Source: Wall Street See

According to reports, senior Democrats predict that Biden will withdraw from the election at the earliest on the weekend. Pelosi told Biden that he cannot win, intensifying market anxieties and causing most U.S. bond yields to rise and the U.S. dollar to strengthen. The major U.S. stock indexes all fell sharply, and major sectors collectively fell, with only the energy sector rising. Healthcare, consumer discretionary, and financial sectors fell the most. Later, Pelosi denied media reports, saying that they were misleading, and that Biden plans to restart his campaign next week, which caused the three major U.S. stock indices to rise slightly for a time.

In the bond market, although the number of initial jobless claims in the United States last week was higher than expected, showing the largest increase since early May, the number of continuing jobless claims has soared, further proving that the labor market is weak. The slowdown in the job market and the recent decline in inflation are favorable for rate cuts. After the data was released, U.S. bond yields fell in the short term but did not continue. As the uncertainty of Biden's reelection increased, the U.S. Treasury yields rose across the board before the close. The latest CBS poll results showed that Trump’s advantage over Biden expanded to 52% vs. 47%.

The panic selling has spread to almost all assets, the U.S. dollar has skyrocketed, U.S. stocks and bonds have been sold off and fallen, metals have fallen further, and bitcoin has fallen by more than 1.2%.

On the international front, the European Central Bank kept its three key interest rates unchanged in July, stating that more data support is needed for the next rate cut, and European bond yields mostly rose. But according to media reports, officials are considering whether to cut interest rates again in 2024. The European Central Bank still hopes to maintain policy flexibility in September to avoid repeating the mistakes of excessive promises made in June.

On Friday, the market will closely watch the speech by Williams, a Federal Reserve official, and will then enter the policy quiet period.

U.S. stock indexes fell across the board, Taiwan Semiconductor rose, Nvidia rose 2.8%, and the weight loss duo suffered heavy losses, as did Chinese concept stocks.

On Thursday, July 18th, U.S. stocks fluctuated at the beginning of the trading day, but all turned down and continued to fall. The technology-focused NASDAQ fell the deepest, down more than 1.3%; the S&P 500 large-cap index fell by nearly 1.2%; the Dow Jones blue-chip index fell by nearly 1.5%; Russell 2000 small-cap stocks fell by more than 2.2%; and the NASDAQ 100 fell the deepest, down more than 1.1%.

At the close, major U.S. stock indexes fell across the board. The Russell 2000 small-cap index fell 1.85% with the largest decline among the major indexes; the Dow Jones fell 1.29%, ending a six-day rally and saying goodbye to a historic high.

The S&P 500 index fell 43.68 points, or 0.78%, to 5544.59. The Dow Jones fell 533.06 points, or 1.29%, to 40665.02. The NASDAQ fell 125.70 points, or 0.70%, to 17871.22.

The NASDAQ 100 fell 0.48%; the NASDAQ technology market value-weighted index, which measures the performance of NASDAQ 100 technology stocks, fell 0.18%; the Russell 2000 small-cap stocks fell 1.85%; and the VIX panic index rose 10.08% to 15.94, approaching the April 24th closing level of 15.97.

The Philadelphia Stock Exchange's KBW Bank Index fell 1.87% to 112.53 points. The Dow Jones KBW Regional Bank Index fell 1.53% to 112.54 points.

VIX volatility soared 10% to a two-and-a-half-month high.

The 11 sectors of the S&P collapsed, with the healthcare sector falling the most (2.29%), followed by consumer discretionary and financial sectors (1.28%), raw materials (down more than 1%), telecommunications (down about 0.3%), information technology/tech sectors (down more than 0.2%), and only the energy sector rose by more than 0.3%.

The pharmaceutical sector fell, with Eli Lilly and Co being the worst performer, down 6.26%. BIO, a product of Berkeley Life Sciences, dropped by about 5.8%. IDEXX Laboratories Inc fell by about 5.2%, and Abbott Laboratories fell by 4.4%, the fourth largest decline.

In the optional consumer goods sector, Domino's Pizza fell 13.57%, Caesars Entertainment fell more than 5%, and Chipotle Mexican Grill fell more than 3.4%, ranking third-to-last.

In the S&P financial sector, Citigroup fell 4.02%, Goldman Sachs and JPMorgan fell 3.18%, and Wells Fargo & Co fell 2.74%, ranking fifth from the bottom.

In the S&P 500, Domino's Pizza, Eli Lilly and Co, and Berkeley Life Sciences were the worst performers.

In investment research strategies, Bank of America stated that, as in previous bubble periods, retail investors who hold AI concept stocks will be hurt.

Jim Covello, head of stock research at Goldman Sachs, said that AI would not trigger an economic revolution and that the bubble would burst. Most technological transformations in history, especially those that are revolutionary, have replaced very expensive solutions with very cheap ones. When this becomes clear, all stocks that have risen due to the prospects of AI will also fall.

Most of the "Seven Sisters of Technology" fell. Meta, in the Metaverse, rose by 3.07%, NVIDIA rose by 2.8%, and Tesla rose by 0.29%. Apple fell by 2.03%, with a market cap of $3.44 trillion, maintaining its top spot; Microsoft fell by 0.71%; Google A fell by 1.8%; and Amazon fell by 2.22%.

Chip stocks rose and fell. After opening higher, the Philadelphia Semiconductor Index turned lower multiple times during the session and showed a W-shaped trend (similar to a double bottom), ultimately closing up more than 0.5%; the industry ETF SOXX rose 0.37%; NVIDIA's double-long ETF rose 5.55%; Broadcom rose 2.91%, Intel rose about 1.2%, Globe Specialty Metals (GSM) and Taiwan Semiconductor ADR rose about 0.4%, while Qualcomm fell about 0.1%, ASML Holding ADR fell 0.85%, Micron Technology fell more than 1.7%, Supermicro Computer fell 1.8%, Arm Holdings fell about 2.1%, AMD fell 2.3%, and Nano Semiconductors fell 8.35%.

Most AI concept stocks fell. SoundHound, a NVIDIA concept stock, fell 8.93%, BigBear.ai fell 3.9%, Supermicro Computer fell 1.8%, CrowdStrike fell 3.35%, Oracle fell 0.88%, Snowflake fell 3.89%, while Dell rose 0.14%.

On the news front:

Taiwan Semiconductor: Taiwan Semiconductor's Q2 sales increased by 40% year-on-year, and net income and gross margin were higher than expected. The company's fiscal year in terms of sales growth expectations has been raised to the middle of the range higher than 20% according to US dollars. Revenue from advanced processes in the second quarter rebounded from the previous quarter, with 3-nanometer and 5-nanometer processes contributing half of the revenue in the second quarter. Taiwan Semiconductor said that the construction of the N2 factory is progressing well and that the N2 process is scheduled to begin mass production in 2025; N3 chip demand is very strong, and it is not ruled out that more N5 technologies will be converted into N3. According to media reports, Taiwan Semiconductor's 3nm monthly capacity may reach 1.25 million pieces in the second half of the year, and it is expected to start mass production of 2nm in Q4 2025, with a target monthly capacity of 0.03 million pieces.

Broadcom: OpenAI is in talks with Broadcom to develop new artificial intelligence chips. Broadcom's stock price turned higher in intraday trading.

Apple: Guo Mingchi, an analyst at TF International Securities, stated that despite rumors of an increase in iPhone 16 orders after the Apple Worldwide Developers Conference, earnings conference calls from two major Apple suppliers (Taiwan Semiconductor and Largan Precision) suggest that iPhone 16 orders may not have increased. My understanding is that from the perspective of EMS/assembly, the number of iPhone 16 orders has not changed significantly (about 87 million units) and is still slightly lower than the number of iPhone 15 orders in the second half of last year (about 91 million units).

Tesla: According to the California New Car Dealers Association (CNCDA) report, Tesla's sales in California in the second quarter of 2024 fell sharply by 24%.

According to preliminary data from Counterpoint, the global PC market rebounded in Q2 2024, with PC shipments increasing by 3.1% year-on-year to 62.5 million units, achieving year-on-year growth for the second consecutive quarter, and is expected to usher in an AI PC wave in the second half of the year. In terms of product structure, the operating income of 10-30 billion yuan products is 401/1288/60 million yuan respectively.

Amazon announced that sales during the 2024 PRIME DAY event set a record, with PRIME members purchasing more products than all previous PRIME DAY events.

Micron Technology has released M-RDIMM memory, which will be shipped in bulk in the second half of the year. Compared to RDIMM, M-RDIMM can achieve a 39% increase in effective memory bandwidth, more than 15% improvement in bus efficiency, and up to 40% reduction in latency.

Despite achieving good results in terms of order growth and net income, shares of Domino's Pizza fell more than 13% due to Domino's Pizza's prediction of a 25% decrease in global store openings this year, making it the biggest intraday decline since 2012. The company's second-quarter results showed that discounts and the launch of new products were not sufficient to attract more value-seeking diners.

China concept stocks collectively fell. The China Internet ETF (KWEB) fell 1.2%, the China Tech ETF (CQQQ) fell 0.85%, and the Nasdaq Golden Dragon China Index (HXC) fell 1.21%.

Among popular China concept stocks, Ehang Intelligent fell 6.92%, BOSS Direct Recruitment fell over 4.3%, Autohome fell over 4.2%, qifu technology fell over 3%, Xiaopeng fell over 2.9%, JD.com fell about 2.6%, Ctrip fell over 2.3%, Tencent Music fell over 2.2%, Miniso fell over 2.1%, Yum China fell over 1.9%, Yatotel fell 1.8%, JinkoSolar fell 1.7%, NIO and Li Auto fell over 1%, ZTO Express, H World Group, Alibaba, KE Holdings, GDS Holdings, New Oriental, NetEase and Baidu fell up to about 0.8%, Douyu, Tal Education, Zai Lab, and B Station rose up to nearly 0.4%, VIPShop rose 0.8%, Canadian Solar and Daqo New Energy rose more than 1.2%, Luckin Coffee rose about 1.5%, Kingsoft Cloud rose about 1.9%, Momo rose more than 2.3%, and Hollysys Automation Technologies rose more than 3.1%.

Among stocks with significant volatility:

Shares of Eli Lilly and Co fell as much as 7.6% intraday, marking the poorest intraday performance since March 2021, with a market cap evaporating approximately 100 billion USD in the past three days.

Digital currency concept stocks generally fell, with Riot Platforms falling 11.84%, Cipher Mining falling 11.5%, Stronghold falling over 11.3%, CleanSpark falling about 10.5%, digital currency exchange Coinbase falling about 6.4%, online brokerage Robinhood falling about 5.6%, 2x long Bitcoin ETF falling over 3.2%, Weici Investments, also known as “Bitcoin Holder,” fell about 2.2%, and 2x short Bitcoin ETF rose over 3.3%.

Gold and silver mining stocks fell across the board, with Avino Silver & Gold falling 5.63%, First Majestic falling over 5.5%, copper mine stock Freeport-McMoRan falling over 5.3%, Harmony Gold Mining falling about 3.9%, BVN and FSM also falling up to over 3.8%, Gold Fields falling over 2.9%, Coeur Mining falling over 2.9%, Pan American Silver falling about 2.7%, Hecla Mining falling about 2.3%, Barrick Gold falling 1.8%, and Newmont Mining falling about 1.6%.

In ETFs, RING fell 1.82%, SLV fell 1.7%, the gold mining stock ETF GDX fell about 1.5%, SGDM fell over 1.3%, and the gold ETF GLD fell over 0.6%.

Buffett's company, Hawaiian Electric Industries, and others are considering a $4 billion post-disaster settlement for local wildfires, with shares rising nearly 40% after the US stock market was closed.

European stocks varied:

The Pan-European Stoxx 600 fell 0.16% to 514.01 points. The Euro STOXX 50 index fell 0.44% to 4,870.12 points.

Germany's DAX 30 index fell by 0.45%, France's CAC 40 index rose by 0.21%, Italy's FTSE MIB index rose by 0.43%, the UK's FTSE 100 index rose by 0.21%, the Netherlands' AEX index fell by 0.05%, and Spain's IBEX 35 index rose by 0.38%.

Among the volatile stocks, Nokia's Q2 financial report fell short of expectations, down 4.97%. Data show that Nokia's Q2 net sales amounted to 4.47 billion euros, lower than the estimated 4.76 billion euros, and Q2 adjusted operating profit was 0.423 billion euros, higher than the estimated 0.3719 billion euros. Nokia still predicts an adjusted operating profit of 2.3 billion to 2.9 billion euros for the year, while the market estimates 2.51 billion euros.

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In late trading, the two-year Treasury yield, which is more sensitive to monetary policy, rose by about 3.60 basis points to a daily high of 4.4735%. The benchmark 10-year Treasury yield rose by 4.65 basis points to a daily high of 4.2040%.

The 10-year German government bond yield, the eurozone benchmark, rose by 1.1 basis points to 2.432%, and rose to a daily high of 2.451% after the ECB announced its interest rate decision at 20:15 Beijing time, before fluctuating down to a daily low of 2.401%.

The two-year German government bond yield fell by 1.0 basis point to 2.765%, and traded at a range of 2.799%-2.732% during the day. The media said that the ECB's research on the feasibility of cutting interest rates only once for the remaining time this year has narrowed the decline.

France's 10-year treasury notes yield rose by 1.5 basis points, Italy's 10-year treasury notes yield rose by 2.1 basis points, Spain's 10-year treasury notes yield rose by 1.6 basis points, and Greece's 10-year treasury notes yield was flat. The UK's 10-year Treasury yield fell by 1.2 basis points to 4.064%.

UK wage growth slowed to its lowest level in nearly two years, showing the latest signs of cooling in the labor market and keeping hopes alive for a rate cut next month. After the data was released, UK bond yields continued to fall.

Rising rate-cut expectations interweaved with signs of economic slowdown, keeping oil prices stable.

The strong dollar weighed on oil prices. WTI August crude oil futures fell 0.03 dollars, or about 0.04%, to 82.82 dollars/barrel. Brent September crude oil futures rose 0.03 dollars, or less than 0.04%, to 85.11 dollars/barrel.

Analysts said that the higher-than-expected number of US jobless claims indicates an economic slowdown, which could reduce oil demand and suppress oil price growth. However, these data also strengthen the reasons for the Fed to accelerate interest rate cuts, as lower rates will stimulate more oil demand. The expectation of a US rate cut and the signal of economic slowdown have intertwined, resulting in stable oil prices.

US August natural gas futures rose more than 4.42%, to $2.125/million British thermal units; TTF Dutch natural gas futures, the European benchmark, rose 2.45%, to 32.674 euros/megawatt-hour; ICE UK natural gas futures closed higher by 2.21%, at 80.76 pence/calorie.

Data from the US Energy Information Administration (EIA) shows that last week's US EIA natural gas inventories increased by 10 billion cubic feet, with a week-on-week increase of 0.31% (up from 2.07% last week), to 3.21 trillion cubic feet (from 3.2 trillion cubic feet).

As the dollar surged, it wiped out all this week's losses, rising more than 0.4% to return to above 104, while the yen rose above 156, hitting a one-month high.

The dollar index DXY, which measures against six major currencies, rose 0.42% to 104.182 points, trading in a range of 103.655-104.228 points during the day, lifting off its lowest level of 103.650 points since March 21.

The Bloomberg dollar index rose 0.48% to 1253.71 points, trading in a range of 1246.65-1254.05 points during the day.

Offshore renminbi (CNH) rose 55 points against the US dollar to 7.2775 yuan, and traded in a range of 7.2606-7.2788 yuan throughout the day.

Of all Asian currencies, the US dollar rose by 0.74% against the Japanese yen, reaching 157.36 yen, fluctuating upwards throughout the day with a low of 156 yen and 155.38, the first since June 12.

Data shows that Japan's exports continued to grow for the seventh consecutive month in June. Japan's exports to the United States increased by 11% year on year in June, but exports to the European Union fell by 13.4%.

Mainstream cryptos saw mixed results. Bitcoin, the largest in terms of market cap, fell 1.24% to $63,925.00. Ethereum, the second largest, reported $3,414.00, roughly unchanged from Wednesday.

The strong US dollar suppressed precious metal prices, with gold falling below $2,450 and London zinc down nearly 4.1%.

COMEX August gold futures fell 0.59% to $2,445.50/ounce, while COMEX September silver futures fell 1.24% to $30.00/ounce at the close of trading.

During early trading in European shares, spot gold rose nearly 0.7% to a high of $2,474.94/ounce, nearing a historic high. However, the price of gold continued to decline, diving straight down in late trading, falling more than 0.7% and dropping below $2,450. Spot silver rose nearly 1% and hit a daily high of $30.5965 during early European trading, but continued to decline later in the day, hitting a new daily low in the final stretch, dropping more than 1.8% and breaking through the $30 mark.

London industrial metals all fell. Dr. Copper, an economic indicator, fell more than 2.58% to $9,386/tonne. London aluminum fell $17 to $2,385/tonne. London zinc fell more than 1.33% to $2,809/tonne. London lead fell more than 1.57% to $2,157/tonne. London nickel fell $34 to $16,423/tonne. London tin fell more than 4.08% to $31,604/tonne.

International copper fell 2.36% in overnight trading, while Shanghai copper fell 2.17%, Shanghai aluminum fell 0.66%, Shanghai zinc fell 0.91%, Shanghai lead fell 0.30%, Shanghai nickel rose 0.08%, and Shanghai tin fell 2.65%.

Editor / jayden