MARKET REPORT
(Unburdened by what has been)
Buers Van Berlage
Day in Review:
Today:
(Kamalanomics):
DATA:
– CPI +0.2% July, +2.9% YoY, matching forecasts for the monthly increase but slightly below the 3% annual estimate. Core inflation, excluding food and energy, also rose 0.2% monthly and 3.2% annually, the slowest pace since April 2021
– Traders continue to bet the Fed will start cutting interest rates in September, but the odds for a 50bps reduction fell slightly to around 44% from 53% yesterday
– Fed Chair Jerome Powell made it clear at the end of last month that a cut in September was “on the table” as long as the data supported it.
– Euro Area GDP grew 0.3% in Q2, unchanged from the previous period and matching preliminary estimates.
– Inflation in the UK came below forecasts, raising bets the BoE will continue to cut interest rates
– Goolsbee more concerned about jobs mandate “on the margin”
COMPANIES:
In 2024, 41.6% of U.S. households’ financial assets are tied to the stock market
– One of the largest food industry mega-deals in nearly a decade was unveiled as snack giant Mars announced a deal to purchase food maker Kellanova for nearly $30 billion. This marks one of the biggest M&A deals this year, second to Capital One Financial’s agreement to purchase Discover Financial Services for $35 billion in February.
– Intel -2.69%
GENERAL:
– Steel hits 8-yr LOW, Palladium 7-year LOW
– Euro Bourses close higher
– Japan’s PM Kishida Announces Resignation Amid Scandals
– Germany Issues 1st arrest warrant in Nord Stream Investigation
– US approves $20B Weapons Sale to Israel.
– 50 F-15 fighter jets and tank munitions, advanced air-to-air missiles, tactical vehicles, and on top of all this 50,000 high-explosive 120mm mortar rounds.
– Former Democratic Representative Tulsi Gabbard is taking legal action against the Biden/Harris Administration after she discovered that she has essentially been placed on a terrorist watch list.
– Hamas will not attend ceasefire talks this week
– Vix down to 16
– Nat Gas +3.01%, Oats +6.63%, OJ +2.26%, Coffee +2.15%, Corn -3.98%, Soybeans -3.48%
– Equities up/mixed, Treasuries mixed, Crude down, Dollar flat, crypto down
DOLLAR DX UNCH: 102.62 UNCH (102.71 – 102.27) HIGHS
– AUD down: 65.98 -0.5% (66.44 – 65.96) LOWS
– EUR down: 90.78 -0.18% (90.99 – 90.50) MID
– GBP down: 128.26 -0.28% (128.62 – 128.21) LOWS
– JPY up: 147.21 +0.31% (146.24 – 147.54) Off HIGHS
GOLD down: $2486 -0.86% (2516 – 2477) Off LOWS
DOW/ES/ND UP/up/up: 40176 +0.72%, 5482 +0.42%, 19143 0.2%
CRYPTO: BTC/ETH DOWN/down: 59161 -2.5%, 2673 -1.25%
CRUDE down: $77.06 -1.65% (79.06 – 76.87) LOWS
Coming Up:
– Japanese GDP, Australian Employment, Chinese Retail Sales/Industrial Output, UK GDP, US NY Fed Manufacturing, Export/Import Prices, IJC, Retail Sales
Speakers:
– Fed’s Musalem, Harker; Norges Bank’s Bache
Earnings:
– Zealand Pharma, Deere, Alibaba, Walmart
MAJORS:
DX:
– The Dollar was choppy to the US CPI data, which was mainly in line with expectations, bar the headline Y/Y which was 2.9%, slightly below the expected 3.0%. Nonetheless, weakness ensued in the dollar index, as it trundled to lows of 102.26, albeit losses vanished as the session progressed
In terms of Fed pricing, it moved modestly hawkish towards the data, now pricing in 34bps of rate cuts at the September meeting (prev. 37) and 104bps of cuts by year-end (prev. 106).
Going forward, attention lies on the Weekly Initial Jobless Claims data on Thursday, which is expected to marginally rise by 2k, while Retail Sales are expected to grow by 0.3% in July after being unchanged in June.
Thursday will also unveil Industrial Production data (Jul), as well as remarks from Fed’s Musalem (2025 Voter, Hawk), and Harker (non-voter).
DOLLAR DX UNCH: 102.62 UNCH (102.71 – 102.27) HIGHS
EUR
– Data releases were contained to the employment side, with Flash Employment Y/Y increasing less than anticipated while the Q/Q metric and GDP Flash Q/Q were in line with expectations.
EUR down: 90.78 -0.18% (90.99 – 90.50) MID
GBP:
– UK CPI data was cooler than expected. As such, Cable initially fell from 1.2860 to 1.2818. Capital Economics said the data is probably not enough to prompt back-to-back rate cuts in September but it does lend some support to their view that CPI inflation will be back below the 2% target next year and that interest rates will fall further and faster than markets expect.
GBP down: 128.26 -0.28% (128.62 – 128.21) LOWS
AUD:
– Australian Employment (Jul) THURSDAY!!!
AUD down: 65.98 -0.5% (66.44 – 65.96) LOWS
YEN:
Nothing of note.
JPY up: 147.21 +0.31% (146.24 – 147.54) Off HIGHS
GOLD/SILVER:
– Gold prices retreated on Wednesday after a report showing inflation fell to its lowest point in more than three years, dampening market hopes for a more aggressive interest rate cut when the Fed meets next month.
The yellow metal was down $20.56 at $2,443 per ounce in a volatile trading session only two days after it appeared on track to challenge its mid-July high of $2,482 per ounce. Silver was also caught up in the whipsaw session, falling by more than 1% to trade at $27.43 per ounce, down $0.41.
GOLD down: $2486 -0.86% (2516 – 2477) Off LOWS
EQUITIES:
EUR:
– DAX +0.38% 17,879
– FTSE +0.56% 8,281
– CAC +0.79% 7,333
– ES50 +0.67% 4,727
US:
– SPX +0.38% 5,455
– NDX +0.09% 19,023
– DJIA +0.61% 40,008
– RUT -0.52% 2,084
Sectors (W to S): Communication Services -0.9%, Consumer Discretionary -0.4%, Utilities -0.1%, Materials flat, Real Estate +0.4%, Industrials +0.4%, Consumer Staples +0.5%, Health +0.5%, Technology +0.6%, Energy +0.7%, Financials +1.3%
STOCKS
– Kellanova (+7.76%) – Mars confirmed earlier reports that is to acquire Kellanova (K) for USD 83.50/shr in cash, for a total consideration of USD 35.9bln. Note, K closed Tuesday at USD 74.50/shr. CEO does not expect antitrust concerns on deal with Mars.
– Apple (+0.2%) – Apple’s key manufacturing partner Foxconn reported better-than-expected profits in Q2, benefitting from strong demand for servers powering AI applications
OIL:
– WTI crude oil futures dropped to $78 per barrel, extending losses for the second day after the EIA reported an unexpected increase in US crude oil stocks. US inventories rose by 1.357 million barrels last week, ending a six-week decline and defying expectations of a 2 million barrel drop. Conversely, gasoline and distillate stockpiles fell more than anticipated. The International Energy Agency’s report indicated that inventory declines will slow in the final quarter, and OPEC lowered its demand forecasts for this year and next due to weak Chinese demand.
Despite these factors, potential supply risks in the Middle East, particularly concerns over Iranian retaliation against Israel, prevented further declines in oil prices.
CRUDE down: $77.06 -1.65% (79.06 – 76.87) LOWS
BONDS:
– Treasuries were mixed with the short-end lagging (2Y +3bps, 30Y -4bps):
– CPI print sending 2Y up to 4.00% where it was firmly rejected
US 1-MO 5.33 +0.006
US 6-MO 4.966 +0.034
US 1-YR 4.437 +0.027
US 5-YR 3.682 UNCH
US 10-YR 3.839 -0.015
US 30-YR 4.129 -0.037
2YR/10YR -0.12
CRYPTO
– Users on popular crypto gambling platform Polymarket have more than $592 million bet on predicting the outcome of the 2024 U.S. presidential election, with a higher volume of money bet on Donald Trump winning the electoral contest than Vice President Kamala Harris. Gamblers have already poured more than $74 million into the possibility of Donald Trump winning the presidency.
According to Polymarket bets, there is a 45% chance of Trump emerging victorious this November, while his opponent, Vice President Kamala Harris, has a 53% likelihood of winning, according to live polling on the betting platform.
Despite Harris’ comparatively higher odds on the prediction market platform, more cryptocurrency has been dumped into Trump’s odds of victory, with crypto enthusiasts only spending $64.8 million on Kamala Harris’ chances compared to more than $74.6 million on Trump’s – representing an almost $10 million difference.
CRYPTO: BTC/ETH DOWN/down: 59161 -2.5%, 2673 -1.25%
KEEP DOING WHATS WORKING
Best of luck out there. Let the market come to you
Post of the day:
https://www.youtube.com/watch?v=XLzo2Hol6ic
Song of the day:
https://www.youtube.com/watch?v=GZ-kXZsUa_w
Joke of the Day:
https://www.youtube.com/watch?v=Kc3-zf7x81o
(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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