Source: Wall Street See
The Philadelphia Semiconductor Index fell nearly 7%, the largest decline since the epidemic-tracking ETF hit the index and Nvidia fell 6.6% and was the worst of the 'Magnificent Seven Sisters' that fell. ASML fell nearly 13% and suspended trading at one point, while Applied Materials, AMD, and Lam Research all fell over 10%, but Intel and IBM, the 'AI losers', drew investor interest and rose against the market. Small-cap Russell stocks fell more than 1%, the first decline in six days, while the Nasdaq was down more than 2.5% for the first time since 2001 at the same time as the Dow closed up, indicating continued rotation of funds.
Geopolitical tensions have intensified, combined with ASML's weaker-than-expected performance guidance, causing technology and chip stocks to plummet, dragging the Nasdaq down 2.8% and the Nasdaq 100 down nearly 3%. The Dow rose for six consecutive days, the Russell 2000 small-cap stock ended its five-day rally, and the overall stock index fell significantly, but mainly in technology, telecommunications, and non-essential consumer goods sectors, while essential consumer goods, energy, and financial sectors performed well.
Fed Governor Waller said the time for a rate cut is getting closer. William Williams, the chairman of the Federal Reserve Bank of New York, who enjoys permanent voting rights on the FOMC and is known as the 'third in command' of the Fed, said the Fed is close to cutting interest rates, but not ready yet. He and Richmond Fed President Barkin also mentioned that the encouraging inflation data in recent months needs 'more' evidence to show that inflation continues to slow.
Powell's hawkish comments have not had a significant impact on the market, which has fully priced in a rate cut in September. In the bond market, the yield on US Treasuries rose due to better-than-expected June new home starts and industrial output data, but then fell from its highs as funds flowed into the bond market following the sell-off in US stocks, and rebounded slightly at the end of the day. Pre-market trading in US stocks. As for bonds, other.
In the foreign exchange market, the dollar continued to weaken, falling to its lowest level since March, and the yen rose 1.4% against the dollar to 156.2, hitting a new high since June 12, fueling speculation that the Japanese authorities may once again buy yen. CSI commodity equity index fluctuated. Last week, US crude oil inventories fell sharply, combined with the weak US dollar, and US crude oil rose sharply by 2.5%. Bullish interest rate cuts, safe-haven sentiment, and central bank purchases of gold all pushed gold prices to explore new highs during the day, with spot gold closing down 0.4% from its all-time high, and spot silver falling nearly 4%.
In other data, US mortgage rates fell to 6.87%, the lowest level since early March, boosting bets on a rate cut in September. The Federal Reserve's beige book shows that due to factors such as the US election, domestic politics, geopolitical conflicts, and inflation, the expected growth rate of the US economy will slow in the next six months.
The Dow hit a new high while the Nasdaq plunged 2.8%, with technology stocks collectively plummeting. Nvidia fell over 6.5%, leading the decline in technology stocks, while ASML fell nearly 13% and was suspended at one point.
On Wednesday, July 17, the Dow hit a historic high for six consecutive days, while other major US stock indices fell, with the Nasdaq down 2.77%, its biggest single-day drop since December 2022. The S&P 500 and Russell 2000 small-cap stock indices both fell more than 1%, while the regional banking index rose 1.58%, hitting a more than one-year high for seven consecutive days.
The S&P 500 fell 78.93 points, or 1.39%, to 5,588.27, while the Dow rose 243.60 points, or 0.59%, to 41,198.08. The Nasdaq fell 512.41 points, or 2.77%, to 17,996.92.
The Nasdaq 100 index fell 2.94%; the Nasdaq Technology Market Cap Index, which measures the performance of Nasdaq 100 technology stocks, fell 4.29%; the Russell 2000 small-cap stocks fell 1.06%; and the VIX fear index rose 9.70% to 14.47, approaching the May 2 peak of 16.09.
The Philadelphia Stock Exchange's KBW Bank Index rose 0.61% to 114.67 points. The Dow Jones KBW Regional Banking Index rose 1.58% to 114.29 points.
The Nasdaq 100 plummeted, marking its biggest single-day drop since December 2022.
Of the 11 sectors of the S&P 500, the information technology/technology sector fell 3.72%, the telecommunications sector fell 2.09%, the consumer discretionary sector fell 1.8%, the industrial sector fell 1.3%, the financial sector rose 0.85%, the energy sector rose 1.08%, and the daily consumer goods sector rose 1.43%.
In terms of investment research strategies, the 'Magnificent Seven' technology giants have experienced an 18-month rise, but Wall Street's attention is shifting away from super-cap stocks and towards AI concept stocks that have relatively lower returns, such as Intel, AMD, and IBM. Because these laggards have lower valuations and face fewer challenges in terms of market popularity and profit expectations, they are likely to be in a favorable position for the remainder of 2024. These three companies have all outperformed the market in the past month, while AI darling Nvidia has seen a slight decline over the same period.
Goldman Sachs strategist Rubner said the S&P 500 index has no choice but to fall next. He warned against buying on dips as data since 1928 suggests July 17 may have been the peak of the S&P 500 index's ROI, not to mention August being the worst month for outflows from passive stock and mutual funds. Seasonal weakness, high positions, and digestion of all positive news (including rate cuts, Trump deals, and strong financials) have left the US stock market on the brink of summer adjustments in addition to all the positive news being digested. The company's product structure has an operating income of 4.01/12.88/0.06 billion yuan for products ranging from 100-300 billion yuan.
The 'Tech Seven Sisters' have suffered significant losses, with the seven giants losing as much as 1.1 trillion dollars in the past five days. Nvidia fell 6.64% to third place in the market cap at under 3 trillion dollars; Tesla fell 3.14%; Apple fell 2.53% to maintain the number one spot with a market cap of 3.51 trillion dollars; Microsoft fell 1.33%; Google A fell 1.58%; Amazon fell 2.64%; while 'Metaverse' Meta fell 5.68%.
Semiconductor stocks have almost all fallen, with ASML weighing on the semiconductor index, dropping over 6.8%. The PHLX Semiconductor Index fell 6.81%; the SOXX industry ETF fell 7.11%; the Nvidia 2x Long ETF fell 13.37%; the ASML ADR fell 12.74%; Applied Materials, AMD, Marvell, Lam Research, KLA Corp all fell over 10%; while Qualcomm fell 8.61%, Taiwan Semiconductor fell 7.98%, Broadcom fell 7.91%, Micron Technology fell 6.27%, and Intel rose 0.35%.
AI-concept stocks fell across the board. SoundHound, a 'Nvidia concept stock,' fell more than 5.8%; Bullfrog AI fell 11.26%; BigBear.ai fell 7.23%; Super Micro Computer fell 6.92%; Dell fell 6.77%; CrowdStrike fell 3.82%; Oracle fell 2.35%; and Snowflake fell 0.81%.
On the news front:
Tesla: Barclays raised Tesla's target price from $180 to $225. 'Wood Sister,' Cathie Wood, said Tesla could soar tenfold if it built an autonomous taxi platform, which would be an '8-10 trillion dollar global revenue opportunity,' with platform providers, including Tesla, potentially getting up to half. Investors are no longer purely valuing Tesla as an electric vehicle manufacturer, but as having potential in autonomous taxi prospects.
Qualcomm: HSBC downgraded Qualcomm from buy to hold, with a target price of $200.
ASML, the giant in lithography machines: the company's stock was halted temporarily. ASML announced its Q2 revenue and profit, which both exceeded expectations, and AI chip demand pushed Q2 orders to 5.57 billion euros, far exceeding the expected 4.41 billion euros. ASML still expects the industry to continue to recover in the second half of the year, but the company's outlook for Q3 is lower than expected, with net sales expected to be between 6.7 billion euros and 7.3 billion euros, compared to the market's expectation of 7.46 billion euros.
Geopolitical tensions have escalated, with ASML ADR plummeting at circuit breakers and closing down 12.74%, causing a global decline in semiconductor stocks.
According to the latest report from TrendForce, revenue growth of AI servers is significantly higher than that of general-purpose servers. It is estimated that the global AI server output value will reach 187 billion US dollars in 2024, accounting for about 65% of the server market.
United Airlines (UAL): United Airlines' Q2 revenue was approximately in line with expectations, with reduced capital expenditure expectations for the full year. The company expects adjusted EPS of $2.75-2.35 for Q3, lower than analyst estimates of $3.38, causing the stock price to drop about 5% after hours.
Chinese concept stocks collectively fell. The KWEB Chinese Internet Index ETF fell 1.15%; the CQQQ China Technology ETF fell 2.24%; and the NASDAQ Golden Dragon China Index (HXC) fell 1.86%.
Among the popular China concept stocks, NIO fell by 6.33%, Xpeng fell by 4.69%, Xiaopeng fell by 3.91%, Bilibili fell by 3.54%, PDD Holdings fell by 2.96%, Ideal fell by 2.82%, Baidu fell by 2.82%, Tencent Holdings (ADR) fell by 2.78%, Alibaba fell by 1.71%, JD.com fell by 0.81%, and NetEase fell by 0.03%.
Among stocks with significant volatility:
Cipher Mining (CIFR), a Bitcoin mining company, rose today as it has become a target for acquisitions due to increasing demand for data centers. After receiving the acquisition interest, the company is considering a sale.
Novo-Nordisk and Eli Lilly & Co: Early trial results from Swiss pharmaceutical giant Roche are optimistic. Shares of Novo Nordisk (US) and Lilly (US) fell by 3.87% and 3.82%, respectively, while Roche (ADR) rose by 7.53%.
Gold and silver mining stocks generally followed the decline of the US tech sector. Avino Silver & Gold dropped more than 8%, First Majestic fell by about 4.7%, Harmony Gold Mining fell by more than 3.9%, Coeur Mining fell by more than 3.8%, Pan American Silver fell by more than 2.5%, Hecla Mining fell by about 2.4%, Barrick Gold fell by more than 1.9%, and Gold Fields rose by more than 0.9%.
Digital currency concept stocks generally fell. Applied Digital fell by 8.96%, 'Bitcoin position holder' MicroStrategy fell by more than 4.4%, 2x long Bitcoin ETF fell by more than 1.9%, internet-famous brokerage Robinhood fell by more than 1.8%, ARKB and many other US spot Bitcoin ETFs fell by 1.08%-0.84%, Canaan rose by 0.83%, and 2x short Bitcoin ETF rose by 1.79%.
European stocks fell for three consecutive days:
The pan-European Stoxx 600 index fell by 0.48% to 514.83 points. The Euro STOXX 50 index fell by 1.14% to 4891.46 points.
The German DAX 30 index fell by 0.44%; the French CAC 40 index fell by 0.12%; the Italian FTSE MIB index rose by 0.03%; the UK FTSE 100 index rose by 0.28%; and the Spanish IBEX 35 index rose by 0.13%.
European semiconductor stocks fell sharply, with ASML Holding falling by 10.93%, the largest single-day decline since March 2020, semiconductor equipment maker ASM International fell by 7.65%, and BE Semiconductor Industries fell by 7.13%.
US bond yields were mixed, UK rate cut expectations fell. UK bond yields generally rose.
At the end of the day, the two-year US Treasury bond yield, which is more sensitive to monetary policy, rose by 1.65 basis points to 4.4337%, with a trading range of 4.4235%-4.4759% during the session, showing a trend of rising after a high point. The benchmark 10-year US Treasury bond yield fell by 0.78 basis points to 4.1498%, with a trading range of 4.1943%-4.1421% during the session.
US bonds rose and fell, long-term bonds overall performed slightly better (2-year +1 basis point, 30-year -1 basis point). Due to the large sell-off in US stocks, the weak overnight trend in US bonds was replaced by strong buying during the US stock trading session.
At the end of the day, the 10-year German benchmark bond yield fell by 0.6 basis points to 2.421%, and the fluctuation range for the whole day was less than 4.0 basis points. The two-year German bond yield rose by 1.2 basis points to 2.775%, with a trading range of 2.748%-2.794% during the session.
The 10-year French bond yield fell by 0.6 basis points, the 10-year Italian bond yield rose by 1.8 basis points, the 10-year Spanish bond yield rose by 0.3 basis points, and the 10-year Greek bond yield rose by 0.2 basis points. The 10-year UK bond yield rose by 2.7 basis points to 4.076%.
UK inflation remained stable at the Bank of England's 2% target level in June, but service sector inflation remained at 5.7%, higher than the Bank of England's previous forecast level. These data may intensify the Bank of England's concerns that although inflation has returned to the target level, it may not remain at this level in the long term.
Analysts believe that UK inflation may rise to the high level of 3% before the end of the year. Traders lowered their bets on an interest rate cut by the Bank of England in August, with the probability falling to 25%. After the data was released, the pound rose slightly by 0.2%, the pound against the US dollar exchange rate rose for the first time in a year to $1.30, UK bond prices fell, and the two-year bond yield rose above 4%.
Last week, crude oil inventories in the USA fell sharply and US oil rose by 2.5% as investors bearish on summer cooling demand, while US natural gas futures fell by about 7%.
The weakening of the US dollar supported the rebound in oil prices, ending a three-day decline. WTI August crude oil futures rose by 2.09 USD, an increase of more than 2.52%, to 82.85 USD/barrel, about the highest close since June 17. Brent September crude oil futures rose by 1.35 USD, an increase of more than 1.61%, to 85.08 USD/barrel, also the highest close since June 17.
American and Brent crude have been rising all the way, setting a new daily high near the end of trading, with US crude rising by nearly 2.7% to $82.94/barrel and Brent crude rising by more than 1.7% to $85.17/barrel.
Analysts say that US EIA crude oil inventories last week fell more than expected, and the weakening of the US dollar offset some signs of slowing oil demand, pushing oil prices higher. Data from the US Energy Information Administration (EIA) showed that in the week of July 12th, US crude oil inventories decreased significantly by 4.87 million barrels, far below Bloomberg user expectations of a decrease of 0.275 million barrels and analyst expectations of a decrease of 0.736 million barrels, compared to a decrease of 3.443 million barrels the previous week. At the same time, the decline was also greater than that indicated by the American Petroleum Institute (API).
JPMorgan said that the balanced price of US crude oil supply and demand is around $70/barrel. A price of $60/barrel is too low to stimulate production. In that case, oil prices may jump sharply to $100/barrel in the next year. If Trump returns to the White House, he may launch a new round of (oil and gas) exploration and development in the Gulf of Mexico and Alaska, aiming to increase production by 3 million barrels/day.
US August natural gas futures fell more than 6.99% to 2.035 USD/million British thermal units, hitting a new low since May. European benchmark TTF Dutch natural gas futures fell by 2.76% to 31.893 Euro/megawatt-hour. ICE UK natural gas futures rose 2.21% in late trading to 80.76 pence/calorie.
Traders gave up the idea that hot summers would boost power plant demand for natural gas and suppress the widespread increase in supply in the US, causing NY natural gas to fall by about 7%.
As the US dollar weakened, the yen rose by more than 1%, causing speculation in the market that the Japanese authorities might intervene again, while Bitcoin fell by more than 1%.
The US dollar index measuring against six major currencies fell 0.50% to 103.750 points, hitting a new low since the end of March. The intraday trading range was 104.294-103.650 points, refreshing the lowest level since March 21st at Beijing Time 21:41. In recent days, it has successively fallen below the 50-day moving average, the 100-day moving average, and the 200-day moving average, accumulating a decline of about 2.22% since June 28th.
Bloomberg's US dollar index fell to the end of May, down 0.32% to 1247.74 points, with an intraday trading range of 1252.60-1246.92 points.
The US dollar fell against most non-US currencies.
The offshore yuan (CNH) rose 171 points against the US dollar to 7.2720 yuan, with overall trading between 7.2918-7.2609 yuan.
Market speculation that the Japanese authorities may intervene again to buy yen. Among Asian currencies, the US dollar fell 1.35% against the yen to 156.20, a new low since mid-June, breaking the intraday consolidation earlier in the day before 14:00, and showing a significant continued decline by 17: 00, followed by a continued low shock.
According to Kyodo News Agency, Japan's highest foreign exchange official, Masato Kanda, said that he has "no choice" but to make "appropriate responses" when the exchange rate fluctuates excessively.
Most mainstream cryptocurrencies fell. The largest market-cap leader Bitcoin fell by 1.15% to $64,695.00, with a daily high of $66,295. The second-largest Ethereum fell by 1.95% to $3,422.00, with a daily high of $3,532.
Three factors, interest rate cuts, safe-haven sentiment, and central bank gold purchases, pushed the gold price to a new high again during the trading session. The spot gold closed down 0.4%, leaving the historical high, while the silver price plunged nearly 4%.
COMEX August gold futures fell 0.43% to $2457.3/ounce in the close, while COMEX September silver futures fell 3.4% to $30.39/ounce.
The weak US dollar supported metal prices, and the international gold price reached a new high during the day. In early trading, spot gold rose as much as 0.6%, hitting a historic high of $2483.74/ounce, while COMEX gold futures reached a high of $2488.35/ounce, before accelerating its decline and hitting a daily low of almost 0.7% and nearly breaking the support of $2450/ounce, with a slight rebound in the closing. In pre-market trading, spot silver traded slightly lower.
In pre-market trading, spot silver traded slightly lower, and US stocks dropped sharply in early trading, hitting a daily low and falling by more than 3.8%, almost breaking through the $30/ounce level, with a slight rebound nearing the closing.
Analysts believe that the expectation of a Fed rate cut, the continued rise of risk aversion, and the strong support of global central bank gold purchases are the key catalysts for the surge in gold prices. The gold price is expected to fluctuate before rising, as the market anticipates a rate cut by the Fed in the second half of the year.
Most London industrial metals fell. The "copper doctor" of the economic barometer fell 28 dollars to $9635/ton. London aluminum fell $4 to $2402/ton. London zinc fell nearly 1.32% to $2848/ton. London nickel fell $137 to $16,457/ton. London tin fell $221 to $32,950/ton. While London lead rose $6 to $2190/ton.
International copper fell 0.43% in overnight trading, Shanghai copper fell 0.52%, Shanghai aluminum fell 0.35%, Shanghai zinc fell 1.60%, Shanghai lead rose 0.28%, Shanghai nickel fell 1.80%, and Shanghai tin fell 1.96%.
Editor / jayden