In May, US new home sales hit a six-month low. All 31 US banks passed the Federal Reserve's stress tests, paving the way for increased shareholder payouts. The S&P and Nasdaq fully recovered from last Thursday's decline, while the Dow remained slightly up and down from last week's low. The seven sisters in US technology stocks rose, with only Google A's slight drop from an all-time high. Tesla rose 4.8%, Amazon rose 3.9%, and their market cap topped $2 trillion for the first time. Micron Technology had positive financial news but its guidance was not surprising enough, causing a drop of more than 9% after hours. The China concept stocks index rose by 0.4%, still hovering near a ten-week low, with NIO rising more than 6% and Bilibili falling 4.7%.
The US dollar index hit an eight-week high above 106, and the Japanese yen hit its lowest level against the US dollar since 1986. Offshore yuan fell to a seven-month low of 7.30 yuan. The yield of 10-year US Treasuries jumped 8 basis points to a two-week high.
Oil prices rose in late trading, breaking away from a one-week low, with US oil approaching 81 US dollars and Brent oil stabilizing at 85 US dollars. Spot gold fell below $2,300 to its lowest level in nearly three weeks, while silver fell more than 1% before briefly rebounding, and London zinc rose more than 2.4%.
US new home sales in May fell to an annualized 619,000 households, the lowest since November last year, down 11.3% month-on-month. High house prices and persistently high mortgage rates have deterred potential homebuyers, with the average selling price rising to $520,000.
In other economic news, Australia's CPI accelerated to a semi-annual high of 4% in May and rose for three consecutive months. Traders expect a higher chance of further rate hikes in November, which has temporarily pushed up the Australian dollar exchange rate. However, after improving for four consecutive months, the German GfK Consumer Climate Index is expected to fall in July, and the French Consumer Confidence Index has also declined slightly in June.
The European Central Bank's rate-setting committee released a mixed hawkish-dovish statement. Latvian central bank governor Kazaks said there was no need to rush to loosen monetary policy and that interest rate cuts would be gradually implemented, while Finninsh central bank governor Rehn said the market's expectations of two further rate cuts in 2024 were reasonable. There are also reports that the ECB will soon launch the next monetary policy review, which may affect future rate actions and crisis responses.
The results of the annual stress tests by the Fed showed that all 31 banks passed the stress tests, paving the way for increased shareholder returns such as greater dividend payouts and share buybacks. Goldman Sachs fell more than 2% after hours, while Wells Fargo & Co initially fell 1.6% before narrowing losses.
The S&P and Nasdaq rose for two consecutive days, with tech stocks rebounding. Amazon and Microsoft hit new highs, while Nvidia fell 2.8% before turning up 0.3%.
On Wednesday, June 26, the US stock market opened lower, with the Dow falling more than 200 points or 0.5% at one point before turning up and returning to the integer position of 39,000 points. The S&P 500 index fell 0.3% but fluctuated between gains and losses before rising toward the end of the session, while the Nasdaq rose at the beginning of the session and hit a daily high toward the end of the session.
At the close, the S&P and Nasdaq both rose for two consecutive days and fully recovered from the decline since last Thursday to hit a one-week high. The Dow was up slightly but still hovered at a one-week low, completely offsetting the gains since last Thursday:
S&P 500 index rose 8.60 points or 0.16% to 5,477.90. The Dow rose 15.64 points or 0.04% to 39,127.80. Nasdaq rose 87.50 points or 0.49% to 17,805.16.
The Nasdaq 100 rose 0.3%. The Nasdaq Technology Market Value Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 technology industry component stocks, rose 0.3%. The Russell 2000 small-cap stocks fell 0.2%, while the "Panic Index" VIX fell more than 2% to 12.55.
Mark Haefele, chief investment officer of UBS Global Wealth Management, believes that while Nvidia's volatility has affected market sentiment, the structural investment opportunities in artificial intelligence remain intact, as the adoption and monetization trends of AI are positive.
Growth tech stocks rose together, with only Google A falling slightly from its all-time high. The "metaverse" Meta rose 0.5% to an 11-week high, Amazon rose 3.9% to a new all-time high, with a market capitalization exceeding $2 trillion for the first time in history. Tesla rose 4.8% to the highest level in nearly four months, Netflix rose 0.8%, Apple rose 2% and rose for three consecutive days, with a market capitalization of $3.27 trillion ranking second in the US stock market; Microsoft rose 0.3% and hit a new high for two consecutive days, with a market capitalization of $3.36 trillion ranking first in the US stock market.
Chip stocks fell again. After falling 1.4%, the Philadelphia Semiconductor Index fell 0.3%, while the industry ETF SOXX fell 0.4%, both retesting their two-week lows. Nvidia rose 1.6% before turning down 2.8%, eventually rising 0.3% and erasing most of its losses since last Friday. It rose 6.8% yesterday and fell 6.7% on Monday, its largest decline in two months. Its market capitalization of $3.11 trillion ranks third in the U.S. stock market, and the leveraged ETF for Nvidia rose 0.2%; Broadcom rose 0.7% after falling for five consecutive days; Qualcomm fell 2.4% to a one-month low; ARM rose 2.6% to near its high; Taiwan Semiconductor Manufacturing Corporation's US stock fell 0.3%; Lam Research turned up 0.3%, Applied Materials fell 0.9%, and Micron Technology rose nearly 1%, all of which saw new highs last week; Intel fell 0.7% and AMD fell 1.7%.
AI concept stocks rose and fell. CrowdStrike fell 1.7% but is not far from the new high. Oracle fell 0.7% for five consecutive days and came off the new high. SoundHound.ai rose 1.5%, BigBear.ai turned up 3%, C3.ai rose 0.6%, Snowflake rose 4% off the 17-month low, Palantir fell nearly 2%, Adobe rose 0.3%, Dell fell 1.5%, Super Micro Computer fell 1.4%, IBM fell 0.4%.
In terms of news, Nvidia's annual shareholders' meeting voted on CEO Jensen Huang and other senior executive compensation, re-election of 12 directors, and approved PwC as the auditor. Huang Renxun said that the company has completed the transformation from a gaming-centered business to a data center-focused one and plans to open up new AI markets in industrial robots and other fields, and plans to cooperate with every computer manufacturer and cloud provider. Citigroup raised the target price to $150, indicating a potential increase of 19%. Intel showcased the first fully integrated Optical I/O Chiplet, which is expected to revolutionize high-speed data processing for AI infrastructure. YouTube, a subsidiary of Google, is in talks with record companies to train an AI song generator and launch a new AI tool this year. Micron Technology's third-quarter performance exceeded expectations but guidance was not bright enough, and it fell 9% after hours.
Chinese concept stocks rebounded. ETF KWEB approached a 0.3% recovery, CQQQ rose 0.8%, and Nasdaq Golden Dragon China Index (HXC) turned up 0.4%, stabilizing above 5900 points and rising for the second day in eight trading days, still hovering near a ten-week low.
Among popular stocks, JD.com fell more than 1% and closed down 0.2%, Baidu rose 0.6% before turning down 0.4%, and PDD Holdings fell more than 1% again. Alibaba rose 0.5%, Tencent ADR fell 0.3%, Bilibili fell 4.7%, Nio Inc rose more than 6%, Xpeng rose 3.8%, Li Auto Inc rose 2%, Faraday Future rose 73% after rising 130%, and departed from the six-week low. Jia Yueting said that he will strengthen cooperation with Middle Eastern partners.
Other stocks with significant changes include:
FedEx, the economic barometer of the United States, rose more than 15%, its largest increase in two years and its highest stock price in three years. Its fourth-quarter performance exceeded expectations, and profit guidance for fiscal year 2025 is positive, benefiting from cost-cutting measures.
Rivian, the 'Tesla challenger,' rose more than 23% to a four-month high, and it initially rose 37% to its largest increase in two and a half years. Yesterday, it jumped 50% after-hours and received the highest $5 billion investment from Volkswagen to develop 'next-generation' electric vehicles and software. Some analysts believe that Rivian's surge is related to short selling, with about 19% of its outstanding shares sold short before the news. Currently, its year-to-date decline has narrowed from 49% to over 34%.
However, automotive technology company Aptiv fell more than 11% to a four-year low, as Piper Sandler downgraded it to 'reduce,' claiming that Rivian's joint venture with Volkswagen means reducing dependence on intermediaries such as Aptiv in terms of electrical architecture.
Whirlpool, the US white goods giant, opened high and closed up more than 17% to a two-month high. The world's largest automotive supplier, Germany's Bosch, reportedly considers making a takeover offer.
Southwest Airlines of the United States opened low and closed down 0.2%, falling more than 10% before the market. It lowered its YoY revenue decline expectations for the second quarter, stating that consumer booking behavior has changed. Although unit costs will also jump, revenue is expected to reach a new high. Southwest Airlines is facing pressure from Elliott Management, an activist investor, for changing CEO and chairman of the board.
European stocks fell for the second consecutive day, with narrowing declines in the closing, French stocks fell the most and fell more than 1.3% at one point. The pan-European Stoxx 600 index fell 0.56%, the fourth day of decline in eight days, with enterprise and tourism sectors both falling more than 1%, and technology stocks leading the rise.
Novo Nordisk's European and American stocks both fell 2%, coming off the historical high, admitting the cessation of the Oprocedurenone Clarion-CKD trial and failing to achieve the primary endpoint in the study of treating chronic kidney disease (CDK), resulting in a loss of approximately DKK 5.7 billion.
European and American bond yields rose together, and the yield on 10-year US Treasury bonds jumped 8 basis points to a two-week high.
Awaiting the heavyweight inflation data on Friday, US Treasury yields rise significantly. The US Treasury Department issued $70 billion in five-year bonds with a bid rate of 4.331% (versus 4.553% on May 28) and a bid-to-cover ratio of 2.35 (versus 2.30 previously), and the yield on US Treasury bonds remained high.
The two-year US Treasury bond yield, which is more sensitive to monetary policy, rose the most, up 6 basis points to 4.75%, hitting a one-week high. The benchmark 10-year US Treasury bond yield rose more than 8 basis points to 4.32%, hitting a two-week high. One week ago, it had fallen to the lowest level in ten weeks since the beginning of April.
The 10-year benchmark German bond yield in the euro zone rose 4 basis points to 2.45% at the end of the day, while the basic bond yields in France, Italy, Spain, and Portugal all rose more than 6 basis points. The two-year German bond yield demonstrated a V-shaped trend and rose more than 1 basis point at the end of the day. The mid-to-long-term UK bond yields all rose more than 4 basis points.
Crude oil prices rebounded at the end of the day and recovered from a one-week low, with US oil up to nearly $81 and Brent crude oil holding steady at $85. US natural gas fell more than 4%.
WTI August crude oil futures rose $0.07, or about 0.09%, to $80.90 a barrel. Brent August crude oil futures rose $0.24, or more than 0.28%, to $85.25 a barrel, having climbed above $86 on Monday to reach the highest level in eight weeks since April 30.
During the day, US WTI crude oil fell 0.64 dollars or 0.8%, approaching the $80 integer level. Last week, it consecutively hit a seven-week high for three trading days. International Brent September futures, with more active trading, fell 0.49 dollars or 0.6%, falling below the $84 level and hitting a one-week low at the end of the day before bouncing back.
Last week, US EIA commercial crude oil inventories rose by 3.59 million barrels, and gasoline inventories also rose by 2.65 million barrels, breaking the market's strong expectations for US summer fuel demand. However, oil prices have risen more than 4% in June, benefiting from tight supplies in the summer oil market and multiple bullish factors provided by escalating tensions in the Middle East.
TTF Dutch natural gas futures, the European benchmark, fell more than 3% and returned to nearly a two-week low, while ICE UK futures fell more than 3%. US natural gas futures for August fell 4.4% to a three-week low, significantly narrowing the year's gain to 6%. US gasoline futures are still up 19% this year.
The US dollar rose above its eight-week high of 106, and the Japanese yen fell below 160 to its lowest level since 1986, while the offshore renminbi fell below the 7.30 level.
Yesterday, Fed Governor Bowman's hawkish remarks on supporting rate hikes boosted the US dollar. The DXY, which measures the US dollar against six major currencies, rose the most by 0.5% and broke through the 106 level, hitting the highest intraday level since May 1. Since June, the US dollar index has cumulatively risen by 1.3%, and since 2024, it has cumulatively risen by 4.6%. Bloomberg's US dollar index rose to its highest level since November last year.
The euro fell the most against the US dollar, down 0.4% and breaking through 1.07 to its lowest intraday level since May 1, accumulating a 1% decline in June. The pound fell the most against the US dollar, down 0.5% and beginning to approach 1.26, hitting a six-week low since mid-May. The offshore renminbi against the US dollar fell the most before the US stock market opened, down 183 points or 0.3%, breaking through the 7.30 level, hitting the lowest intraday level in seven months.
The Japanese yen against the US dollar fell below the psychological integer level of 160 for the first time since April 29 during the European stock market hours, and continued to refresh a nearly 38-year low since the end of 1986 during the US stock market hours, falling the most by 0.7% to 160.84 and even trying to approach the 161 level. The yen against the euro hit a historic low. Before the US stock market opened, the yen against the US dollar rose by 30 points in a short-term rebound, and a Japanese Ministry of Finance deputy minister said that appropriate measures would be taken on exchange rates as needed.
Mainstream cryptocurrencies fell again, but the magnitude was not significant. The largest market-cap leader Bitcoin fell 0.5%, rebreaking $62,000. On Monday, it fell below the psychological integer level of $60,000 for the first time since May 3 and even fell below $59,000, hitting the lowest level in nearly eight weeks since May 1. The second-largest Ethereum fell 1%, rebreaking $3,400 and returning to the lowest level in five weeks since mid-May.
Spot gold fell below $2,300 to its lowest level in nearly three weeks, while silver fell more than 1% before rebounding by 0.2% at the end of the day, closing at $28.915 an ounce on COMEX in July.
The US dollar and US Treasury yields rose together, suppressing gold prices for two consecutive days. COMEX August gold futures fell 0.8% to $2,313.40 an ounce, but COMEX July silver futures rebounded and rose 0.2% to $28.915 an ounce.
Spot gold fell nearly $26 or 1.1%, breaking through the psychological level of $2,300 and hitting the lowest level in nearly three weeks since June 7. Last week, it approached $2,370 and hit a two-week high, but it fell sharply during Friday's trading and turned negative for the week. The gold price has fallen 6% from its historical high of around $2,450 on May 20. Silver fell more than 1% and then rose slightly, still below $29, the lowest level in six weeks.
Many institutions are bullish on gold, and one major reason is that central banks around the world may continue to increase their gold holdings. Economic uncertainty and geopolitical tension are driving up gold prices. The US dollar's share of global reserves may decline over the next five years.
The rise of the US dollar has caused most London industrial metals to fall. Dr. Copper, the economic indicator, closed down $31 or 0.3%, still below the key level of $9,600, hitting the lowest level in 10 weeks since mid-April. London aluminum rose 0.6% to return to its two-month low, while London zinc rose 2.4%. London lead fell 0.6% and fell below $2,200, London nickel fell 0.6% to hit the lowest level since early April, and London tin fell 0.7%. Citigroup said that after the copper price fell, investors were looking to buy, and $9,500 per ton is a good entry point.
Edited by Jeffrey