. 0.5%). In terms of remarks, BoE Governor Bailey said the decision was finely balanced, and said he would not give any view on the future path of rates and the market curve.
Cable was little changed, but made fresh session lows of 1.2728 later in the session amid the aforementioned Dollar strength and risk-averse sentiment.
BoE pricing sees 1 more full 25bps cut by year-end. Meanwhile, UK’S S&P Global Mfg PMI (July) was above expectations.
GBP down: 127.90 -0.90% (128.58 – 127.27) LOWS
AUD:
All eyes this morn on PPI
AUD down: 65.01 -0.65% (65.60 – 64.90) Off LOWS
YEN:
Nothing of note.
JPY down: 149.34 –0.38% (150.87 – 149.27) LOWS
GOLD/METALS:
Relatively QUIET vs Equities and Bonds
GOLD up: $2489 ++0.68% (2474 – 2506) MID
BONDS:
The 10-year Treasury yield fell below 4% for the first time since February on Thursday after a manufacturing gauge and jobless claims data added to evidence that the US labor market is cooling. The market move precedes Friday’s release of broader US employment data for July, which will be closely watched by traders and policymakers alike.
Swaps traders fully priced in 75 basis points worth of easing by the Fed this year — anticipating a quarter-point reduction at each of its three remaining policy meetings. Fed Chair Jerome Powell, discussing in a news conference Wednesday the decision to hold rates steady as expected, said a rate cut “could be on the table” at the next meeting on Sept. 18 unless the economy’s performance in the meantime favors waiting.
EQUITIES:
– Small Caps crashed 4%, Nasdaq 3% and The Dow and S&P down 2%
– The S&P broke back below its 50DMA
– Nasdaq dumped back to its 100DMA
– Mag7 stocks lost $430BN in market cap today – a MASSIVE reversal from the 2.5% initial rally, thanks to META, to then dropping almost 5% from the morning highs
EUR:
– DAX -2.30% 18,083
– FTSE -1.01% 8,283
– CAC -2.14% 7,370
– ES50 -2.30% 4,761
US:
– SPX -1.4% 5,447
– NDX -2.4% 18,890
– DJIA -1.2% 40,348
– RUT -3% 2,186
Sectors (W to S): Technology -3.36%, Energy -2.56%, Consumer Discretionary -2.25%, Industrials -1.83%, Financials -1.38%, Materials -0.35%, Communication Services +0.89%, Health +1.06%, Consumer Staples +1.09%, Real Estate +1.58%, Utilities +1.85%.
STOCKS:
– See above (Companies)
OIL:
WTI (U4) SETTLED USD 1.60 LOWER AT 76.31/BBL; BRENT (V4) SETTLED USD 1.32 LOWER AT 79.52/BBL
The crude complex was lower on Thursday and weighed on by the broad risk-averse sentiment and flight-to-quality trade. Before this, WTI and Brent saw notable strength through the European session and printed highs of USD 78.88/bbl and 81.80/bbl, respectively, amid geopolitical risk premium, as tensions remain heightened following Israel’s recent strikes in the Lebanese and Iranian capitals. As such, participants are on the lookout for a response from the regions, where some have warned that a joint response against Israel could be on the cards. The latest from the Hezbollah leader was that the battle with Israel has entered a new phase. However, after the soft US ISM Manufacturing PMI which sparked the initial risk-off sentiment, it has been one-way traffic through the US afternoon, with US indices dumping, Dollar bid, and clear flight to quality trade leaving WTI and Brent to tumble into settlement, therefore settling at lows. For the record, no action was seen on a non-event OPEC+ JMMC meeting, which made no policy change recommendations, as widely telegraphed. Looking ahead, there is US NFP on Friday, weekly Baker Hughes rig count, in addition to Chevron and Exxon earnings. Oil report courtesy of newsquak.
CRUDE down: $76.93 -1.26% (78.83 – 76.26) Off LOWS
BOND YIELDS:
US 1-MO 5.348 -0.021
US 6-MO 5.019 -0.019
US 1-YR 4.622 -0.166
US 5-YR 3.843 -0.153
US 10-YR 3.981 -0.123
US 30-YR 4.28 -0.087
2YR/10YR -0.17
CRYPTO
Massive BTC SURGE into close
Looking at the bigger picture, bitcoin’s pump to $70,000 on Monday followed the excitement of the Bitcoin 2024 conference in Nashville and the pledge of GOP nominee Donald Trump to be supportive of all things Bitcoin and even consider having the government hold the crypto as a strategic asset.
That’s all well and good, but bitcoin bulls now need to consider that Trump’s victory chances are not what they were two weeks ago when his foe was to be Joe Biden. New Democratic nominee-apparent Kamala Harris’ odds of winning the election have steadily risen throughout the week to the current 44%, according to Polymarket. Trump’s victory chances have faded to 55% versus 70% just two weeks ago.
Whether a Harris administration would fight Bitcoin and crypto with the same ferocity as that of the Biden administration remains to be seen, but the odds of an industry-friendly new president in 2025 have gone down.
CRYPTO: BTC/ETH SQUEEZE/down 64788 UNCH, 3165 -2%
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=iG1GNbtIUWI
On this day:
Aug 1st
1944: Anne Frank writes her last diary entry
1948: Columbus first sets eyes on South America, thinks its an island.
(Seize all assets of Duke and Duke enterprises)
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