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The three former Fed officials changed their rhetoric to support interest rate cuts in July: the Federal Reserve needs to act now
Dudley, who called on the Federal Reserve to raise interest rates in 2019, turned into a “pigeon.” He believes that part of the Fed's suggestion that interest rates will not be cut next week is due to their misunderstanding of the labor market. The deterioration of this market will create a self-reinforcing economic feedback cycle. Historical past shows that until now, the labor market has cooled down more quickly, and delaying interest rate cuts will increase the risk of recession. He stressed, “The reality has changed, so I have changed my mind. The Federal Reserve should cut interest rates, preferably at next week's decision-making meeting.”
Nomura: Non-farm payrolls in the US are now growing by 0.2 million per month, which is only 0.1 million before the pandemic
The past year has seen an inexplicable phenomenon in the US labor market — employment growth continues to be strong, and the unemployment rate has not declined but increased. In response, according to Nomura's latest report, with the influx of illegal immigrants, the growth rate of “balanced” non-farm payrolls doubled from 0.1 million to 0.2 million per month before the pandemic, and the impact of non-farm payers on the unemployment rate has already been “reduced by 50%”. It is expected that as the immigration wave declines, this indicator will gradually fall back to a more normal level starting next year.
The US Democratic Party will name Harris and his running partner by August 7
Delegates to the US Democratic National Convention will hold an online meeting in the next two weeks to confirm Vice President Harris' party nomination and his unannounced campaign partner. The conference rules committee overwhelmingly approved the online roll-call process on Wednesday, clearing the final hurdle in identifying candidates before the August 19 conference in Chicago. The candidates Harris is believed to be considering include a number of Democratic governors: Andy Beshear of Kentucky, Roy Cooper of North Carolina, Josh Shapiro of Pennsylvania, and Tim Walz of Minnesota, as well as Senator Mark Kelly of Arizona.
Goldman Sachs Trading Department: US stock trends have triggered CTA and other systemic fund sell-out signals
According to the Goldman Sachs Group trading department's model, the two benchmark stock indexes, the S&P 500 Index and the Nasdaq 100 Index, have both broken through the threshold of triggering a commodity trading advisor (CTA) selling signal. If the bears take over and the stock market continues to fall in the coming month, trend traders may withdraw as much as $219 billion from the global stock market, of which $67.1 billion will flow out of the US market.
The US Markit manufacturing PMI hit a 7-month low in July, while the service sector hit a 28-month high
On Wednesday, July 24, local time, data released by S&P Global showed that the US Markit manufacturing PMI contracted in July, hitting a seven-month low. The service sector and comprehensive PMI were better than expectations and previous values, both hitting new highs of more than two years. According to the analysis, the preliminary data of the US Markit PMI showed that in the early third quarter, there was a Golden-girl scenario where the economy grew at a steady pace while inflation eased somewhat. However, the good news is conditional. The uncertainty brought about by the US presidential election has intensified, curtailing investment and recruitment, and in addition, investment costs are rising at a faster rate.
The US stock market sold off sharply, and the “fear index” hit a three-month high
On Wednesday EST, the sharp sell-off in US stocks brought Wall Street's most watched market volatility indicator to a three-month high and boosted options trading volume, even though strategists saw little sign of panic. Tesla and Alphabet's poor earnings report prompted investors to question whether the 2024 rally driven by big tech companies and artificial intelligence was sustainable. As the stock market plummeted, the Chicago Board Options Exchange Volatility Index (VIX) (Wall Street's Panic Index) rose to 18.46, the highest level since the end of April. According to Trade Alert data, VIX options traded almost twice as fast as usual on Tuesday.
AI fervor subsides, Nasdaq 100 market capitalization evaporates to $1 billion
According to foreign media reports, due to investors' disappointment with the future of artificial intelligence, the market value of the 100 constituent stocks of the NASDAQ evaporated 1 trillions of dollars on Wednesday. The index fell more than 3.6%, the worst performance since October 2022. AI leaders such as Nvidia, Broadcom, and Arm had the highest declines. The “Big Seven US Stocks” index fell 5.9%, falling below the 50-day EMA for the first time since May. Alec Young, chief investment strategist at Mapsignals, said: “Too much money is being spent right now, and investors are aware that it will take some time for the returns to be realized. In the short term, the giants' gains will be affected by how much the market invests in this area.”
Resumption of US stock trading
The three major indices of US stocks collectively plummeted, and the market value of the “Big Seven” of US stocks evaporated by more than 760 billion US dollars
On Wednesday (July 24), by the close, the NASDAQ fell 3.64%, the biggest one-day decline since October 2022 and a new low since mid-June; the S&P 500 index fell 2.32%, the biggest one-day decline since December 2022; and the Dow fell 1.25%.
Major technology stocks generally fell, and Tesla plummeted, the biggest one-day decline since September 2020. The total market value fell below 700 billion dollars; Nvidia fell more than 6%, Meta and Google fell more than 5%, Microsoft and Intel fell more than 3%, Apple and Amazon fell more than 2%, and Netflix fell more than 1%.
Popular Chinese securities generally fell, and the Nasdaq China Golden Dragon Index fell 1.93%. Ideal Auto, Xiaopeng Auto, and NIO fell more than 4%, iQiyi fell more than 3%, Bilibili fell more than 2%, Baidu and Jingdong fell more than 1%, and Pinduoduo, Weibo, and Alibaba fell slightly.
Tesla plummeted 12%, and its total market capitalization fell below 700 billion US dollars
$Tesla (TSLA.US)$Shares fell 11% on Wednesday, and the market value evaporated by nearly $90 billion after CEO Musk's talk about humanoid robots and driverless taxis failed to appease investors worried about the electric car maker's shrinking profit margins. After US stocks closed on Tuesday, Tesla announced its lowest quarterly profit margin in five years, and earnings per share fell short of expectations for the fourth consecutive quarter.
The sell-off caused Tesla's market capitalization to drop to $700 billion. Tesla remains the world's most valuable car manufacturer, and its valuation relies on investors' expectations for huge future profits, which are driven by its promised products such as robo-taxis and robots that have not yet been launched.
Guo Mingyi: Apple will remove iPhone 17 Plus
Guo Mingyi, an analyst at Tianfeng International, said that currently$Apple (AAPL.US)$The Plus only accounts for about 5-10% of the total shipments of the new iPhone, which means that the other three iPhone models (standard version, Pro and Pro Max) have covered the product range of high-end phones very well, and Plus has become an optional model. This new ultra-thin model is not positioned to replace Plus, but rather Apple is trying to find new design trends outside of the existing iPhone product line. The product positioning of the ultra-thin iPhone 17 is not to compete with hardware specifications (processor, camera, etc.), but rather focuses on innovative design. By the close, Apple closed down nearly 3%.
Ford Motor's profit fell sharply by 26% in the second quarter, far below expectations. The full-year guidance was not revised, and fell nearly 12% after the market
On Wednesday, July 24, EST$Ford Motor (F.US)$According to the released financial data for the second quarter, the company's revenue did not decline but increased by more than 6%. EPS profits fell 35% year on year, far exceeding expectations. The EBIT profit of commercial vehicles was more than double that of fuel vehicles, and the increase in automobile warranty reserves affected profits. The electric vehicle business lost more than 1 billion US dollars per quarter in the first half of the year. Ford still expects the business to lose as much as 5.5 billion US dollars for the whole year, raising the annual free cash flow guideline by 1 billion US dollars. Investors were disappointed by not raising the annual EBIT profit guide.
IBM's second-quarter earnings surpassed expectations, and shares rose after the market
$IBM Corp (IBM.US)$Net profit for the second quarter was 1.83 billion US dollars, or 1.96 US dollars per share, compared to 1.58 billion US dollars, or 1.72 US dollars per share for the same period last year. After adjustments, IBM earned $2.43 per share, while analysts tracked by FactSet predicted $2.18. The company's revenue increased from $15.48 billion in the same period last year to $15.77 billion, while FactSet's forecast was $15.62 billion. In Wednesday's after-hours trading, the company's stock price rose by more than 4% at one point.
Ke Lei rose more than 4% after the market, and adjusted earnings per share for the fourth fiscal quarter were higher than expected
Kelei's adjusted earnings per share for the fourth fiscal quarter were $6.60, analysts expected $6.11; revenue for the fourth quarter was $2.57 billion, and analysts expected $2.52 billion; adjusted earnings per share for the first fiscal quarter were $6.40-7.60, and analysts expected $6.49; projected revenue for the first fiscal quarter was 2.6 billion to 2.9 billion US dollars, and analysts expected $2.62 billion.
Wedbush: Failure to reach a deal between Google and Wiz could “start a merger and acquisition cycle”
Wiz Inc., a major player in the cybersecurity field, recently made a major decision and rejected the tech giant$Alphabet-A (GOOGL.US)$The proposed takeover offer of up to $23 billion chose to continue with its initial public offering (IPO) plan.
Wedbush analyst Dan Ives analyzed, “We believe that for$Microsoft (MSFT.US)$, Google, and$Amazon (AMZN.US)$In other words, since last Friday$CrowdStrike (CRWD.US)$Disaster disruptions have further highlighted the interconnectedness of cybersecurity software and cloud ecosystems.” As a result, failure to reach a deal between Google and Wiz may “start a merger and acquisition cycle.” He added that since “integration is long overdue,” Microsoft may be one of the companies seeking a deal in the cybersecurity sector within the next 12 to 18 months.
Weak transactions and the impact of lawsuits! Deutsche Bank lost its first loss in four years in Q2 and announced the abandonment of the buyback
Wednesday July 24, Germany's largest bank$Deutsche Bank (DB.US)$The released financial report for the second quarter of 2024 shows that the company had a net loss of 0.143 billion euros in Q2 and a profit of 0.763 billion euros for the same period last year. Lawsuits involving the acquisition of Deutsche Post Bank prepared 1.3 billion euros, and FIC's sales and trading business revenue growth slowed. Christian Sewing, CEO of Deutsche Bank, confirmed that due to prudential considerations, the company will no longer seek a second repurchase authorization. By the close, Deutsche Bank had plummeted by more than 9%.
Bank of America renews $25 billion share repurchase plan
Bank of America's latest statement said that the board of directors authorized another $25 billion share repurchase program. The second-largest bank in the US said that the new plan will take effect on August 1 and will replace the previous plan of the same scale. As of mid-year, the previous plan left $6.7 billion. “Today's mandate continues to provide greater flexibility in return on capital and is in line with the company's commitment to return excess capital to shareholders,” the Charlotte, North Carolina-based company said in a statement Wednesday. Bank of America fell slightly by 0.52% by the close.
Top 20 US stock turnover
Hong Kong Market Outlook
Beishui sells Meituan over HK$0.6 billion and buys ICBC over HK$0.3 billion
On July 24 (Wednesday), Southside Capital sold Hong Kong stocks net of HK$75.7 million.
$ICBC (01398.HK)$,$SINOPEC CORP (00386.HK)$,$CCB (00939.HK)$Net purchases of HK$0.325 billion, HK$0.165 billion and HK$0.132 billion respectively;
$MEITUAN-W (03690.HK)$,$TENCENT (00700.HK)$,$HKEX (00388.HK)$Net sales were HK$0.631 billion, HK$0.248 billion, and HK$0.172 billion respectively.
Today's attention
Keywords: US GDP for the second quarter, number of jobless claims at the beginning of the week, speeches by Federal Reserve officials, American Airlines earnings report
On Thursday, in terms of economic data, the US will release a series of major data such as the number of jobless claims at the beginning of the week, the initial annualized quarterly rate of the core PCE price index, the initial value of the annualized quarterly rate of real GDP, and the monthly rate of durable goods orders.
In terms of financial reports,$Hermes International SA (HESAY.US)$,$British American Tobacco (BTI.US)$,$American Airlines (AAL.US)$Results will be announced later.
In terms of IPOs, US cold chain logistics giants$Lineage (LINE.US)$Five other companies will go public today.
Futubull Chen read:
There's no shame in the mistake; it's shameful that the error is already obvious and still hasn't been fixed!
—George Soros
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