Source: Global Market Report On Monday, the turnover of US stocks ranked first, closing up 0.75% with a turnover of $38.014 billion. Since the opening on June 10, Nvidia's stock has been trading at adjusted prices after the split. The overall value of Nvidia is not expected to change after the split, and the lower stock price will make it easier for investors to reach. In terms of product structure, the operating income of 10-30 billion yuan products is respectively 401/1288/60 million yuan.
On the evening of the 25th Beijing time, US stocks opened with mixed gains and losses on Thursday, and the major stock indexes attempted to stabilize their positions after a sharp drop yesterday. At the time of publication, $Dow Jones Industrial Average (.DJI.US)$up 0.24%,$Nasdaq Composite Index (.IXIC.US)$down 0.44%,$S&P 500 Index (.SPX.US)$down 0.09%. After Ford Motor released its financial report, the stock price plummeted. The second-quarter GDP growth rate in the United States exceeded expectations, inflation fell, and expectations of rate cuts in September were not affected.
The financial report continues to be the focus of the market. $Ford Motor (F.US)$The stock price plummeted as the company's second-quarter earnings were far below analysts' expectations.
$Chipotle Mexican Grill (CMG.US)$Announced profits and revenues exceeded expectations due to increased restaurant traffic.
$IBM Corp (IBM.US)$And.$ServiceNow (NOW.US)$All announced performances exceeded expectations.
Despite some large technology companies underperforming in expectations this week, the overall performance of the second quarter of this year has been positive. According to FactSet data, over 25% of companies in the S&P 500 index have reported earnings for the second quarter.
On Wednesday, US stocks fell sharply, with the S&P 500 and Nasdaq Composite recording their largest single-day declines since 2022, while the Dow Jones Industrial Average fell more than 500 points. $Alphabet-A (GOOGL.US)$And.$Tesla (TSLA.US)$weighed down by disappointing quarterly reports from $NVIDIA (NVDA.US)$And.$Microsoft (MSFT.US)$and other heavyweight technology companies.
The recent volatility in the market has increased, and Wall Street's panic index has risen to a three-month high. Investors are looking for safety in cash and super-liquid short-term debt. The yield on US two-year government bonds hit a nearly six-month low on Wednesday.
Investors see the continuous decline of the US stock market as a sign that the market has been overbought and should have experienced a pullback earlier. The theme of the US stock market has now changed from large-cap technology stocks to sector rotation of small-cap and cyclical stocks.
Adam Crisafulli, an analyst at Vital Knowledge, said: “The problem with technology stocks is not only that their performance is not good enough, but they are also trapped in violent sector rotation trades that began after the release of the June CPI. Many people think that the sector rotation that sells technology stocks is temporary, but it turns out to be persistent. This exacerbates anxiety over technology stocks and brings additional selling pressure.”
Yung-Yu Ma, chief investment officer of BMO Wealth Management, said: “We do have a lot of uncertainty now… In addition, at least in the short term, I think there is a lot of skepticism around the profitability of artificial intelligence (AI) and its contribution to productivity improvements. The current market is completely in a ‘show me’ state, and everyone wants to see evidence in a shorter period of time.”
But he said that there are some healthy sectors in the market, such as cruise companies and American infrastructure concept stocks. He added that large technology companies will still struggle for some time until they can regain their footing and give more evidence of their artificial intelligence-related achievements.
Homin Lee, senior macro strategist at Lombard Odier Singapore, said: “People seem to be reassessing the cost and benefit calculations of the AI ecosystem. Concerns about consumer demand still exist because US data shows signs of slowing down. These concerns may ultimately be temporary, but it is natural to reassess them after such a strong rebound.”
Analysts said: “After encountering multiple unfavorable factors so far this year, the S&P 500 index has still risen by about 14% so far this year, and this year's irrational prosperity in the US stock market still exists. We expect a possible correction of up to 10% to 15% this quarter, which may be the worst period of the year from a historical data perspective.”
As for economic data on Thursday, the US Bureau of Economic Analysis reported that the real GDP annualized quarter on quarter growth rate for the second quarter of the United States was 2.8%, higher than the expected value of 2%, and the previous value was 1.4%. The second-quarter core personal consumption expenditure (PCE) price index of the United States increased by 2.9% on a year-on-year basis, higher than the expected value of 2.7%, and the previous value was 3.7%. The second-quarter economic growth rate in the United States exceeded expectations, indicating that demand remains strong under the heavy pressure of borrowing costs.
Despite the unemployment rate reaching a two-and-a-half-year high of 4.1%, the US economy is still supported by the resilience of the labor market. Core PCE growth slowed to 2.9% in the second quarter after soaring 3.7% in the first quarter, which is good news for the Fed next week. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.
Institutions believe that the US economy is growing faster than expected and inflation has fallen slightly, and the expectation of interest rate cuts has not been affected. US Q2 economic growth was faster than expected but inflation fell slightly, and the expectation of a Fed rate cut in September was not affected.
Analysts pointed out that the closely watched potential inflation index, the Core PCE Index, rose 2.9%, slowing from the first quarter but still higher than expected. Despite the growth rate accelerating from the first quarter, these data are still slowing down from last year. Under the heavy pressure of high interest rates, consumer spending and broader economic activity have cooled, which also helps to gradually suppress inflation. This is good news for the Fed. The Fed is working hard to achieve an economic soft landing, and may begin to cut interest rates as early as September.
The market fully expects the Fed to cut interest rates by 25 basis points in September, and there is even a risk of a 50 basis point cut. By 2024, the market has priced in a total of 65 basis points of easing.
Andrew Lilley, Chief Interest Rate Strategist at Barreyjoey, said: "Expectations of interest rate cuts are very high, just like last year. I am worried that the market is leading economic data because we have seen before that short-term inflation declines have not been sustained."
The US Department of Labor reported that the number of initial jobless claims for the week ended July 20 was 0.235 million, expected 0.238 million, and the previous value was 0.243 million. The number of initial jobless claims for the week ended July 20 was 0.2355 million, the previous value was 0.23475 million. The number of continued claims for unemployment benefits for the week ending July 13 was 1.851 million, expected 1.86 million, and the previous value was 1.867 million.
Focus stocks
Growth tech stocks have fallen more than they have risen, with Tesla up more than 3%, Micron Technology down more than 2%, Nvidia and Qualcomm down nearly 2%, and AMD, Google, Intel and others down more than 1%.
UBS believes$Tesla (TSLA.US)$"The profitability of AI projects is still far away, but the market has given it too high expectations for development, which has led to its stock price far exceeding its fair value. The bank reiterated its "sell" rating on Tesla."
Tesla CEO Musk said on Tuesday that Tesla's value lies mainly in its autonomous driving technology, but UBS points out that the challenge is that its implementation time and probability of success are not clear.
Jefferies believes Tesla's Q2 performance did not significantly improve market expectations, maintaining its "hold" rating with a target price of $165.
Nvidia partner SMC is reportedly raising $950 million to stimulate business development in the AI server boom.
$Advanced Micro Devices (AMD.US)$Introduced a brand-new Zen 5 series architecture at COMPUTEX 2024, and released consumer-grade processors based on the new architecture, including the Ryzen 9000 series for desktops and the Ryzen AI 300 series for mobile devices. All of the Ryzen 9000 series uses the Zen 5 core, while the Ryzen AI 300 series uses a hybrid design that includes the Zen 5 and Zen 5c cores.
Market research firm Canalys pointed out that$Apple (AAPL.US)$iPhone shipments in China fell by more than 400,000 in Q2, with Apple's market share in China at 14%, down from 16% in the same period last year. The company's shipments fell by about 3.9%, while Android phones such as Vivo and Xiaomi with price concessions grew significantly.
Insiders said that there is currently no indication that Microsoft plans to limit$CrowdStrike (CRWD.US)$access to its Windows operating system. Previously, due to a "defect" in Crowdstrike's software update, around 8.5 million Microsoft devices installed with the system were affected by technical malfunctions.
$Alphabet-A (GOOGL.US)$down more than 1%. Researchers have studied 200 news reports on the misuse of generative AI, finding that false information created by generative AI is rampant on the Internet. Ironically, Google is one of the important manufacturers of these false information.
$Meta Platforms (META.US)$Will release its Q2 2024 earnings report on July 31. Citi predicts that this quarter, Meta may achieve double growth in revenue and operating profit. The report will focus on the market's most concerned and core issues affecting Meta's valuation, centered around Hard AI.
$Ford Motor (F.US)$Stock prices have fallen by more than 16%. The company's Q2 revenue was $47.8 billion, up 6.2% year-on-year, and its operating profit before taxes was $2.8 billion. Total revenue for the first half of the year was $90.6 billion, up 4.8% year-on-year; net profit was $3.2 billion, and operating profit before taxes was $5.5 billion. Of which, the sales volume of FordModele electric vehicle business in Q2 was 0.026 million vehicles, with revenue of $1.1 billion and an operating loss of $1.1 billion, which is an average loss of $0.0423 million per electric vehicle (about RMB 0.306 million yuan).
$American Airlines (AAL.US)$Stock prices rise more than 4%. The company's second-quarter adjusted earnings per share were $1.09, up from the estimated $1.05. Bernstein cut American Airlines' target price from $18 to $12, downgraded from 'outperform' to 'underperform'.
$IBM Corp (IBM.US)$Stock prices rise more than 3%. Second-quarter revenue increased 2% YoY to $15.8 billion, higher than analysts' expected $15.6 billion; adjusted earnings per share were $2.43, higher than analysts' expected $2.2. Since mid-2023, IBM's artificial intelligence consulting and AI software bookings have exceeded $2 billion, which is twice as much as the approximately $1 billion business disclosed in the previous quarter's earnings report in April. In addition, IBM expects free cash flow to exceed $12 billion for the full year.
Goldman Sachs raised IBM's target price from $200 to $205. JPMorgan raised IBM's target price from $185 to $190.
$Unilever (UL.US)$Substantial operating profit in the first half of the year rose 17% YoY to €6.1 billion, revenue rose 2.3% YoY to €31.117 billion, and net profit rose 4.3% YoY to €3.701 billion. In the second quarter alone, real sales growth was 3.9%, lower than the market's expected 4.2%. The real price of products increased 1% during the quarter, and real sales volume increased 2.9%. The company maintains its forecast of 3%-5% growth in real sales for the year, and the real operating profit margin for the full year is expected to be 18%.
Automotive Production Group$Stellantis NV (STLA.US)$Stock prices fell more than 8%. The company's first-half profit fell 48% to €5.6 billion, far below the market's average expectation of €7 billion, affected by the reduction in sales volume and product mix, as well as the adverse effects of foreign exchange and restructuring costs. Revenue also fell 14% to €85 billion. Carlos Tavares, the company's CEO, said that the company's performance in the first half of the year did not meet expectations, which reflects both the challenging industry environment and the company's own operational problems. The company is taking corrective measures to address these issues and expects to save an additional €0.5 billion in costs in the second half of the year.
$Chipotle Mexican Grill (CMG.US)$Stock prices fell nearly 3%. The company announced its second-quarter results and benefited from increased passenger traffic. Profit increased 33% YoY to $0.456 billion, with adjusted earnings per share of $0.34, higher than the expected $0.32. Revenue increased 18% YoY to $2.97 billion, slightly higher than the market's expected $2.94 billion. Same-store sales grew 11.1%, exceeding the market's expected 9.2%. The company reiterated its full-year performance expectations, with same-store sales expected to increase by a high single-digit percentage, and plans to open 285 to 315 new stores this year.
Editor/Jeffy