1. Before the US stock market on August 31 (Thursday), futures on the three major US stock indexes rose sharply. As of press release, Dow futures rose 0.45%, S&P 500 futures rose 0.24%, and NASDAQ futures rose 0.12%.
2. As of press release, the German DAX index is up 0.83%, the British FTSE 100 index is up 0.18%, the French CAC40 index is up 0.10%, and the European Stoxx 50 index is up 0.35%.
3. As of press release, WTI crude oil rose 0.82% to $82.30 per barrel. Brent crude oil rose 0.73% to $85.86 per barrel.
Market news
The PCE price index favored by the Federal Reserve will be announced tonight.Federal Reserve Chairman Powell's favorite key indicator for measuring inflation in the service sector — the July core PCE price index will be announced at 8:30 tonight. There are less than three weeks until the Fed's interest rate meeting in September. After the Jackson Hole Global Central Bank Annual Meeting, the market turned its attention to key inflation reports and employment data to find more clues. Considering factors such as fluctuations in energy prices, it is expected that the consumer spending price index (PCE) for July may rise slightly tonight. Wall Street's latest forecast shows that inflation will rebound slightly in July, PCE will rise to 3.3%, and core PCE will rise to 4.2%. It is worth mentioning that according to the Cleveland Fed's inflation model, due to fluctuations in food and energy prices since July, overall inflation may continue to rise slightly in the future. In contrast, core inflation is still cooling slowly.
US supercore inflation may accelerate in July, and the rise in the stock market has become the “culprit.”The rise in US stocks in July was certainly gratifying for investors, but it could be a threat to the US Federal Reserve, which has always sought to make continued progress in containing inflation. Forecasters such as Omair Sharif, president of Insights Insights LLC, and Skanda Amarnath of the US think tank Insights America, said that a narrower measure of inflation that the Fed is concerned about — supercore inflation — is expected to rise 0.5% month-on-month in July, while the month-on-month increases in the previous two months were relatively moderate, both 0.2%. People such as Omair Sharif and Skanda Amarnath said that the prices of portfolio management and investment advisory services (which are part of a basket that mainly tracks stock price trends) will be almost all of the reasons for the rise in supercore inflation.
Stronger than tech stocks! Wall Street says the rise in US real estate builders will still be impressive over the next 12 months.The rise in US housing construction stocks this year even surpassed the technology boom driven by artificial intelligence. According to analysts' predictions, this strong performance is likely to continue. Wall Street's price target shows that the return potential for US real estate builders is expected to be 16% over the next 12 months, ahead of 13% of the Nasdaq 100 index, which is dominated by large capitalization and technology stocks. Builders shares soared 47% in 2023, already surpassing the Nasdaq index's 41% gain. So far this year, the stock prices of MIHO.US (MIHO.US) and Green Brick Partners (GRBK.US) have more than doubled. Although high interest rates over the past few decades have hindered second-hand housing sales, market concerns about the recession are waning, and analysts are optimistic about the earnings prospects of real estate builders.
Wall Street bulls: US stocks will begin a month-long rebound, and the S&P 500 is expected to return to this year's high.Tom Lee, co-founder and head of research at US investment agency Fundstrat Global Advisors, said that US stocks are about to begin a month-long rebound, which may return the S&P 500 index to its high in 2023. Although Wall Street generally believes that the performance of US stocks will be weak in September, the analyst expects the S&P 500 index to rise 2%-3% next month, recapture the level of 4,600 points, and recover the losses lost in August. Earlier, Lee also predicted that the benchmark index would reach a record high this year. Lee is still one of Wall Street's most optimistic forecasters. In a previous report, he predicted that the S&P 500 index would hit a record high of 4,825 points this year. It's worth mentioning that he made a similar forecast last year, but the benchmark index actually recorded its worst performance since 2008.
Has the US dollar entered a downward channel? Societe Generale strategist: It's too early to say!The dollar fell to its lowest point in more than two weeks, reigniting debate about whether the US dollar is on the brink of continued downturn. According to Société Générale strategist Kit Juckes, it is still too early to make such a judgment before the US releases its monthly non-farm payrolls report on Friday. Juckes said: “If the data released on Friday is strong, the dollar will rebound. Although I'd love to accept the fact that the dollar is weakening, I really can't do it right now.” The US dollar has rebounded from a low of more than a year that it hit in mid-July, as strong job markets and economic resilience have boosted expectations that the Fed will maintain high interest rates for a longer period of time. This round of gains overturned the predictions of many strategists at the beginning of last month. At the time, they believed that the US dollar was on the verge of a weak trend that had continued for many years. However, the situation was reversed this week, and the newly released employment data was weak.
Inflation in the Eurozone has stopped slowing, and the ECB is once again in a dilemma.Eurozone inflation stopped slowing in August, leaving ECB officials in a dilemma when weighing whether inflationary pressure was too stubborn to risk suspending interest rate hikes. Affected by energy factors, the Eurozone CPI rose 5.3% year on year in August, the same as last month. It is still more than 2.5 times higher than the target level set by policymakers, and is also higher than the continued slowdown expected by economists. The potential inflation index, which excludes volatile items, slowed as expected, to 5.3%, exactly the same level as the overall indicator. However, traders continue to reduce their bets on the ECB to further raise borrowing costs and focus on slowing core inflation. Previously, inflation data for Germany and France, the largest economies in the Eurozone, were higher than expected, but this did not affect the overall slowdown in potential inflation.
Individual stock news
SafeTime (CRM.US)'s Q2 performance exceeded expectations, raising the guidelines for the whole year.Saifushi's Q2 revenue was US$8.6 billion, up 11% year on year, higher than market expectations of US$8.53 billion; net profit of US$1,267 million, compared to US$68 million for the same period last year; adjusted earnings per share of US$2.12, higher than market expectations of US$1.90. The operating margin was 31.6%. As of July 31, Saifushi had 70,456 full-time employees, a decrease of 10% over the same period last year. The software giant announced revenue and profit guidelines for the third fiscal quarter both higher than market expectations, indicating progress in cost reduction actions and calming some concerns about a slowdown in sales. Saifushi predicts that in the third fiscal quarter ending October, revenue will be about US$8.71 billion, up 11% year on year, better than analysts' average expectations of US$8.66 billion; the current growth rate of remaining performance obligations (that is, contract sales) is slightly higher than 11%, in line with analysts' expectations.
UBS (UBS.US) Q2 net profit reached 29 billion US dollars, and is expected to fully integrate Credit Suisse's business in Switzerland by next year.UBS achieved the highest quarterly profit ever as a bank in the second quarter and confirmed that it will fully integrate Credit Suisse's Swiss operations by next year. UBS's net profit for the second quarter reached about 29 billion US dollars. This is the result of the accounting difference between the price of about 3 billion US dollars paid by UBS to acquire Credit Suisse and the value of the acquired bank's balance sheet. According to the bank, this result mainly reflects the loss of goodwill of the US$28.93 billion generated by the acquisition of Credit Suisse. Excluding negative goodwill, integration-related expenses, and acquisition costs, the bank's basic profit before tax was 1.1 billion US dollars. According to reports, UBS's accounting revenue of 29 billion US dollars exceeded the profit of 14.3 billion US dollars achieved by J.P. Morgan Chase (JPM.US) in the first quarter of 2021. This is the highest modern record for US and European banks.
Total revenue of 36 krypton (KRKR.US) 2023 Q2 increased steadily, and gross margin rebounded strongly to 55%.In the second quarter of this year, 36 Krypton achieved total revenue of 84.36 million yuan, an increase of 3% over the previous year. Among them, enterprise value-added service revenue reached 16.75 million yuan, an increase of 17% over the previous year, and subscription service revenue reached 10.6 million yuan, an increase of 11% over the previous year. The company applied AI technology to improve business efficiency, and gross margin rebounded strongly to 55.4%. This quarter, the number of popular articles continued to rise, reaching 160 articles with 100,000+ readings, and related content received recognition from industry practitioners, experts, and readers. The continuous output of high-quality content has driven the long-term growth in the volume and stickiness of 36 krypton users. By the end of this quarter, the number of followers on the 36Krypton network had exceeded 30 million, an increase of 21% over the previous year, achieving 9 consecutive quarters of growth.
Aurora (JG.US) Q2 revenue fell 4% year over year, and net loss to 23 million yuan.Aurora Q2 revenue was 73.3 million yuan, down 4% year on year; net loss attributable to Aurora shareholders was 23 million yuan, and net loss attributable to Aurora shareholders for the same period in 2022 was 23.4 million yuan. Revenue costs were 25.6 million yuan, up 13% year on year; gross profit was 47.7 million yuan, down 11% year on year; total operating expenses were 64.1 million yuan, down 27% year on year. Net loss was RMB 23.7 million, while net loss for the same period in 2022 was RMB 24.4 million. The adjusted (non-GAAP) net loss was $8.9 million, compared to $16.9 million for the same period in 2022; the adjusted (non-GAAP) EBITDA was $4.6 million, and the loss for the same period in 2022 was RMB 8 million. As of June 30, 2023, cash and cash equivalents and restricted funds held by the company were $81.1 million, and as of December 31, 2022, $116.3 million.
Shell (BEKE.US)'s mid-year net revenue for 2023 increased 51% year over year, and net profit was 4,049 billion yuan, turning loss into profit year over year.Shell's net revenue for the medium term in 2023 was RMB 39.8 billion (same unit below), an increase of 51.0% over the previous year. Net profit was $4,049 billion, and net loss for the same period in 2022 was $2,485 million. The adjusted net profit was $5.925 billion, and the adjusted net loss for the same period in 2022 was $592 million. It is proposed to pay a special cash dividend of $0.057 per common share or $0.171 per American Depositary Share. In the first half of 2023, the total transaction volume of stock housing transactions was RMB 1,120.8 billion, an increase of 46.0% over RMB 767.6 billion in the same period in 2022. The total transaction volume of new housing transactions was RMB 572.9 billion, an increase of 37.9% over RMB 415.4 billion in the same period in 2022. The gross margin for the first half of 2023 was 29.4%, compared to 18.7% for the same period in 2022.
Qin Huai Data (CD.US) Q2 increased 49.7% year over year, reaffirming the guidelines for the full year of 2023.Qin Huai Data's revenue for the second quarter of 2023 was 1,553.8 billion yuan, up 49.7% year on year; net revenue was 219.2 million yuan, up 9.8% year on year. The company's adjusted EBITDA for the second quarter of 2023 increased 49.9% year over year to $816.1 million, with a profit margin of 52.5%. In terms of performance guidelines, the company reiterated its 2023 revenue guidelines of $5.88 billion to $6.08 billion, and the adjusted EBITDA guidelines for 2023 were $3.1 billion to $3.22 billion.
Zhiwen Group (MOMO.US) Q2 net revenue increased 0.9% year over year, exceeding expectations, and net profit increased 64% year over year.In the second quarter of 2023, Zhiwen Group's net revenue reached 3,137.7 million yuan (about US$432.7 million), an increase of 0.9% over the previous year, higher than Wall Street's forecast of 3,039 billion yuan. Net profit attributable to Zhiwen Group was 568.4 million yuan (about 78.4 million US dollars), an increase of 64% over the previous year. Not measured in accordance with US GAAP, net profit attributable to Zhiwen Group was 632.1 million yuan (about 87.2 million US dollars), an increase of 36% over the previous year. Net diluted profit per share of American Depositary Shares (ADS) was $2.82 (approximately $0.39), not measured in accordance with US GAAP, and $3.14 (approximately $0.43) per ADS diluted net profit.
Burning Stone Medicine (BNR.US) had Q2 revenue of 146.3 million yuan, an increase of 11.8% over the previous year.Burning Stone Medical's second-quarter results achieved revenue of 146.3 million yuan, an increase of 11.8% over the previous year, and gross profit of 100.4 million yuan, an increase of 21.6% over the previous year. Among them, revenue from in-hospital testing channels for cancer patients increased by 57.5% compared to the same period in 2022, and revenue from pharmaceutical companies' cooperative business increased by 44.9% compared to the same period in 2022. In the second quarter of 2023, incineration medicine was continuously upgraded and cost optimized. Operating expenses were 236.1 million yuan, a year-on-year decrease of 32.2%. R&D expenses were 95.78 million yuan, up 4.0% from 92.11 million yuan in the same period in 2022, accounting for about 65% of revenue. Sales and marketing expenses were 70.84 million yuan, down 32.9% year on year; general and administrative expenses were 69.53 million yuan, down 53.7% year on year. As of June 30, 2023, the company's cash, cash equivalents, restricted cash and short-term investments amounted to RMB 733.3 million.
Key economic data and event forecasts
20:30 Beijing time: US monthly personal spending rate for July (%), US PCE price index annual rate for July (%), number of US jobless claims at the beginning of the week ending August 26 (10,000).
21:45 Beijing time: US August Chicago PMI.
22:30 Beijing time: US EIA natural gas inventories for the week of August 25.
21:00 Beijing time: 2025 FOMC voting committee and Boston Federal Reserve Chairman Collins delivered a speech.
The next day at 00:00 a.m. Beijing time: ECB Vice President Kindos delivered a speech.
Performance Forecast
Friday morning: Broadcom (AVGO.US), Dell (DELL.US)
Friday Pre-Market: Dingdong Grocery Shopping (DDL.US)