Source: Wall Street See
Authors: Fang Jiayao, Du Yu.
S&P 500 index rose on the fifth day of the six days, Nasdaq and Nasdaq 100 continued to reach new highs for six consecutive days, Dow Jones stopped falling for four consecutive days and pulled away from nearly two weeks low, Russell small-cap stock index stopped falling for two consecutive days and pulled away from a six-week low.
Powell said that interest rates can be lowered before inflation falls below 2%. A strong market bet on interest rate cuts in September has been reinforced by significant gains in large tech stocks, leading to stocks rising over 1%, with both the S&P and Nasdaq hitting record highs for at least six days. Many technology and chip stocks have reached new highs, with Tesla up over 44% in 11 days, and Nvidia up 2.7% approaching its highest. The structure of product revenue came in at 4.01/12.88/0.06 billion yuan for 100-300 million yuan products respectively.
Fed Chairman Powell testified before Congress that the Federal Reserve does not need to wait for inflation to fall below 2% to lower interest rates, as waiting too long for inflation to fall may cause it to fall too low, and lowering interest rates too late or too little may weaken economic activity and employment. The labor market has cooled noticeably, and Powell did not make any hawkish statements as expected, so the market has been warming up for a rate cut in September.
Commentators believe that Powell's testimony is crucial because the Federal Reserve's evaluation of risk balance is changing. If future data supports it, the Federal Reserve will cut interest rates in September. Fedwatch shows a 73.3% probability of a rate cut in September, and the market expects a rate cut in both September and December.
Powell's comments boosted US stocks to new highs, with all major indices up more than 1%. US bond yields fell across the board, the dollar weakened, and precious metals and London metals rose across the board. Due to tension in the Middle East and the US Energy Department's weekly inventory report showing a significant drop in crude oil and gasoline inventories, international oil prices rose. Traders focused on CPI data on Thursday this week.
The market expects that the year-on-year growth rate of CPI in June in the United States, which will be released on Thursday, will drop from 3.3% in May to 3.1%, with a slight increase of 0.1% month-on-month. The year-on-year growth rate of core CPI is 3.4%, and the month-on-month growth rate is 0.2%.
Internationally, tensions in the French market have eased, and market attention has turned to US data, with European stocks and bonds rising across the board. The Bank of England's Carney said that while the bank is moving towards a rate cut, service price inflation and wage growth remain strong, leading to a cooling of August rate cut expectations, and the pound strengthened.
S&P, Nasdaq, and Nasdaq 100 hit new highs for seven consecutive days, and the S&P 500 and Nasdaq hit new historical highs for the 37th and 27th times respectively this year, with the Dow Jones up more than 1% by Blue Chip stocks.
On Wednesday, July 10th, the Nasdaq, primarily made up of technology stocks, reached a new high of over 18,600 points, up more than 1.2%, and the S&P 500 reached a new high of over 5,600 points, up more than 1%, setting a record for the longest consecutive rise this year; the Dow Jones Industrial Average, made up of blue chips, increased by more than 1.1% on the same day.
By the close of trading, the S&P, Nasdaq, and Nasdaq 100 had hit new highs for seven consecutive days, with the S&P 500 and Nasdaq hitting new historical highs for the 37th and 27th time respectively this year:
The S&P 500 rose 56.93 points, or 1.02%, to 5,633.91. The Dow rose 429.39 points or 1.09% to 39,721.36. The Nasdaq rose 218.16 points or 1.18% to 18,647.45.
The Nasdaq 100 rose 1.09% to a new high. The Nasdaq Technology Market Value-Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 technology stocks, rose 1.46% to a new high. The Russell 2000 small-cap stock rose 1.10%. The "panic index" VIX rose 2.72% to 12.85.
All 11 sectors of the S&P 500 rose, with the S&P Information Technology/Technology sector up 1.63% and hitting a new historical high for the fifth consecutive trading day. It has risen 8.11% since June 24th. The Raw Materials sector rose 1.34%, the Health Care sector rose about 1%, and the Real Estate, Energy, and Telecommunications sectors all rose about 0.7%. The Consumer Discretionary sector rose more than 0.6%, and the Financial sector performed the worst, up only 0.42%.
Most of the "seven sisters of technology" rose more than 1% and closed at daily highs. Nvidia led the way, up 2.7%, approaching its all-time high and ranking third in market capitalization. Apple rose 1.88%, and has set a new record for seven consecutive trading days, maintaining the top market capitalization. Tesla rose 0.35% and has risen nearly 44.2% in the last 11 days, setting a new record for the longest consecutive rise in a year. Google A rose 1.16%, setting a new closing high after two days. Microsoft rose 1.46%, Meta rose 0.88%, and Amazon rose 0.23%.
Chip stocks rise across the board, with most up more than 2%. The Philadelphia Semiconductor Index rose 2.42%, breaking through 5900 points and hitting a new high, while the industry ETF SOXX rose 2.32%. The twice-long ETF of NVIDIA rose 5.22%; KLA, Applied Materials, Taiwan Semiconductor Manufacturing Company (TSMC), and Arm Holdings all hit new highs on the U.S. stock market; TSMC's ADR rose 3.54%, setting a new closing high of $191.05, with a closing market cap of $990.97635 billion; KLA rose 1.99%, Applied Materials rose 1.39%, Arm Holdings rose 2.29%, AMD rose 3.87%, Micron Technology rose 4%, Qualcomm rose 0.81%, Broadcom rose 0.66%, and Intel rose 0.81%.
Most AI concept stocks are up. SoundHound.ai rose 22.46%, BigBear.ai rose 6.9%, Palantir rose to a new high of 3.76%, Super Micro Computer rose 0.49%, C3.ai rose 1.77%, Snowflake rose 0.03%, Dell Technologies rose 0.02%, Oracle rose 0.99%, while CrowdStrike fell 2.96%.
On the news front:
Apple: Apple hopes that AI services will drive consumer demand, and plans to increase iPhone shipments by 10% in 2024, with at least 90 million iPhone 16 units shipped.
SoundHound.ai: On Wednesday, SoundHound announced that its SoundHound Chat AI voice assistant, combined with ChatGPT, has been launched in 11 European markets, including PSA, Opel and Vauxhall car brands, and put into production. By the end of July, the service will be expanded to 17 markets, offering 12 different language versions.
The Chinese concept index was roughly flat. The China Technology ETF (CQQQ) rose 0.2%. The China Internet ETF (KWEB) fell 0.21%. The NASDAQ Golden Dragon China Index (HXC) fell 0.04%.
In the popular stocks, new car manufacturers performed strongly, as Ideal rose more than 3%, Xiaopeng rose more than 7.4%, Joule Kai rose about 2.3%, and NIO rose about 2.6%; Baidu rose 2.66%, Pinduoduo rose 0.26%, Alibaba rose 0.41%, while Tencent Holdings (ADR) fell 0.88%, JD.com fell 0.22%, Netease fell more than 3%, Tal Education fell more than 2.1%, Sohu.com fell 5.71%, and Ctrip fell 3.77%.
Other stocks with large fluctuations include:
Eli Lilly and Co. rose 0.78%, hitting a new high in closing history.
The tense mood in the French market eased, and market attention turned to U.S. data, with European stocks rising and closing at the daily high, with the French stock index up more than 0.8%:
The STOXX 600 index in Europe rose 0.91% to 516.42 points, with almost all sectors up. The Euro STOXX 50 index rose 1.13% to 4958.86 points, with its constituent stock, Bayer, rising more than 3%.
The DAX 30 index in Germany rose 0.94%, the CAC 40 index in France rose 0.86%, the FTSE MIB index in Italy rose 1.30%, the FTSE 100 index in the United Kingdom rose 0.66%, the AEX index in the Netherlands rose 0.96% to a new historical high, and the IBEX 35 index in Spain rose 1.59%.
Among the highly volatile stocks, defense stock Kongsberg Gruppen announced that its operating income increased by 21%, and its stock price rose 11.07% to a new high in closing history.
Among the "Eleven Arhats" of European stocks, ASML Holdings rose more than 1.9%, hitting a new high in closing history, and Novo-Nordisk rose 1.06%.
BlackRock analysis said that the British stock market is likely to attract overseas investors to return, as the Labor Party's overwhelming victory in the election indicates the start of a turbulent era in the country's political situation. "We are now overweight in the UK stock market, which has been attractive for some time, but now we have a potential catalyst for political stability that could trigger an increase in international popularity."
US bond yields fell slightly by 1-2 basis points, with strong demand for 10-year U.S. bond ticket purchases. European bond yields fell across the board.
At the end of the day, the two-year U.S. bond yield, which is more sensitive to monetary policy, fell 0.43 basis points to 4.6221%, trading at a range of 4.6347%-4.6011% during the day. The yield on 10-year U.S. benchmark Treasuries fell 1.57 basis points to 4.2802%, trading in a range of 4.3096%-4.2646% during the day.
At the end of the day, the 10-year German Bund yield, the euro zone benchmark, fell 4.7 basis points to 2.533%, trading in a range of 2.552%-2.514% during the day. The two-year German bond yield fell 2.7 basis points to 2.897%.
France's 10-year treasury notes yield fell by 5.9 basis points, Italy's 10-year treasury notes yield fell by 8.7 basis points, Spain's 10-year treasury notes yield fell by 6.1 basis points, Greece's 10-year treasury notes yield fell by 8.4 basis points. The UK's 10-year treasury notes yield fell by 3.4 basis points to 4.126%, hitting the day's low of 4.090%.
The EIA weekly report showed that gasoline and aviation fuel demand was boosted during the US holiday, and US oil rebounded to above $82 per barrel.
WTI crude oil futures for August rose by $0.69, nearly 0.85%, to $82.10 per barrel. Brent crude oil futures for September rose by $0.42, more than 0.49%, to $85.08 per barrel.
US oil WTI hit a low of more than $0.6 or nearly 0.74%, breaking the $81 integer level. International Brent hit a low of $0.66 or nearly 0.78%, almost breaking the $84 level.
According to data released by the US Energy Information Administration (EIA), the expected boost in aviation fuel demand during the US Independence Day holiday season drove the average seasonal value to its highest level since 2019. At the same time, the average seasonal value of US gasoline demand also reached its highest level since 2021, while gasoline inventories fell to their lowest level since May. Analysts said the data indicated that production oil demand had strengthened after the US Independence Day holiday and had surpassed the uncertainty of the Fed's interest rate cuts.
US EIA crude oil inventories hit a new low since mid-March, falling by 3.34 million barrels, exceeding expectations of a 3 million barrel drop, exceeded expectations of a 0.442 million barrel increase by polled analysts, and fell by 12.157 million barrels in the previous period.
US natural gas futures for August fell by about 0.64% to $2.3290 per million British thermal units. US gasoline futures closed at $2.5034 per gallon.
As rate cut expectations heat up, the US dollar fell 0.1%, the yen fell to 162, and UK rate cut expectations cooled, with the pound rising about 0.5%.
A basket of currencies measuring the six major currencies against the US dollar, the DXY, fell 0.11% to 105.011 points at the end of the session, with a daily trading range of 105.174-104.996 points.
The Bloomberg US dollar index fell 0.10% to 1259.89 points, with a daily trading range of 1261.81-1259.71 points.
The euro rose 0.14% against the US dollar, the pound rose 0.49% against the US dollar, and the US dollar rose 0.18% against the Swiss franc; among commodity currencies, the Australian dollar rose 0.09% against the US dollar, and the New Zealand dollar fell 0.72% - the Reserve Bank of New Zealand implied that restrictions on policy will be eased, while the US dollar fell 0.14% against the Canadian dollar.
Offshore renminbi (CNH) fell 38 points against the US dollar, to 7.2924 yuan, traded consistently at 7.2884-7.2936 yuan throughout the day.
Among Asian currencies, the US dollar rose 0.19% against the yen, to 161.63, fluctuating upward throughout the day, reaching a high of 161.81.
The main cryptocurrencies rose and fell. The largest market cap leader, Bitcoin, fell 0.99%, trading between $59,740.00 and $57,365.00. The second largest, Ethereum, rose 1.07%.
Powell's remarks boost expectations for a rate cut in September, and gold and silver rise, while London's base metals rise.
The decline in US bond yields and the US dollar supported the rise in precious metals. COMEX August gold futures rose 0.42% to US$2377.9 per ounce in the tail market, while COMEX September silver futures fell 0.23% to US$30.985 per ounce.
When spot gold hit a daily high before Powell's congressional hearing, it rose nearly 1% and broke through $2380. Spot silver rose nearly 1.2% and briefly returned to the $31 level; during the hearing, the rise in spot gold was cut in half, and spot silver plummeted and fell to a daily low, down nearly 0.5%; after the hearing, gold and silver both rose slightly.
Other precious metals such as platinum and palladium all rose more than 0.7%.
Analysts say Powell's speech in the Senate yesterday did not include any surprising hawkish rhetoric, which to some extent eased the market's view that the Federal Reserve will not cut interest rates this year, and increased the attractiveness of interest-free gold. If CPI data on Thursday and PPI data on Friday show that inflation is cooling down, the gold and silver markets will continue to trade sideways and rise.
In addition, the World Gold Council said on Tuesday that physical gold-backed exchange-traded funds continued to see inflows for the second consecutive month in June, as European and Asian listed funds increased their holdings of gold.
London's industrial base metals generally rose. The "copper doctor", an indicator of the economy, closed up $36, returning to the 9900 integer mark. London aluminum fell $13 to $2484/tonne. London zinc rose $35, up more than 1.19%, to $2966/tonne. London tin rose more than 1.91%. London lead fell $14 to $2180/tonne, while London nickel fell more than 1.46%.
Editor/Jeffy