1. Before the US stock market on August 13 (Tuesday), futures for the three major US stock indexes had mixed ups and downs. As of press release, Dow futures were down 0.07%, S&P 500 futures were up 0.19%, and NASDAQ futures were up 0.29%.

2. As of press release, the German DAX index rose 0.01%, the UK FTSE 100 index fell 0.12%, the French CAC40 index fell 0.29%, and the European Stoxx 50 index fell 0.12%.

3. As of press release, WTI crude oil fell 0.17% to $79.92 per barrel. Brent crude oil fell 0.22% to $82.12 per barrel.

Market news

The darkest hour is over! Goldman Sachs experts who accurately predicted this round of pullbacks: The end of August ushered in a good opportunity for US stocks to bottom out. Scott Rubner, managing director of Goldman Sachs Group's global marketing department and strategy expert, said on Monday that as the selling pressure on systemic funds eases and the company increases its stock repurchase efforts, investors will enter a short window period to absorb US stocks on dips at the end of August. He said, “This will be the last time I will be bearish on the August stock market, as the most serious period of mismatch between supply and demand in the stock market in August is coming to an end.” He will switch to a tactical bullish stock market on August 30. Rubner proposed cutting its exposure to the US stock market after July 4 in late June, and believes that the stock market is in the “final stage of financial growth” until July 17. As it turns out, the S&P 500 index hit a new closing high on July 16 and has now fallen about 6% from that level.

RBC: The S&P 500 may have bottomed out, but growth fears could trigger a sharp pullback. RBC Capital Markets said that the S&P 500 index may have bottomed out after the recent market sell-off caused by concerns about the recession, but if there is a major economic growth panic, the index may experience a double-digit decline. RBC Capital Markets believes that when the S&P 500 index fell 8.5% from its previous high on August 5, the bank “optimistically” believed that the short-term bottom was in place or close to being in place. Lori Calvasina, head of US stock strategy at the bank, said that the decline was within a normal (or healthy) 5% to 10% correction range and maintained an important technical support level. However, Lori Calvasina added: “We still need to be wary that the turbulent situation will continue for some time. If economic data continues to disappoint, we cannot rule out the possibility of economic growth panic.”

Bank of America: If the US CPI falls short of expectations in July, it may once again raise concerns about stagnant growth. Bank of America Global Research said that the US July Consumer Price Index (CPI) to be released this week will be another major challenge facing the stock market. The market has just emerged from a sharp decline caused by concerns about the economic recession, and disappointing CPI data may cause the stock market to fall further. Since the US non-farm payrolls report in July raised concerns about the recession, the S&P 500 index has continued to decline. The US Department of Labor will release the US CPI data for July on Wednesday. Bank of America expects CPI to rise 3.0% year on year and 0.25% month on month in July; core CPI excluding food and energy prices will rise 3.3% year on year and 0.22% month on month. Bank of America analyst Ohsung Kwon said, “Overheated CPI data will be a major downside event and may cause the market to fall back into stagflation concerns.”

The US fiscal year is nearing its end, and the budget deficit has exceeded 1.5 trillion dollars. With two months until the end of this fiscal year, the US budget deficit is over 1.5 trillion dollars. Although it is a slight decrease from FY2023, it is well above pre-pandemic levels. According to data released by the US Treasury Department, in the 10 months ending July, the US budget deficit was 1.52 trillion US dollars, down 6% from the same period last year; the budget deficit for July was 244 billion US dollars, down 16% from July 2023 after adjusting for calendar differences. The increase in revenue helped reduce the budget deficit. Among them, the increase in tax revenue is due in part to the fact that in states affected by natural disasters, the tax deadline has been postponed from fiscal 2023 to this year, and the affected regions include most of California.

Individual stock news

Home Depot (HD.US)'s Q2 sales of $43.18 billion fell short of expectations, with earnings of $4.60 per share. Home Depot's second-quarter sales were $43.18 billion, estimated at $43.79 billion; second-quarter earnings per share were $4.60, compared to $4.65 for the same period last year.

Sea (SE.US) net profit for Q2 was $79.911 million, down 75.9% year over year. Sea, known as the “Little Tencent of Southeast Asia”, announced its latest results today. The company's Q2 revenue for 2024 was 3.807 billion US dollars, up 23% year on year; net profit was 79.911 million US dollars, down 75.9% year on year.

Tencent Music (TME.US) equity holders should have accounted for 1.682 billion yuan in profit in the second quarter, an increase of 29.58% over the previous year. Tencent Music's second-quarter revenue was 7.16 billion yuan (RMB, same below), a year-on-year decrease of 1.73%; profit attributable to the company's equity holders was 1.682 billion yuan, an increase of 29.58% over the previous year; and the basic profit per share of Class A and Class B common stock was 0.54 yuan. Revenue from online music services increased by 27.7% compared to 4.25 billion yuan in the same period in 2023, reaching 5.42 billion yuan (0.746 billion US dollars), mainly due to strong growth in online music subscription revenue and growth in advertising service revenue. In addition, the Group earned revenue of 13.928 billion yuan in the six months ended June 30, 2024, a year-on-year decrease of 2.53%; profit attributable to shareholders was 3.104 billion yuan, an increase of 26.9% over the previous year; and the basic profit per share of Class A and Class B common shares was 1.01 yuan.

HUYA.US (HUYA.US) Q2 net profit reached 97 million yuan, and mobile MAU increased to 83.5 million yuan. In the second quarter of 2024, Huya's total revenue reached 1.54 billion yuan. Among them, revenue from game-related services, advertising, and other businesses increased 152.7% year over year to 0.31 billion yuan. Net profit attributable to Huya for the quarter was 97 million yuan under non-GAAP. In terms of user data, in the second quarter of 2024, the mobile MAU of Huya Live increased to 83.5 million.

China Automobile Systems (CAAS.US)'s Q2 revenue exceeded expectations of $0.1586 billion, with earnings per share of $0.24. China Automobile System's 2024 Q2 financial report achieved revenue of 0.1586 billion US dollars, the previous value was 0.1374 billion US dollars, and the expected value was 0.1374 billion US dollars; earnings per share were 0.24 US dollars, and the previous value was 0.35 US dollars.

XNET.US (XNET.US) reported revenue of $79.6 million and net profit of $2.5 million for the second quarter of 2024. Xunlei's total revenue for the second quarter was 79.6 million US dollars, net profit of 2.5 million US dollars, and gross profit of 40.7 million US dollars. The gross margin rose to 51.1% compared to 44.0% in the same period last year. Specifically, the company's total revenue fell 23.7% year-on-year in the current quarter. This is mainly due to Xunlei taking the initiative to reduce the domestic voice live streaming business since June 2023, which has led to a decrease in live streaming business revenue.

YALA.US (YALA.US)'s Q2 revenue exceeded expectations, and net profit increased 11% year over year. Yale Technology's Q2 revenue increased 2.5% year over year to 81.2 million US dollars, and the market forecast is 79 million US dollars. Non-GAAP diluted earnings per share were $0.19, flat year over year. Net profit was $31.4 million, up 10.9% year over year. By business, the revenue from the chat service business was 54.9 million US dollars, and the revenue from the game service business was 26.2 million US dollars. Non-GAAP net profit was $35.2 million, up 4.4% year over year. The average monthly active users (MAU) was 39 million, up 14.1% year over year. The number of paying subscribers was 12 million, down 10.3% year over year. For the third quarter of 2024, Yale Technology currently expects revenue between $75 million and $82 million.

CXapp (CXAI.US) welcomes “splendid wealth”! A multi-million dollar agreement was reached with Google Cloud, and the stock price soared more than 60% before the market. On Monday EST, CxApp, a well-known US mobile office experience platform, signed a multi-year cooperation agreement worth millions of dollars with global cloud service giant Google Cloud (Google Cloud). In comparison, CXApp's current quarterly sales are hovering around 1.7 million US dollars. In pre-market trading of US stocks on Tuesday, stimulated by the above news, CxApp's stock price once rose sharply by more than 90%. As of press time, it had soared by more than 60% to reach 2.460 US dollars per share.

Google (GOOGL.US) spearheaded Apple's AI phone release, and the launch of the new Pixel was brought forward to Tuesday. Alphabet's Google will hold a new product launch at 13:00 p.m. EST on Tuesday. At the upcoming hardware launch, Google is trying to surpass Apple's (AAPL.US) annual iPhone launch and focus on long-time executive Rick Osterloh (Rick Osterloh). Ostello is the former president of Motorola and joined Google in 2016. This year, Google will unify the hardware development team and Android operating system development team under his leadership, and Ostello will be responsible for Google's first major product launch. This restructuring expands Ostello's influence in the company and shows that Google intends to compete in the hardware field for a long time. Google has moved the release of its flagship smartphone of the year, the Pixel, from October to August, ahead of the launch of Apple's next iPhone.

The “5 yuan package” battle! KFC, a subsidiary of YUM.US (YUM.US), is playing against McDonald's and is also offering a low price package. To attract price-sensitive consumers and compete with McDonald's (MCD.US)'s $5 package, Yum's KFC is expanding its $5 value menu and more offers on its digital platforms. According to reports, KFC's May bargain menu now offers an 8-piece chicken nugget with french fries, or a super mashed potato bowl, or a set of 2 chicken thighs. It is worth mentioning that in addition to KFC, competitors such as WEN.US (WEN.US) and Burger King, a subsidiary of Restaurant Brand International (QSR.US), have responded to the success of McDonald's $5 package and launched corresponding packages.

Key economic data and event forecasts

20:30 Beijing time: US July PPI annual rate (%).

20:55 Beijing time: The annual rate of commercial retail sales of the Red Book in the US for the week ending August 5 (%).

The next day at 04:30 a.m. Beijing time: US API crude oil inventory changes for the week ending August 9 (10,000 barrels).

The next day at 01:15 a.m. Beijing time: 2024 FOMC voting committee and Atlanta Federal Reserve Chairman Bostic delivered a speech on the economy.

Performance Forecast

Wednesday pre-market: UBS (UBS.US), UCL.US (UCL.US)