Source: Wall Street See
US stocks rose, with the S&P up more than 1%, the largest weekly gain in seven weeks, and the Nasdaq up 1.6%. Funds returned to small-cap stocks, with the small-cap index up 1.7%. Investors took advantage of the low prices to buy US tech stocks, and only Apple and Amazon among the seven sisters of technology fell, while Tesla and Nvidia rose by about 5%. Cybersecurity leader CrowdStrike, which caused a global IT failure, fell more than 13% and erased most of this year's gains. Some 'Trump trades' cooled down, electric car and photovoltaic stocks rose, and oil stocks turned lower.
There were more variables in the US presidential election over the weekend, causing safe-haven demand to pull down US bond yields and the US dollar, driving up gold, followed by fading panic, with the VIX volatility index falling 10% from the highest level in nearly three months. The China concept index rose strongly by 2.8%, and offshore renminbi fell more than 110 points to a two-week low. Oil prices fell more than 1% and metals plummeted.
Since the first debate in June, the chances of a Trump victory have increased, and the market is generally bullish on the 'Trump trade.' But Biden's withdrawal has increased uncertainty about the US election. Real-time polling results show Trump's support has declined. The market is evaluating the Democrats' chances of winning, with stocks expected to benefit from a Democratic victory, such as renewable energy, solar energy, electric car manufacturers, and marijuana stocks beginning to rise, while 'Trump trades' such as oil and natural gas, finance, and medical care stocks begin to cool.
Wall Street is discussing political uncertainty, and risk aversion is on the rise. At the beginning of the session, the US dollar and US bond yields fell together, supporting precious metal prices and pushing up oil prices. Later, the panic subsided, and the US dollar rebounded slightly. US bond yields rose across the board, pushing down commodities.
Investors are focused on Harris's oil industry policies, with analysts saying that if Harris is likely to become the Democratic candidate and win the presidency, she may adopt a more aggressive environmental policy than Biden, strengthening regulation of oil companies and other polluting enterprises. As a tough prosecutor and attorney general in the California region, she is known for her tough stance against oil giants, and is a stronger opponent of the oil industry than Biden.
This week, market focus will shift to the earnings reports of large companies, with Tesla and Google's earnings reports taking centre stage. In addition, US Q2 GDP and PCE inflation data will also be released on Thursday and Friday this week, and the market will also closely watch the issuance of 2-, 5-, and 7-year US treasuries.
Small-cap stocks led the gains, with the S&P large-cap index recording its largest single-day gain since early June, and Nvidia's rise of 4.76% leading the chip stocks higher, with the Nasdaq up nearly 1.8%
On Monday, July 22nd, the major US stock indexes accelerated their gains at midday. The Nasdaq, mainly composed of technology stocks, jumped nearly 1.8%; the Nasdaq 100 jumped more than 1.7%; the large-cap S&P 500 index rose nearly 1.2%; the blue-chip Dow Jones Industrial Average, which initially turned negative and fell more than 0.16%, later rose more than 0.14% to refresh its daily high; and the Russell 2000 small-cap index surged nearly 1.8%.
As of the close, the major US stock indexes closed at a daily high. Small-cap stocks had relatively the largest gains among the main indexes. The Nasdaq and Nasdaq 100 stopped their three-day decline. The large-cap S&P 500 index registered its largest single-day gain since early June. Last week, the S&P large-cap index and the Nasdaq both had their worst weekly performance in three months, and the Dow Jones Industrial Average lagged behind but closed up. The chip index rose 4%:
The S&P 500 index rose 59.41 points, or 1.08%, to 5564.41. The Dow Jones Industrial Average rose 127.91 points, or 0.32%, to 40415.44. The Nasdaq rose 280.63 points, or 1.58%, to 18007.57.
The Nasdaq 100 rose 1.54%; the Nasdaq Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of the Nasdaq 100's technology industry components, rose 2.19%; the Russell 2000 index rose 1.66%; and the panic index VIX fell 9.81%, closing at 14.90.
Of the 11 sectors in the S&P 500, the information technology/tech sector rose 1.96%, communications services rose 1.2%, the industrial sector rose 1.07%, the real estate sector rose 0.98%, the utilities sector rose 0.87%, the non-essential consumer goods sector rose 0.87%, the financial sector rose 0.64%, the healthcare sector rose 0.57%, the raw materials sector rose 0.34%, the essential consumer goods sector fell 0.04%, and the energy sector fell 0.72%.
On Monday, according to Goldman Sachs brokerage business data, as of the week ending July 19, both long and short positions of hedge funds had decreased, continuing the trend of selling since May. The pace at which hedge funds sold US stocks was the fastest since January 2021, with cash as king ahead of the November US presidential election.
Lisa Shalett, Chief Investment Officer for Morgan Stanley Wealth Management, stated that with the expected interest rate cut, steepening yield curve, weakening US dollar, and profit growth expanding to non-"Big Seven" companies, stock sector rotation in the US is expected to continue. The prospect of a Republican victory in November may inspire a "animal spirit" for small-cap stocks, but the fundamentals still do not support chasing small-cap stocks, as the trend may not be sustainable. Compared to small-cap stocks, large-cap stocks are more bullish on downside resistance. Large-cap stocks and high-quality cyclical stocks are Morgan Stanley's top picks. Recommended are REITs in the sectors of finance, energy, industry, aviation/space/defense, select power generation/grid infrastructure and residence.
The 'Seven Sisters of Technology' rose, with Tesla up 5.15%, Nvidia up 4.76%, Google A up 2.26%, Meta up 2.23%, Microsoft up 1.33%, while Apple fell 0.16% and Amazon fell 0.32%.
Chip stocks rose across the board. The Philadelphia Semiconductor Index rose 4%, and the industry ETF SOXX rose 4.14%; NVIDIA's double long ETF rose 9.68%; Rambus rose 9.14%, leading the constituent stocks in the Philadelphia Semiconductor Index, TSMC's US stocks rose 2.16%, Qualcomm rose 4.7%, Lam Research rose 6.54%, Applied Materials rose 6.28%, KLA Corp rose 6.16%, and NXP Semiconductors rose 5.39% before the earnings report was released. The performance of GigaDevice rose by more than 1.3%, while Micron rose by about 0.9%, Arm Holdings rose by 0.09%, and Super Micro Computer fell by 1.32%.
Most AI concept stocks rose. NVIDIA's 2.0 version concept stock Serve Robotics rose by more than 16.1%, continuing its 187.07% increase from last Friday; NVIDIA's concept stock SoundHound rose by more than 1%; LivePerson rose by 30.3%, Salesforce rose by 2.6%, Snowflake rose by 1%, while CrowdStrike fell by 13.46%, Jet.AI fell by 15.11%.
China concept stocks rose collectively. The KraneShares CSI China Internet ETF (KWEB) rose 2.64%, the Invesco China Technology ETF (CQQQ) once rose 1.77%, and the NASDAQ Golden Dragon China Index (HXC) rose 2.77%.
Among the popular China concept stocks, NIO rose by 5.16%, XPeng rose by 6.51%, Cheetah Mobile rose by 6.1%, Li Auto rose by 4.18%, Bilibili rose by 2.06%, JD.com rose by 2.25%, Tencent Holdings (ADR) rose by 3.3%, Alibaba rose by 1.82%, Baidu rose by 2.1%, NetEase rose by 2.33%, Pinduoduo rose by 0.9%.
Among stocks with significant volatility:
After causing a global IT system crash last week, the stock price of cybersecurity company CrowdStrike continued to plummet, eventually falling by 13.46%. In addition, Delta Air Lines fell by 3.54%, and more flights are expected to be canceled this week (due to Microsoft + CrowdStrike service interruption issues).
The 'Trump trade' cools down, and Trump media technology (DJT) rose by 0.83%, after initially falling nearly 5%.
Tesla rose by 5.15%. Earlier, Musk stated on social media that Tesla will produce humanoid robots on a small scale next year for internal use by Tesla, and is expected to mass produce them for other companies in 2026.
AMC Entertainment announced a debt refinancing agreement, extending the duration of up to $2.45 billion in debt, and it is expected that box office revenue will grow strongly in the next two and a half years. After a short-term dip in the stock price, AMC Entertainment rose by 2.4%, triggering a temporary trading halt during trading hours; after trading resumed, the stock price rose by nearly 15% and finally closed up by 5.39%.
The automotive industry is weak. NXP Semiconductors' third-quarter revenue guidance is not good, and it fell more than 8% after hours. In terms of performance guidance, NXP Semiconductors expects that in the third quarter, non-GAAP revenue will be between $3.15 billion and $3.35 billion, with a median of $3.25 billion, while analysts expect it to be at the high end of the guidance range, at $3.35 billion. Based on this estimate, NXP Semiconductors' revenue in the third quarter may accelerate its decline, with a maximum YoY decline of nearly 8.2% and a minimum decline of more than 2.3%.
Driven by AI demand, SAP's cloud revenue surged by 25% in the second quarter and rose by over 5% after hours.
Buffett's subsidiary Hawaiian Electric (HE) fell by 14.28%, and it fell by about 21% during trading hours. After rising by 37.33% last Friday, it gave back most of the gains.
European stock markets collectively rose this week, with the German, French, Italian and Dutch stock indexes all rising by more than 1%:
The pan-European Stoxx 600 index ended its five-day decline, closing up 0.93% at 514.79 points. The Euro STOXX 50 index rose 1.45% to 4,897.44 points, ending its five-day decline. The six-day cumulative decline narrowed to 2.89%.
The German DAX 30 index rose 1.29%. The French CAC 40 index rose 1.16%. The Italian FTSE MIB index rose 1.17%. The UK FTSE 100 index rose 0.53%. The Dutch AEX index rose 1.06%. The Spanish IBEX 35 index rose 0.51%.
Among the stocks with large fluctuations, Ryanair (RYA.ID) fell by 17.15%, marking its worst performance since March 2020. Prior to this, this low-cost airline announced that its quarterly after-tax profit fell by 46% for the three months ended in June, and summer airfare prices will be lower than expected.
The long-end US Treasury yield rose by more than 2 basis points amid the 'Trump trade' uncertainty.
At the end of the trading day, the two-year US Treasury yield, which is more sensitive to monetary policy, rose by 1.04 basis points to 4.5213%, trading between 4.4937% -4.5404% during the trading period. The yield on 10-year US Treasury bonds rose by 1.56 basis points to 4.2545%, trading between 4.2019% -4.2760% during the trading period. A significant upward trend appeared from 23:00-00:30 Beijing time.
The yield of 10-year German bonds, the eurozone benchmark, rose 2.9 basis points at the close, hitting a daily high of 2.496%. Earlier in the European stock market, it had fallen to a daily low of 2.443%. The yield on two-year German bonds rose 4.6 basis points, hitting a daily high of 2.830%. Earlier in the European stock market, it had fallen to a daily low of 2.769%.
The yield of France's 10-year bonds rose 1.7 basis points, while that of Italy's 10-year bonds fell 0.5 basis points, and that of Spain's 10-year bonds rose 1.3 basis points. The yield on Greece's 10-year bonds fell 0.1 basis point. The yield of UK's 10-year bonds rose 3.8 basis points, hitting a daily high of 4.162%.
According to The Times, the UK government's pay rise has fallen short of industry expectations. Several independent salary assessment agencies have suggested that 1.8 million teachers and medical workers in the UK are calling for a 5.5% pay rise, compared to the Labour government's budget of just 3%.
Oil prices fell to a five-week low for two consecutive days, with investors watching Harris's oil industry policies, while US natural gas rebounded nearly 6%.
Higher US bond yields weighed on oil prices. WTI August crude futures fell 0.35 dollars, or about 0.44%, to 79.78 dollars a barrel, hitting their lowest level in five weeks. Brent September crude futures fell 0.23 dollars, or about 0.28%, to 82.40 dollars a barrel.
In early Asian trading, lower US bond yields and a weaker US dollar supported higher oil prices, with US crude rising nearly 0.7% at its daily high and Brent oil rising more than 0.7% to break through the 83 dollar mark. During European share trading, US and Brent crude oil both fell sharply, hitting their daily lows during early US share trading, with US crude falling by nearly 1.2% and Brent crude falling by more than 1.2% to push below the 81 dollar integer mark, both hitting their lowest levels since mid-June.
Biden has decided not to run for re-election, and some oil analysts predict that Trump will win and push for higher US oil production, which will be unfavorable for long-term oil prices.
US natural gas futures rose 5.78% in August, to $2.2510 per million British thermal units. Europe's TTF Dutch natural gas futures fell 1.03%, to 31.839 euros per megawatt-hour, while ICE UK natural gas futures rose 2.21% at the close, to 80.76 pence per thousand BTUs.
The US dollar index was flat and down about 0.1%, with the yen up about 0.3% to test 156.
The DXY basket, which measures the dollar against six major currencies, fell 0.06% to 104.331, trading between 104.181-104.424 points during the day.
According to Bloomberg, the US dollar index fell 0.09% to 1255.25 points, with an intraday range of 1253.37-1256.09 points, and was down all day.
Standard Chartered said in a customer report that despite former US President Trump publicly stating his preference for a weaker dollar, most of his policies would lead to short-term inflation, higher interest rates and a stronger dollar. Steve Englander, global head of G-10 forex research and North American macro strategy at Standard Chartered, said that if Trump implements his policy agenda, the dollar is unlikely to fall on its own, at least not initially.
Non-US currencies rose across the board. The euro rose 0.07% against the US dollar, the pound rose 0.15% against the US dollar, and the US dollar rose 0.08% against the Swiss franc.
Offshore renminbi (CNH) fell 106 points against the US dollar to 7.2961 yuan, with overall trading during the day between 7.2781-7.2972 yuan.
Among Asian currencies, the US dollar fell 0.29% against the yen, to 157.03 yen, with intraday trading ranging from 157.61-156.29 yen. The euro fell 0.24% against the yen, to 170.99 yen, and the pound fell 0.17% against the yen, to 203.036 yen.
CoinShares' latest data shows that as cryptocurrency prices hit their highest level in over a month, funds continued to flow into the sector. Bitcoin ETFs recorded $1.27 billion in inflows last week, marking the fourth consecutive week of inflows for the category, which has seen total inflows of more than $3.1 billion in four weeks. In stark contrast, in the two weeks before the four consecutive weeks of inflows, funds totaling $1.2 billion were withdrawn from Bitcoin ETFs.
As risk aversion rose in the market, spot gold rose and then fell, with a weaker US dollar supporting a breakthrough of $2410 before falling back below $2390 an ounce.
Rising US bond yields are putting pressure on precious metal prices. COMEX August gold futures fell slightly by 0.16% to $2395.2/ounce in the afternoon, while COMEX September silver futures fell slightly by 0.08% to $29.275/ounce.
Due to the increasing uncertainty of the US election, market risk aversion has increased. Spot gold rose in early Asian trading and rose to more than $2410/ounce, with a daily increase of 0.47%. During European trading, the gold price started to plummet and hit a new daily low during pre-market trading in the US, falling nearly 0.7% and breaking through the $2390/ounce mark for the first time since July 11th. It erased more than half of the decline towards the end of the trading day, once again approaching the $2400 mark.
Spot silver also hit a daily high of $29.4335 in early Asian trading, with a daily increase of nearly 0.73%, and then oscillated downward. During pre-market trading in the US, it fell more than 1.6% and broke through the $29 integer mark, but largely erased the decline towards the end of the trading day.
Analysis suggests that Biden's withdrawal from the race has temporarily halted Trump's trade, and the weakening US dollar has helped boost gold prices in early Asian trading. UBS analysts said that if personal consumption expenditures (PCE) and other data favored by the Fed continue to show economic slowdown on Friday of this week, there is still a possibility of a rate cut in July, providing more upward space for gold prices, with a target price of $2600/ounce by the end of the year. However, some analysts have expressed concerns. At present, the gold price has reached near historical highs, but the Fed's subsequent rate cuts are still unclear, so it is not rational to chase gains.
London's basic industrial metals all fell. Dr. Copper, the economic barometer, fell $94, or nearly 1.01%, to $9216/ton. London aluminum fell $52, or about 2.22%, to $2300/ton. London zinc fell $50, or 1.80%, to $2726/ton. London lead fell $45, or 2.11%, to $2083/ton. London nickel fell $66, to $16190/ton. London tin fell $1162, falling below $0.03 million, or more than 3.74%, to $29888/ton.
Editor / jayden