Source: Wall Street News
summary
Some of the Federal Reserve's voting committee hinted at ending the interest rate hike cycle this year, but risk sentiment ebbed, and the S&P and NASDAQ fell for five days in six trading days.
Moody's downgraded the credit ratings of small to medium banks in the US. At one point, the Bank of America stock index fell 4%. Italy plans to levy bank profiteering taxes. The European stock banking sector fell 2.7%, and the Italian stock index fell more than 7%. At one point, the China Securities Index fell more than 4%, and Ideal Auto fell more than 8%.
The yield on 10-year US Treasury bonds fell as deep as 10 basis points and fell below 4% at one point, while the yield on European long-term bonds fell by more than 10 basis points. Concerns about demand prospects caused oil prices to drop by $2 during the day. At the end of the session, they turned up and rose more than 1%, while US oil returned to $80.
The US dollar rose the most in two weeks, reaching a high level in nearly a month. At one point, the offshore renminbi fell below 7.25 yuan. Spot gold fell below $1,930 to a four-week low, London Metals fell more than 1% across the board, and Lundong fell to a low level in nearly a month.
This year's voting committee chairman Huck of the Philadelphia Federal Reserve said that without any worrying new data from now until mid-September, the Fed may end interest rate hikes and be at a point where sustainable interest rates remain unchanged, echoing the market's expectations that July is the last rate hike in the current cycle.
Next year's Voting Committee and Richmond Federal Reserve Chairman Barkin said that the data will be monitored before the September FOMC meeting and they don't want to predict interest rate trends. There is still a “structural shortage” of skilled workers in the US, the inflation rate is still too high, and he is skeptical about AI's significant increase in productivity.
The US trade deficit narrowed to a three-month low of US$65.5 billion in June, and imports fell 1% to their lowest level since 2021, reflecting a further slowdown in consumer demand for commodities and a 0.1% drop in exports. Wholesale sales and inventories both fell month-on-month in June and fell short of expectations.
German inflation cooled as scheduled in July, and expectations that the European Central Bank would suspend interest rate hikes in September have further heated up. According to the ECB survey, Eurozone consumers expect inflation to continue to cool in the next few months and years in June, but they are pessimistic about real income growth and housing prices.
According to CME's Federal Reserve observation tool, traders expect the probability of not raising interest rates in September to remain as high as 86%, the probability that interest rates will remain unchanged until January next year is close to 47%, and the probability of cutting interest rates by 25 basis points is close to 31%
The S&P and NASDAQ fell on the fifth day of six trading days. The shares of China and the US fell by more than 1% in the intraday period, and Ideal Auto fell to new highs
On Tuesday, August 8, multiple factors, such as weak Asian trade data, Moody's downgrading the credit ratings of 10 US small and medium-sized banks, and the Italian government's plan to levy a “profiteering tax” on banks, seriously dampened risk appetite.
US stocks opened lower collectively, and the Dow and NASDAQ fell by about 120 points at the opening of the session. Nearly an hour after opening, the Dow's decline widened to over 460 points or 1.3%, forcing the 35,000 point integer level. The major US stock indices fell more than 1% across the board.
The S&P market fell 1.2% the deepest and fell below 4,500 points, the NASDAQ fell 1.6% the deepest, and Russell small-cap stocks fell 1.8% the deepest.The decline in US stocks narrowed significantly at the end of the session.They both broke away from their weekly highs. The S&P and NASDAQ stopped falling for four days yesterday, and the Dow stopped falling for three consecutive days yesterday and hit their best performance since June 15, approaching the highest since February 9 of last year, which was set last Tuesday. Small-cap stocks hit their lowest level in nearly four weeks:
The S&P 500 index closed down 19.06 points, or 0.42%, to 4499.38 points. The Dow closed down 158.64 points, or 0.45%, to 35314.49 points. The NASDAQ closed down 110.07 points, or 0.79%, to 13884.32 points. The NASDAQ 100 fell 0.9%, and the Russell 2000 small-cap index fell 0.6%.
Chinese and American stocks fell by more than 1% in the intraday period. The decline narrowed significantly at the end of the session. The NASDAQ led the decline in major indices throughout the day
S&P's 11 sectors generally declined, with raw materials falling more than 1%, optional consumption and finance falling 0.9%, information technology/technology falling 0.8%, telecommunications services falling 0.2%, the energy and utilities sector rising 0.5%, and the healthcare sector rising 0.8%.
Many mainstream Wall Street analysts expressed caution about the stock market.
Andrew Garthwaite, a global stock strategist at Credit Suisse, said his views on the stock market are “becoming more pessimistic,” and that the US may experience a recession next year. Bank of America's Stephen Suttmeier said that a tactical pullback is already underway. Marko Kolanovic, chief global market strategist at J.P. Morgan Chase, advised investors to continue reducing stock holdings and said people may be too optimistic about the state of the economy.
However, Ed Moya, a senior market analyst at foreign exchange broker Oanda, said that the sudden “bleak” global macroeconomic background heats up hopes that the Fed will stop raising interest rates. The possibility of interest rate hikes in September and November continues to decline, and the probability of interest rate cuts starting in 2024 continues to increase.
Star Tech stocks generally fell, but the decline narrowed at the end of the session.The “metaverse” Meta fell more than 1%, Amazon fell 1.6% to break out of a one-year high, Netflix fell 0.6%, Microsoft fell 1.2% back to a two-month low, Google A almost erased the 1.5% decline close to a rise, Tesla fell 0.7%, falling 0.7%, falling to the lowest level for three days to six weeks; Apple turned up 0.5% after falling 0.7%, stopping a five-day continuous decline from its two-month low.
Chip stocks also fell sharply, but the decline narrowed at the end of the session.The Philadelphia Semiconductor Index fell 1.6% and fell below 3,700 points, and AMD fell 3%, all breaking away from their monthly highs. Intel fell 0.6%, while US stocks of Nvidia and TSMC fell nearly 2%.
AI concept stock pullback. C3.ai fell nearly 2%, falling for five days to its lowest level in the past six weeks, Palantir Technologies fell more than 5%, the highest since November 2021, BigBear.AI fell more than 3%, and Soundhound.ai fell 2%, all close to their lowest level in four and a half months.
According to the news, the data analysis company Palantir Technologies released a favorable second-quarter report and raised its annual revenue guidelines after the market on Monday, saying it saw commercialization opportunities for the artificial intelligence platform AIP, but some analysts questioned whether it was an “authentic AI stock.”
The popular Chinese stock market generally fell and the decline narrowed at the end of the session, following the trend of the US stock market.ETFs KWEB and CQQQ fell 2%, and the Nasdaq Golden Dragon China Index (HXC) closed down 2.4% after falling more than 4%, falling below 7,400 points, the lowest in the past two weeks since July 27.
Among Nasdaq's 100 constituent stocks, JD, Baidu, and Pinduoduo all fell more than 2%. Among other individual stocks, Alibaba and B fell 2.4%, while Tencent's ADR fell more than 1%. NIO and Xiaopeng Motor fell 5% to a new low in the past two weeks, while Ideal Auto, which had favorable financial reports, fell 8.6% away from yesterday's record high. The daily premium fell nearly 19%, rose nearly 32% on Monday, and rose nearly 285% last Friday. Ideal Q2 had the best quarterly profit in history, and Q3 deliveries are expected to exceed 100,000 vehicles.
Bank stock indexes all fell 4% and then closed down more than 1% to their lowest level in a week.The industry benchmark Philadelphia Stock Exchange KBW Bank Index (BKX) hit its lowest level since October 2020 on May 4. The KBW Nasdaq Regional Bank Index (KRX) broke away from its high level since March 9 and hit its lowest level since November 2020 on May 11; the SPDR S&P Regional Bank ETF (KRE) broke away from its high level since March 10 and hit its lowest level since October 2020 on May 4.
The “big four US banks” fell sharply and Bank of America fell 2% the worst, while Goldman Sachs fell 3.8% the deepest and led the decline in the Dow's constituent stocks.Among the key regional banks,PacWest Bancorp (PacWest Bancorp) closed down 1.4% after falling 4%, Western Alliance Bancorp (Western Alliance Bancorp) closed down more than 1% after falling 5%, and Zions Bancorporation rose slightly after falling nearly 6%.
According to the news, Moody's downgraded the ratings of 10 US small and medium-sized banks, including M&T Bank, Pinnacle Financial, BOK Financial, and Webster Financial, on the grounds that deposit risks, potential decline, and commercial real estate are in trouble, and include large financial institutions Bank of New York Mellon, United States Bank, State Bank of America, State Bank of America, Truist Financial, Cullen/Frost Bankers, and Northern Trust in the downgrade The watch list adjusted the prospects of 11 banks, including First Capital, Secured Financial, and Fifth Fifth Bancorp, to a negative one.
Other individual stocks that have changed a lot include:
The net profit of the American online car-hailing company Lyft from EBITDA in the second quarter was better than expected. The market originally expected losses, up 13% after the market.
After falling nearly 16%, US superconductivity closed down more than 13%, the lowest in the past two weeks since July 27. The room-temperature superconductivity concept may be “punishable by death.” Peking University, the National University of Science and Technology, and others strongly proved that the LK-99 semi-suspended sample was not superconducting; it was actually a ferromagnetic material; South Korea's so-called breakthrough in superconductivity technology was also refuted by American peers, causing South Korea's superconducting concept stock to plummet on Tuesday.
Global freight giant UPS closed down nearly 1% after falling more than 3% to the lowest level in a month. EPS in the second quarter exceeded expectations, but revenue fell 11% year on year and fell short of expectations. The chief financial officer said it cut costs and cut 2,500 management staff, and lowered its full-year revenue and profit margin forecasts. The company expects labor negotiations and an interim agreement with the truckers' union will raise costs and affect freight volumes.
Beyond Meat, the “first stock of artificial meat in the US stock,” closed down more than 14% after falling 22%. Due to weak demand in the US market, net revenue for the second quarter fell short of expectations and lowered the full-year performance guidelines. The loss per share for the quarter was slightly stronger than expected.
Education tech company Chegg closed up more than 4% after rising nearly 31%, approaching a two-month high. Second quarter revenue exceeded expectations and outlined a strategic plan to integrate artificial intelligence, but earnings per share for the quarter fell slightly short of expectations.
Luxury electric vehicle manufacturer Lucid Group broke away from a six-week low by more than 12%. Due to poor delivery volume of Air electric limousines, second-quarter revenue fell short of expectations, and losses also exceeded expectations and increased year-on-year, but the review is expected to produce more than 10,000 cars per year.
Pharmaceutical stocks fluctuated a lot today. Novavax Pharmaceuticals once surged more than 30% before the market. After opening over 17%, it fell nearly 4%. It fell for six consecutive days to a new low of one month. Second quarter revenue far exceeded market estimates. Lilly Pharmaceuticals closed up nearly 15% after rising more than 18%, hitting a record high in intraday and closing records. Revenue and profit for the second quarter were better than expected, with a cumulative increase of over 40% this year.
Another factor driving the surge in Danish competitor Novo Nordisk (Novo Nordisk)'s European and US stocks both rose more than 17%, and US stocks reached record highs. Key test data showed that its diet drug Wegovy can reduce the risk of obese adults suffering from major cardiovascular diseases such as heart disease or stroke by 20%, boosting the European and American pharmaceutical sector and causing European healthcare stocks to rise more than 3% against the market.
European stocks generally fell. The pan-European Stoxx 600 index closed down 0.23%, the Eurozone Stoxx 50 index and the German stock index both fell more than 1%, the Italian stock index fell more than 2%, and the Italian banking sector, which was hit hard by the “profiteering tax” plan, plummeted 7.6%. The Bank of Europe index fell 2.7%, the basic resources index fell 1.8%, and the automotive, technology, industrial and financial sectors all fell by about 1%.
Yields on European and American long-term bonds fell sharply. The yield on 10-year US Treasury bonds fell nearly 10 basis points at the deepest point and fell below 4% at one point
At the beginning of the US stock market, US bond yields resumed their decline, and long-term yields fell even deeper. After midday trading, the two-year yield, which is more sensitive to monetary policy, rose slightly and returned to 4.76%, still hovering at the three-week low since July 20.
The 10-year benchmark US bond yield, which is the “anchor of global asset pricing,” fell nearly 10 basis points at the deepest point and fell below the 4% mark at one point. The decline was cut in half after midday trading, basically erasing the gains since last Wednesday. Yields on 7-30 year US bonds all fell by more than 7 basis points.
The 10-year US Treasury yield fell the deepest by nearly 10 basis points and fell below 4% at one point
The Eurozone benchmark 10-year and 30-year German long-term bond yields both fell more than 13 basis points. The 10-year yield dropped 2.44% to hit a low of nearly two weeks since July 27. The two-year yield fell 7 basis points, and the inversion with interest spreads on base bonds was nearly the narrowest in two months.
The yield on 10-year Italian bonds, which is the benchmark for heavily indebted peripheral countries, also fell more than 10 basis points, a sharp drop from the three-week high last Friday. The two-year yield fell more than 9 basis points to its lowest level in the past two months. The yield on UK long-term bonds over 10 years generally fell by more than 7 basis points.
According to some analysts, rising safe-haven demand is depressing European and US bond yields. At the same time, the European economic background is even more worrying, causing expectations of interest rate cuts in the Eurozone to rise at an accelerated pace. There is no shortage of people who expect the ECB to start cutting interest rates before the Federal Reserve, which will also accelerate the downward trend in yield.
Concerns about demand prospects caused oil prices to drop by $2 during the day. At the end of the session, they turned up and rose more than 1%. US oil returned to $80
After the release of Asian trade data, concerns about demand prospects caused international oil prices to drop by 2 US dollars during the day, then turned up and rose more than 1% at the end of the session.
WTI crude oil futures for September closed up $0.98, or 1.20%, to $82.92 per barrel. Brent's October futures closed up $0.83, or 0.97%, to $86.17 per barrel.
The US oil WTI fell 2.4% at its deepest and fell below the mental integer of $80 at one point. After turning up, Brent fell 2.4% at its deepest and fell to $83. After the reversal, it came back to 86 US dollars, all close to the four-month high set in yesterday's intraday session since the beginning of April.
The monthly report of the US Energy Information Administration EIA predicts that in 2023, US GDP will grow by 1.9%, higher than the previous forecast of 1.5%. The average price of oil is estimated to be 86 US dollars in the second half of the year, up about 7 US dollars from the previous forecast, but US oil production may reach a record high of 12.76 million b/d this year.
Factors that lowered oil prices earlier include: China's oil imports fell 18.8% month-on-month in July, the lowest daily average since January, but still increased 17% year over year. Fuel consumption in India, the world's third-largest oil importer and consumer, fell to its lowest level in ten months in July due to monsoon rainfall restrictions. However, some analysts are still optimistic about the outlook for fuel demand in China from August to early October. Others claim that due to increased production in OPEC member countries such as Libya and Venezuela, OPEC+'s actual reduction in market supply may be lower than expected.
The European benchmark TTF Dutch gas futures rose nearly 2%, standing steady above the €30 per megawatt-hour integer, and fell more than 25% in July. ICE British gas, which rose 6% yesterday, rose another 2%. It fell more than 27% in July, and at one point approached its lowest level in the past two years since September 2021.
Non-US currencies generally fell. The US dollar rose the most in two weeks and reached a high level in nearly a month. At one point, the offshore renminbi fell nearly 500 points and fell below 7.25 yuan
The US dollar generally rose against non-US currencies, boosted by safe-haven demand. The DXY, which measures a basket of the US dollar against the six major currencies, rose 0.7% to 102.80, close to the highest in the past month since July 7, which was set last Thursday, and the biggest one-day increase in two weeks.
The euro fell 0.5% against the US dollar and fell below the 1.10 mark, basically erasing gains since last Friday. The pound fell 0.8% or nearly 100 points against the US dollar. At one point, it fell below 1.27. The survey showed that the sales growth of British retailers in July was the slowest in 11 months.
The yen fell 0.7% against the US dollar and fell below 143, the lowest since July 7. The Swedish krona and Norwegian krone, which are sensitive to risk sentiment, both declined, with both the Australian dollar and the New Zealand dollar falling 1% to their lowest level in two months.
The offshore renminbi once fell below 7.25 yuan, down nearly 490 points or 0.7% from the deepest closing of the previous day. US stocks reached 7.24 yuan after noon trading, still hitting a four-week low since July 7. At one point, the onshore renminbi fell below 7.22 yuan against the US dollar, hitting a three-week low.
Brad Bechtel (Brad Bechtel), head of global foreign exchange at Jefferies Group (Jefferies) in New York, said that the latest economic data shows that the global outlook is deteriorating, boosting safe-haven demand for the US dollar. “Export data for Asia as a whole is very sluggish.”
Mainstream cryptocurrencies have soared.Bitcoin, the leader in market capitalization, rose 2.5% and pushed the $30,000 integer mark, significantly breaking away from the seven-week low and hitting a new two-week high since July 23. The second-largest Ethereum also rose 2% and rose above $1,850.
Spot gold fell below $1,930 to a four-week low, London Industrial Metals fell more than 1% across the board, and Lundtong fell to a low level in the past month
A higher dollar weighed on commodity prices. COMEX September gold futures closed down 0.51% to $1930.80 per ounce; October futures fell 0.51% to $194.50 per ounce. Silver futures fell 1.8% and fell below $23/oz.
Spot gold fell as deep as 14 US dollars or 0.7%, falling below the integer level of 1,930 US dollars to a four-week low since July 10, and fell for two consecutive days, all reflecting poor market sentiment.
Ole Hansen, head of commodity strategy at Saxo Bank of Denmark, said that the recent rise in US bond yields and the Fed's voting committee Bauman's statement that further interest rate hikes may be needed have put pressure on the price of gold. The holdings of GLD, the world's largest gold ETF, fell to their lowest level in five months on Monday.
Uncertain demand prospects and a stronger dollar have caused London's industrial base metals to decline. The economic weather vane “Dr. Copper” fell 137 US dollars or 1.6%, falling below 8,400 US dollars to a new low of nearly a month since July 11, and fell for three consecutive days.
Lundum aluminum fell 1.3% to 2,200 US dollars, a drop of 0.6%, all hitting new three-week lows, and Lun-zinc fell 1.6% to a low level in the past two weeks. Rennickel fell 1.2% and fell below 21,000 US dollars, reaching its lowest level in more than two weeks. Lensk fell 1.6% to its lowest level in over a month since July.
Editor/jayden