Source: Wall Street See
Authors: Fang Jia Yao, Du Yu, Zhang Yaqi, Bu Shuqing.

The number of initial jobless claims in the United States last week fell back above expectations to 0.233 million, easing market concerns about a recession in the US economy. The confidence of investors increased, driving US stocks to open high and rise. The Nasdaq rose more than 3%, and chip stocks rose by about 7%. The yield on 10-year US Treasury bonds rose above 4%. Poor demand for US 30-year Treasury bond auctions also exacerbated the situation of selling off US bonds, and short-term yields rose by as much as 10 basis points. At the same time, European stocks flattened some of their declines in the evening, the US dollar strengthened, and crude oil, Bitcoin, and gold also rose.

However, the number of continued jobless claims refreshed the highest level in nearly three years since November 2021. JPMorgan has raised the probability of a US economic recession from 25% to 35% this year, and Goldman Sachs has already raised its forecast from 15% to 25% over the weekend, but believes that a recession can be avoided. This year, Richmond Federal Reserve Chairman Barkin said that the FOMC has time to assess whether the US economy is normalizing, and that the US may fall into a long-term shortage of workers. Trump said his intuition was stronger than Powell's and that the president should have some say in Federal Reserve policy.

US stocks rose across the board, and the S&P 500 index posted its largest single-day gain in 21 months, while the Nasdaq led the way with a 2.87% rise. The Philadelphia Semiconductor Index gained 6.86%, and Nvidia rose 6.13%:

• US stock indexes continued to rise and closed at daily highs. The S&P 500 index rose 2.30% to 5319.31 points. The Dow rose 1.76% or 683 points to 39446.49 points. The Nasdaq rose 2.87% to 16660.02 points. The Nasdaq 100, which measures the performance of technology industry stocks in the Nasdaq 100 index, rose 3.06%. The Nasdaq Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 technology industry component stocks, rose 3.78%. The Russell 2000 Index rose 2.42%. The panic index VIX fell 14.47% to 23.82.

• After reaching a daily high in the afternoon, the Nasdaq, which is dominated by technology stocks, rose more than 3%; the S&P 500 index rose nearly 2.4%; the Dow, which is closely related to the economic cycle, rose more than 744 points or 1.9%; and the Russell 2000 small-cap stock index rose more than 2.4%. The chip index rose 6.86%, and the Chinese concept index rose as much as 2.9%.

• US industry ETFs closed higher across the board. The semiconductor ETF rose more than 6%, the global aviation industry ETF, technology industry ETF, and global technology stock ETFs each rose nearly 4%, the biotechnology index ETF and the Internet stock index ETF both rose by almost 3%, and the medical industry ETF, optional consumer ETF, energy industry ETF, bank industry ETF, regional bank ETF, and financial industry ETF all rose by around 2%.

• Eleven sectors of the S&P 500 index closed mostly higher. The information technology/technology sector rose 3.31%, the telecom sector rose 2.41%, the industrial, healthcare, optional consumer, and energy sectors rose the most, up to 2.3%, and the utility sector rose 0.15%, performing the worst.

• The "Magnificent Seven" of technology collectively rebounded. Nvidia led the way with a 6.13% rise, regaining the $100 level, Tesla rose 3.69%, Apple rose 1.66%, "metaverse" Meta rose 4.24%, Google A rose 1.94%, Amazon rose 1.86%, and Microsoft rose 1.07%.
  

• Chip stocks rose across the board. The Philadelphia Semiconductor Index rose 6.86%; the industry ETF SOXX rose 6.9%; and Nivida's double-long ETF rose 12.72%. On Semiconductor rose 8.8%, Micron Technology rose 6.07%. Taiwan Semiconductor's US stock rose 6.13%, Arm Holdings rose 10.59%, Qualcomm rose 5.66%, Broadcom rose 6.95%, KLA Corp. rose 7.82%, Applied Materials rose 6.74%, ASML Holding ADR rose 4.82%, Intel rose 7.9%, and AMD rose 5.95%.

• AI concept stocks rose collectively. "AI demon stocks" Super Micro Computer rose by 3.5%, BullFrog AI by 5.31%, Oracle by 2.43%, CrowdStrike by 4.27%, C3.ai by 6.2%, Palantir by 11.25%, SoundHound AI, an AI voice company held by Nvidia, rose and fell by 21.16%, BigBear.ai by 3.36%, Dell Technologies by 4.06%. Snowflake rose 5.65%. While Serve Robotics, an AI robot delivery company held by Nvidia, fell by 2.24%.

• China concept stocks generally rose, and the Nasdaq Golden Dragon China Index rose 2.8%. Among ETFs, the KraneShares CSI China Internet ETF (KWEB) rose 2.79%, and the Invesco China Technology ETF (CQQQ) rose 2.29%. Among popular China concept stocks, New Oriental rose 0.26%, Netease rose 2.15%, Tencent Holdings (ADR) rose 3.44%, PDD Holdings rose 3.66%, Alibaba rose 3.19%, JD.com rose 2.57%, Baidu rose 5.52%, Kuaishou rose 0.86%, Xiaopeng rose 3.51%, Nio Inc rose 4.09%, Ideal rose 2.6%, while Bilibili fell 2.54%.

• Gold and silver mining stocks generally rose. Coeur Mining rose 5.08%, Harmony Gold Mining, Hecla Mining, and ASM rose up to 4.31%, Barrick Gold rose more than 3.1%, the gold mining stock ETF GDX rose more than 2.4%, and the gold miner factor index ETF rose 2%.

• Cryptocurrency and blockchain concept stocks rose collectively. The ProShares Ultra Bitcoin ETF rose more than 17%, Bitfarms rose 22.02%, Stronghold rose more than 19.9%, Bit Digital rose more than 18.4%, the ProShares Ultra Bitcoin ETF rose more than 17.2%, Canaan ADR rose about 9.7%, the Ethereum ETF QETH rose more than 9.6%, and "Bitcoin holding guru" MicroStrategy rose about 9.1%, while the Bitcoin Strategy ETF rose about 9.0%

• Among other stocks that experienced significant changes due to financial reports: (1) Eli Lilly and Co. rose more than 13% during the trading day and continued to rise more than 9%, leading a group of weight-loss drug concept stocks. Viking Therapeutics rose nearly 10%, Novo Nordisk ADR rose nearly 8%, and Shockwave Medical ADR narrowed its gains to just over 1%. Eli Lilly's second-quarter revenue and operating profit have both exceeded expectations, due to strong sales of its weight-loss drug, raising its full-year revenue guidance to $3 billion. (2) Novavax, which fell more than 17% at the opening before rebounding 9%, despite disappointing second-quarter results. (3) Athletic apparel retailer Under Armour rose 19%, achieving its largest single-day gain since 2018, with earnings per share and revenue in the second quarter exceeding expectations. (4) SoundHound, an AI concept stock held by Nvidia, rose nearly 12% before turning negative, with second-quarter adjusted EBITDA losses worse than expected. (5) In media stocks, ViacomCBS will cut 15% of its workforce in the United States and rose more than 5% after hours. Warner Bros. Discovery once fell nearly 13%, writing down $9.1 billion in TV network-related assets, and second-quarter revenue being lower than expected.

• In terms of news, Amazon's $4 billion investment in Anthropic is facing antitrust scrutiny in the UK. Apple plans to launch the smallest desktop computer Mac Mini in history this year and upgrade it to the M4 self-developed chip to support AI functions. Palantir, an AI concept stock, rose more than 11% and will cooperate with Microsoft to sell AI functions to US defense and intelligence agencies. Microsoft rose 1%. Delta Air Lines expects software system malfunctions to cause $380 million in direct losses to the company in the third quarter, and the company will sue CrowdStrike and Microsoft for this.

Boosted by US job data, European stocks rose slightly at the end of the day, with mixed gains and losses:

• The Stoxx 600 fell slightly at the beginning of the day, mostly down throughout the day, with gains and losses in various sectors, with media and chemical stocks down 0.6%, and tourism stocks up 1.28%. Boosted by US job data, European stocks rose slightly at the end of the day, closing up 0.08%.

• Major regional stock indices rose and fell, with the French stock index down 0.26%, the British stock index down 0.27%, the Spanish stock index down 0.39%, the Italian stock index down 0.28%, while the German stock index rose 0.37%.

• Among other stocks that experienced significant changes due to financial reports: Siemens, the German industrial giant, reported better-than-expected quarterly operating profit, and the Siemens European stock rose 2.09%.

After the number of initial jobless claims in the United States unexpectedly fell last week, concerns about the US labor market and economic recession eased. The 10-year US Treasury bond yield, which is closely related to the economic trend, surpassed the 4% mark. The lack of demand for 30-year US Treasury bond auctions led to an increase in selling during the midday US stock market, and US Treasury bond yields hit their daily high.

• US Treasury: The highest yield on 10-year US base bonds rose nearly 6 basis points to 4.023%, rising for three consecutive days and returning to last Thursday's level. Yesterday, it recovered from the decline since Friday's poor non-farm payroll employment data. The highest yield on 30-year long-term bonds rose 5 basis points to 4.31%. The US short-term bond yields at two and three years rose by as much as 10 basis points. The yield on the two-year US Treasury bonds rose 7.59 basis points to 4.0380% at the close, trading in the range of 3.9126%-4.0794% during the day.

• European Bonds: The closing yield on the 10-year German bond, the benchmark for the euro zone, fell slightly, and the yield, which had risen significantly after the release of US initial jobless claims, fell for most of the day, while the two-year yield fell more than 1 basis points. The yield on 10-year UK bonds rose by about 3 basis points. France 10-year treasury notes yield rose 0.3 basis points, Italy 10-year treasury notes yield fell 0.6 basis points, Spain 10-year treasury notes yield rose 0.2 basis points, and Greece 10-year treasury notes yield rose 0.3 basis points.

The Japanese yen has fallen for three consecutive days, which helps to suppress the volatility caused by arbitrage trading, and has pushed the US dollar index to its highest level early in US stocks, recovering from the decline since last Friday. Bitcoin has surged more than 10%, breaking through the $60,000 and $61,000 thresholds in succession.

• USD: The basket of currencies measured by the US dollar index DXY rose by 0.02%, to 103.218 points, with a daily trading range of 102.916-103.546 points. After the release of the weekly jobless claims survey report at 20:30 Beijing time, it rose significantly and rose by a maximum of 0.3% during the day. Bloomberg's US dollar index fell by 0.19%, to 1248.18 points, with a daily trading range of 1252.52-1247.29 points.

• Most non-US currencies fell. The euro against the US dollar fell by 0.05%. After the US employment weekly report was released, it showed a V-shaped trend. The British pound against the US dollar rose by 0.41% and maintained its upward trend since the release of the US employment weekly report. The US dollar against the Swiss franc rose by 0.53% and maintained its rise since the release of the US employment weekly report.

• The yen fell 0.6% against the US dollar to 147.53, breaking through the 147 mark, with a daily trading range of 145.44-147.54 yen. The euro against the yen rose 0.33% to 160.75 yen; the British pound against the yen rose 0.78% to 187.637 yen.

• In terms of investment research strategies, Barclays predicts that the yen will regain its safe-haven properties after rebounding. The recent sharp rise in the yen's exchange rate shows that its trend is synchronous with the yield gap. If global growth concerns lead to a decline in stocks, the yen will be boosted by its safe-haven asset status.

• Offshore RMB: Offshore RMB (CNH) fell 109 points against the US dollar to 7.1842 yuan, falling for three consecutive days and falling below 7.18 yuan. The overall trading range during the day was 7.1544-7.1852 yuan.

• Cryptocurrencies rose sharply throughout the day and expanded their gains after US stock market closed. The largest market-cap Bitcoin rose by more than 10% and broke through the $60,000 and $61,000 thresholds, recovering from the decline since last Saturday. The second-largest Ethereum rose by 13% and exceeded $2,600.

Due to the lower-than-expected US initial jobless claims data, the worry about US recession eased, and the tension in the Middle East intensified. The oil price has risen for the third day and closed up by more than 1%, further breaking away from the low point of more than half a year.

• US Oil: WTI crude oil futures for September rose from yesterday's $75.23 per barrel to $76.19 per barrel, an increase of nearly 1.28% or $0.96. Intraday European stocks fell by more than 0.8% to $74.60 per barrel, and then US oil prices continued to rise, with the highest increase of more than 1.7% after mid-day US stocks, surpassing $76.5 per barrel.
  

• Brent oil: October Brent crude oil futures rose from yesterday's $78.33 per barrel to $79.16 per barrel, an increase of nearly 1.06% or $0.83. Brent oil follows a similar trend to US oil, falling by nearly 0.9% during the European stocks and falling below $78 per barrel, and then rising by more than 1.3% after mid-day US stocks, surpassing the $79 per barrel integer mark.

• According to Citigroup's investment strategy, Brent crude oil prices may rise to the mid-$80s, partially due to geopolitical risk in North Africa and the Middle East. Other bullish factors include supply and demand tightness until the end of August, potential hurricane-related disruptions, among others. If oil prices return to $80, it should be sold while the momentum is still high.

• Natural gas: U.S. September natural gas futures closed up 0.71% at $2.1270/million British thermal units. European natural gas prices surged, with the European benchmark TTF Dutch natural gas futures rising 4.28% to €40.200/megawatt hour. ICE UK natural gas futures rose 4.43% to 98.640 pence/kcal.

Safe-haven demand and Fed rate cut bets drove gold up over 1% and stopped the decline of 5 consecutive days:

• Gold: COMEX December gold futures rose 1.43% to $2,467.20/ounce at the close. Spot gold hit a daily low and fell slightly by 0.08% in the Asian session, and then continued to rise. After the midday break, it hit a daily high, rising over 1.8% and breaking through the $2,420 mark.
  

• Silver: COMEX September silver futures closed up 2.45% at $27.605/ounce. Spot silver fell nearly 0.58% at the beginning of the Asian session, and then continued to rise. During the early U.S. session, it hit a daily high, rising over 3.7% and approaching $28.

• Most London metals rose. The "Dr. Copper" economic barometer rose $25 from a five-month low to $8,794/ton. London zinc rose $64, up nearly 2.48%. London tin rose $503, up about 1.68%. But nickel fell $153, down about 0.94%, and aluminum fell $14. Lead fell $2. However, Goldman Sachs said that Asian copper inventories have soared to their highest level since mid-2018, and copper prices will continue to decline.

Editor/Jeffy