Better-than-expected retail sales data eased concerns of a hard landing for the US economy. The stock markets in Europe and America rose across the board. In terms of macro data, the monthly rate of retail sales in July in the United States recorded an increase of 1%, which was much higher than expected and the biggest increase since January 2023, greatly easing the market's concerns about the US economic recession. This also reduced investors' expectations for a sharp cut in interest rates by the Federal Reserve this year. Influenced by this, the gold futures price once experienced a dive, but then slowly recovered and closed slightly higher. Large technology stocks rose across the board, with Cisco, Micron Technology, and Tesla up more than 6%, ASML Holding and Broadcom up more than 5%, AMD, Amazon, and Nvidia up more than 4%, Intel, Qualcomm, and Texas Instruments up more than 3%, Taiwan Semiconductor, Nokia, Dow Chemical, and Meta up more than 2%, Apple and Microsoft up more than 1%, and Google A and Netflix slightly up.
On Thursday, August 15th, the three major US stock indexes collectively rallied, with the Nasdaq and S&P 500 both achieving six consecutive gains. As of the close, the Dow Jones Industrial Average rose 1.39%, the Nasdaq rose 2.34%, and the S&P 500 Index rose 1.61%. The European markets also rose across the board, with the CAC40 in France, the DAX in Germany, and the Euro Stoxx 50 Index all up more than 1% at the close. $Nasdaq Composite Index (.IXIC.US)$ As for macro data, the US Department of Commerce showed that the monthly rate of retail sales in the United States in July recorded an increase of 1%, the largest increase since January 2023. It was estimated to rise by 0.4% and the previous value was 0%. Compared with June, this was a strong rebound, and the sales data for June was revised to a decrease of 0.2%. Economists surveyed by The Wall Street Journal had expected sales to increase by 0.3%.$S&P 500 Index (.SPX.US)$In addition, the data released by the US Department of Labor on Thursday showed that the number of initial claims for unemployment benefits in the week ending August 10th decreased by 7,000 to 0.227 million, while economists surveyed by Bloomberg had expected a median of 0.235 million applications. Although recent recruitment activities have fallen, the number of initial claims for unemployment benefits in the United States has fallen for the second consecutive week, reaching the lowest level since early July.
Analysts said that the data released on Thursday showed that the situation of a soft landing in the US was intact, which was a positive catalyst for the stock market and may further rise. The labor market is slowly cooling down, contrary to expectations of a more severe slowdown. At the same time, consumer spending continues to drive the "American exceptionalism". Overall, the current situation means that the Federal Reserve may start to ease policies in September, but there is no need to rush to cut interest rates by 50 basis points. Although the prospect of a reduced interest rate is putting pressure on the stock market, the idea that there is no immediate threat of an economic recession is what is ultimately good for the stock market.
Large technology stocks rose across the board, with Cisco, Micron Technology, and Tesla up more than 6%, ASML Holding and Broadcom up more than 5%, AMD, Amazon, and Nvidia up more than 4%, Intel, Qualcomm, and Texas Instruments up more than 3%, Taiwan Semiconductor, Nokia, Dow Chemical, and Meta up more than 2%, Apple and Microsoft up more than 1%, and Google A and Netflix slightly up.
US retail sales increased by 1% in July, alleviating concerns about economic recession.
On Thursday, August 15th, the three major US stock indexes rose significantly, with the Nasdaq and S&P 500 both achieving six consecutive gains. As of the close, the Dow Jones Industrial Average rose 554.67 points, or 1.39%, to 40,563.06 points; the Nasdaq rose by 401.90 points, or 2.34%, to 17,594.50 points; the S&P 500 Index rose by 88.01 points, or 1.61%, to 5,543.22 points.
In terms of macro data, the monthly rate of retail sales in the United States in July recorded an increase of 1%, the largest increase since January 2023, greatly easing concerns about the US economic recession. This also reduced investors' expectations for a sharp cut in interest rates by the Federal Reserve this year. Influenced by this, the gold futures price once experienced a dive, but then slowly recovered and closed slightly higher. The data released by the US Department of Commerce showed that the monthly rate of retail sales in the United States in July recorded an increase of 1%, which was estimated to rise by 0.4%, and the previous value was 0%. Compared with June, this was a strong rebound, and the sales data for June was revised to a decrease of 0.2%. Economists surveyed by The Wall Street Journal had expected sales to increase by 0.3%.
US retail spending in July increased, indicating that the cooling of inflation and increased income continue to drive household consumption.
In addition, the data released by the US Department of Labor on Thursday showed that the number of initial claims for unemployment benefits in the week ending August 10th decreased by 7,000 to 0.227 million, while economists surveyed by Bloomberg had expected a median of 0.235 million applications.
Although recruitment activities have fallen recently, the number of initial claims for unemployment benefits in the United States has fallen for the second consecutive week, reaching the lowest level since early July.
In the week ending August 3rd, the number of continuing claims also fell to 1.86 million.
Analysts said that the data released on Thursday showed that the situation of a soft landing in the US was intact, which was a positive catalyst for the stock market and may further rise. The labor market is slowly cooling down, contrary to expectations of a more severe slowdown. At the same time, consumer spending continues to drive the "American exceptionalism". Overall, the current situation means that the Federal Reserve may start to ease policies in September, but there is no need to rush to cut interest rates by 50 basis points. Although the prospect of a reduced interest rate is putting pressure on the stock market, the idea that there is no immediate threat of an economic recession is what is ultimately good for the stock market.
Peter Cardillo, Chief Market Economist at Spartan Capital Securities, said that the key data today is retail sales, which indicates that the pulse of American consumers is clearly much stronger than expected. This reduces concerns about an economic recession, which is good news for the stock market, but may not be good news for the bond market. With this report, we are back to the beginning, and the Federal Reserve may cut interest rates by 25 basis points in September, while the possibility of a larger cut (50 basis points) is decreasing.
Raphael Bostic, President of the Atlanta branch of the United States Federal Reserve, stated in an interview with the Financial Times of the United Kingdom that he is open to a rate cut in September. Bostic believes that the Fed should not be 'late' in easing monetary policy as signs of cooling in the labor market emerge. As inflationary pressures ease, policymakers also need to recognize the Fed's responsibility to maintain full employment. Bostic has voting rights in the Federal Open Market Committee this year.
Large technology stocks led the gains, with Tesla up more than 6%.
Large technology stocks rose across the board, with Cisco, Micron Technology, and Tesla up more than 6%, ASML Holding and Broadcom up more than 5%, AMD, Amazon, and Nvidia up more than 4%, Intel, Qualcomm, and Texas Instruments up more than 3%, Taiwan Semiconductor, Nokia, Dow Chemical, and Meta up more than 2%, Apple and Microsoft up more than 1%, and Google A and Netflix slightly up.
$Cisco (CSCO.US)$ Up 6.8%. Cisco Systems exceeded expectations for earnings and revenue in the fourth quarter of fiscal year 2024, and announced news of global layoffs. On August 14th local time, Cisco said that as it shifts its focus to high-growth areas, the company will cut about 7% of its global workforce. Cisco Systems expects the plan to result in up to $1 billion in pretax expenses, with $700 million to $800 million being confirmed in the first quarter. This large-scale layoff is based on another round of layoffs earlier this year at Cisco.
$Tesla (TSLA.US)$ Up 6.34%. Tesla has recently upgraded its electric pickup Cybertruck on its official website, keeping only the founder series of the all-wheel drive version and Cyberbeast Wild Series models, and suspending orders for the rear-wheel drive version. Wes Morrill, Tesla Cybertruck's engineering chief, said on social media that the suspension of new orders was to adapt to current production conditions and hinted that there would be further adjustments to Cybertruck's ordering in the future.
$NVIDIA (NVDA.US)$ Up 4.05%. Nvidia has risen for four consecutive trading days, with five days in the past six trading days. During this period, Nvidia has accumulated a cumulative increase of up to 24.21%.
$Intel (INTC.US)$ Up 3.87%. The UK's Financial Times cited unnamed sources as saying that SoftBank had discussed producing AI chips that compete with Nvidia, but Intel was unable to meet SoftBank's requirements for output and speed, and the related plan failed to come to fruition, with negotiations breaking down in the "recent months." SoftBank has also had discussions with TSMC but has yet to reach an agreement. SoftBank has also communicated with tech groups such as Google and Meta, hoping to get support and financing to achieve its AI ambitions. Meta had no comment on this and Google did not respond to requests for comment.
Other individual stocks, $Walmart (WMT.US)$Up 6.28%. On August 15th local time, Walmart released its financial report for the second quarter of fiscal year 2025. In the second quarter, Walmart's total revenue reached $169.335 billion, up 4.8% year-over-year; net income attributable to shareholders was $4.501 billion, down 43% year-over-year. In the first half of fiscal year 2025, total revenue was $330.841 billion, up 5.4% year over year, while net income attributable to shareholders was $9.605 billion, up 0.4% year over year.
Among them, the Chinese market still performed strongly. Walmart China's net sales in the second quarter were $4.6 billion, a year-on-year increase of 17.7%, with continuous expansion for two consecutive years. Sam's Club and e-commerce business continued to maintain a strong momentum, and Sam's Club membership stores had a positive growth in traffic. Specifically, the second-quarter e-commerce penetration rate reached 49%, up 200 basis points year-on-year. E-commerce sales increased by 23% year-on-year, maintaining the same growth rate as last year. Changes in the product portfolio helped drive up gross margins.
Buffett builds stake, Ulta Beauty soars
Cosmetics stocks $Ulta Beauty (ULTA.US)$ Soared 11.15%, rising over 13% intraday.
On the news front, "stock god" Buffett's Berkshire Hathaway's latest quarterly 13F report shows that it has built a 0.6901 million share stake in Ulta Beauty, worth about $266 million. Prior to this, the stock had been falling steadily since mid-March this year, with a maximum drop of nearly 45%.
Analysis believes that Buffett's investment strategy usually tends to favor companies with competitive advantages, good management teams, and reasonable valuations, all of which apply to Ulta Beauty.
In addition, aerospace company $Heico (HEI.US)$Also soared briefly by more than 8%, narrowing its gains to about 1% at the close. In the second quarter, Buffett also built a stake in Heico Aviation, buying about 1.0442 million shares of the company's stock.
China concept stocks rose across the board. The Nasdaq Golden Dragon Index for China rose 1.72%. Hesaigrowth 14.88%, JD.com and Tuniu up over 4%, Fangdd Network, Dingdong Maicai, and Vipshop up over 3%, Nio up nearly 3%, Netease, Baidu, Wuxin Technology, Yatsen, Xpeng Motors, 21vianet, Pinduoduo, Bilibili, Li Auto, and Monster Charging up over 2%, Niu Technologies, Ctrip, New Oriental, and ZTO Express up over 1%, Weibo, TAL Education, and Alibaba up slightly.
China concept stocks rose across the board. The Nasdaq Golden Dragon Index for China rose 1.72%. Hesaigrowth 14.88%, JD.com and Tuniu up over 4%, Fangdd Network, Dingdong Maicai, and Vipshop up over 3%, Nio up nearly 3%, Netease, Baidu, Wuxin Technology, Yatsen, Xpeng Motors, 21vianet, Pinduoduo, Bilibili, Li Auto, and Monster Charging up over 2%, Niu Technologies, Ctrip, New Oriental, and ZTO Express up over 1%, Weibo, TAL Education, and Alibaba up slightly.
$Alibaba (BABA.US)$ Up 0.09%, rising over 3% intraday. On August 15th local time, Alibaba released its financial report for the first quarter of fiscal year 2025. The data shows that in a quarter ending on June 30, 2024, Alibaba's revenue reached ¥243.236 billion, up 4% year-over-year; the adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was ¥51.161 billion, down 2% year-over-year; net profit was ¥24.022 billion, down 27% year-over-year; and net profit attributable to common shareholders was ¥24.269 billion, down 29% year-over-year.
By business segment, Alibaba's core businesses, e-commerce and cloud, continue to make positive progress. Tmall Group's online GMV (Gross Merchandise Value) continues to grow steadily; Alibaba Cloud focuses on "public cloud + AI," and public cloud revenue achieved double-digit growth, while AI-related product revenue achieved triple-digit growth. Alibaba's international e-commerce business maintained strong growth, with revenue increasing 32% year-over-year to ¥29.293 billion, while international retail business grew 38%.
$JD.com (JD.US)$ Up 4.25%. On August 15th, JD Group released its Q2 and mid-term performance for 2024. The financial report showed that in Q2, JD Group's revenue reached 291.4 billion yuan, a YoY increase of 1.2%. The revenue for the first half of the year reached 551.4 billion yuan, a YoY increase of 3.9%, continuing its growth trend. In Q2, under the Non-GAAP, JD Group's net income reached 14.5 billion yuan, a YoY increase of 69%. The net profit margin reached 5% for the first time, exceeding market expectations.
$PDD Holdings (PDD.US)$ Up 2.18%. On the news front, global alternative asset management giant, the Carlyle Group (CG.US), disclosed that as of the end of the second quarter, PDD Holdings is its fourth largest heavy position, holding about 0.36 million shares with a market value of approximately 48.13 million US dollars, accounting for 3.61% of its investment portfolio, a violent increase of 195.24% from the previous quarter. In addition, billion-dollar private equity firm, Jinglin Asset Management, also massively increased its position in PDD Holdings in Q2, buying over 1.57 million shares of PDD Holdings, with a market value of approximately 0.209 billion US dollars, accounting for 18.24% of Jinglin's investment portfolio, an increase of 5.15 percentage points from the previous quarter. By the end of the quarter, Jinglin held 5.207 million shares of PDD Holdings, making PDD Holdings its top heavy position.$The Carlyle Group (CG.US)$As of the end of the second quarter, pdd holdings was its fourth largest holding, holding approximately 0.36 million shares with a market value of approximately $48.13 million, accounting for 3.61% of the investment portfolio, a sharp increase of 195.24% from the previous quarter. In addition, in the second quarter, the hundred-billion private equity fund Jingshulin Asset also took a heavy position in PDD, buying more than 1.57 million shares of PDD with a market value of approximately $0.209 billion. The proportion in Jingshulin's investment portfolio increased by 5.15 percentage points to 18.24% at the end of the quarter, holding 5.207 million shares of PDD, making PDD its top heavy holding.
Editor/Emily