The Dow rose three times in a row and reached a new high. The S&P index rebounded; Tesla fell nearly 2%, and after being sniped by bears, the AI “monster stock” fell nearly 9%; Pinduoduo's earnings report fell more than 4% the next day, but the China Securities Index rebounded. After the CEO announced an increase in holdings, Xiaopeng Motor surged 14% on the second day. Demand for the sale of 69 billion dollar treasury bonds was strong, and two-year US Treasury yields declined intraday. The US dollar index fell back to a one-year low, and the pound rebounded to a new high in nearly two and a half years. Crude oil fell more than 2%, and oil fell to a two-week high. Gold rose three times in a row, and futures turned higher after closing down.
The US consumer confidence index rose to 103.38 in August, reaching a six-month high and exceeding expectations of 100.7. According to the analysis, consumers are more optimistic about the economy and inflation, but at the same time more pessimistic about the future labor market. Also, housing price data for June showed that housing price increases in major US cities exceeded expectations. However, the Richmond Fed's composite manufacturing index fell to -19 in July, deteriorating from -17 the previous month.
Expectations of interest rate cuts heated up slightly after the data was released. The US dollar index fell and took back Monday's gains, which is beneficial to the G10 currency. US bond yields are falling, and the yield curve is getting steeper. Due to the return of profits from some investors, the geopolitical situation did not escalate. Coupled with Goldman Sachs and other big banks looking at the prospects of declining oil demand, crude oil futures performance was weak, dragging down the performance of energy stocks, and oil and US oil erased most of Monday's gains. Due to expectations of interest rate cuts and continued concerns about the Middle East conflict, gold turned higher in the intraday period and continued to approach the high intraday record set last week. Futures closed at a new high for the time being.
Investors focused on Wednesday's after-market earnings report on US stocks. Nvidia has become a key weather vane for technology stocks and AI to measure the health of the AI industry. Morgan Stanley said that for Nvidia, mitigating market concerns about Blackwell's delays is more important than raising revenue expectations. Since this year, Nvidia's stock price has accumulated a cumulative increase of about 160%, and since the bear market low in October 2022, the increase has reached an astonishing 1000%. Nvidia's market capitalization weight in the S&P 500 index is close to 7%, and its influence on the overall market should not be underestimated. Prices in the options market suggest that Nvidia's stock price may fluctuate by nearly 10% the day after the earnings report is announced.
The Dow hit a record closing high in two days. Nvidia rose more than 1%, driving the chip stock index to close more than 1%
The three major US stock indices all rose and closed near daily highs: the S&P 500 market closed up 0.16% to 5625.80 points. The Dow, which is closely linked to the economic cycle, closed up 0.02% to 41250.50 points. The NASDAQ, which is dominated by technology stocks, closed up 0.16% to 17754.82 points. The NASDAQ 100 closed up 0.33%. The Nasdaq Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of NASDAQ's 100 technology components, closed up 0.44%. The Russell 2000 Index, which is more sensitive to the economic cycle, closed down 0.67%. The VIX Panic Index closed down 4.46% to 15.43.
ETFs in the US stock industry closed with mixed ups and downs. Semiconductor ETFs rose more than 1%, while global aviation ETFs, global technology stock ETFs, technology ETFs, and financial ETFs each rose at least 0.5%. Meanwhile, regional bank ETFs and energy ETFs fell close to 1%, while utility ETFs and banking ETFs each fell by more than 0.5%.
The 11 sectors of the S&P 500 index had mixed ups and downs. The S&P IT/Tech sector closed up 0.63%, the financial sector rose 0.48%, the telecom services sector closed down 0.44%, the optional consumer sector fell 0.47%, and the energy sector had the worst performance, falling 0.93%.
The “Seven Sisters of Science and Technology” has declined a lot and increased little. Tesla closed down 1.88%, Amazon closed down 1.36%, Google A closed down 0.89%, Meta closed down 0.39%, while Nvidia closed up 1.46%, Microsoft closed up 0.08%, and Apple closed up 0.37%.
Chip stocks are rising and falling less. The Philadelphia Semiconductor Index closed up 1.1%; the industry ETF SOXX closed up 1.11%; Nvidia Doubled Longer ETF closed up 2.89%. Ansemi Semiconductor closed up 1.66%, Qualcomm closed up 2.62%, Ke Lei closed up 1.73%, Arm Holdings closed up 1.78%, AMD closed up 0.34%, and Broadcom closed up 1.11%. TSMC's ADR closed up 0.88%, Asmack's ADR closed up 0.74%, while Intel closed down 0.3%, Micron Technology closed down 1.06%, and Applied Materials closed down 0.23%.
AI concept stocks had mixed ups and downs. Snowflake closed down 2.08%, SoundHound AI, an AI voice company owned by Nvidia, closed down 1%, C3.ai closed down 3.37%, Oracle closed down 0.3%, Serve Robotics closed down 1.15%, Palantir closed 0.03%, and BullFrog AI remained flat, while BigBear.AI closed 2.42%, Dell Technology closed 0.17%, and CrowdStrike closed up 1.49%.
It is worth noting that the “AI monster stock” ultra-microcomputer US stock fell nearly 8.7% at the beginning of the market and eventually closed down 2.64%. Previously, Hindenburg released a shorting report. Hindenburg stated in the report that it carried out a three-month investigation, which included interviewing former senior employees and industry experts, reviewing litigation records, international company and customs records, and uncovered obvious accounting issues, undisclosed evidence of related transactions, sanctions and export control errors, and customer issues.
China Securities had mixed ups and downs. The Nasdaq Golden Dragon China Index surged high at the beginning of the session and finally closed up 0.39%. Among ETFs, the China Technology Index ETF (CQQQ) closed down 1.02%. China Internet Index ETF (KWEB) closed down 0.08%.
Among popular Chinese securities, (1) Ctrip ADR closed up 8.57% after rising more than 10.2% at the beginning of the session. Earlier financial reports showed better than expected results for the second quarter. (2) Pinduoduo closed down 4.09%. Many institutions, including Macquarie, Citibank, and Morgan Stanley, lowered their ratings, but Goldman Sachs was firmly optimistic. The reason was that Pinduoduo's price-earnings ratio had previously reflected investors' concerns about increased domestic competition and Temu's geopolitics, and Temu's growth momentum continued. (3) Xiaopeng Motors closed up 6.52%, and the Xiaopeng Turing chip was successfully streamed on August 23. At the beginning of the market, JD rose more than 4.1%, and finally closed up 2.25%. The company announced a 5 billion dollar share repurchase plan. (4) Anta Sports' ADR closed up 7.06%. In the first half of the year, revenue increased 13.8% year-on-year, and net profit increased 62.6%. It is planned to use no more than HK$10 billion to repurchase shares. (5) Gaotu US stocks closed down 18.87%. The company's Q2 revenue was 1.0098 billion yuan, up 43.6% year on year. Net loss was 0.4296 billion yuan, and net profit was 56.16 million yuan for the same period last year.
Among the other individual stocks that announced financial reports, (1) BHP Billiton closed up 0.29%, and profits for the whole year were basically in line with expectations. Despite deteriorating global demand prospects, the company's iron ore and copper revenue continued to grow. (2) Video semiconductor process business developer Ambarella (Ambarella)'s second-quarter revenue and third-quarter revenue guidelines both exceeded expectations, and the stock price rose more than 19% after the market. (3) Nordstrom's second-quarter sales were slightly better than expected. There was an improvement in the lower end of the full-year performance guidance range. The stock price once rose by more than 12% after the market.
Among the most volatile individual stocks, (1) Lilly hit a record closing high after a lapse of two trading days. In order to solve the shortage of diet pills, Lilly sold small bottles of the blockbuster diet drug Zepbound at a low price of $399 per month. Patients can buy it directly from Eli Lilly's website from Tuesday, with a higher dosage of $549 per month. (2) Coca Cola closed up 0.93% to 71.50 US dollars, reaching a record closing record high for the third consecutive trading day, with a cumulative increase of more than 23% since 2024.
The European stock market closed slightly higher, with travel stocks leading the way, luxury concept stocks generally falling
The pan-European Stoxx 600 index closed up 0.16%. Among them, aviation stocks had the highest gains, leading the way for travel stocks to rise 0.9%. Among the constituent stocks, easyJet increased 6.9%, TUI Group rose 5.03%, and Ryanair increased 4.6%. The CEO of Ryanair said that the weak situation from April to June seemed to have stabilized, and consumers showed a willingness to pay higher fares. Luxury concept stocks generally fell, with Burberry closing down 3.11%, Hermès down 2.69%, and LVMH Group down about 1.8%.
European multinational stock indexes generally rose. The German stock index closed up 0.35%, the French stock index closed down 0.32%, the UK stock index rose 0.21%, the Italian stock index closed up 0.52%, the Dutch stock index closed up 0.05%, and the Spanish stock index closed up 0.55%.
The price of US bonds had mixed ups and downs. The two-year US bond yield fell by more than 3.2 basis points. The “long weekend” returned, the 10-year British bond yield rose more than 8 basis points, and the 2/10 year British bond yield curve was inverted again
US debt: The results of the 69 billion dollar two-year treasury bond bid announced by the US Treasury Department on Tuesday showed strong demand. The two-year US Treasury yield, which is more sensitive to monetary policy, accelerated its decline after the bid was completed. At the end of the day, it was close to the one-week low set last Wednesday. By the end of the day, US stocks fell 3.24 basis points to 3.9034%. Intraday trading was in the range of 3.9605% to 3.8970% throughout the day. At the end of the US stock market, the yield on the US 10-year benchmark treasury bond rose 1.51 basis points to 3.8311%. Intraday trading was in the 3.8046%-3.8653% range, showing a volatile upward trend between the day and 21:00 Beijing time.
According to the news, the J.P. Morgan Chase US Treasury customer survey showed that in the week ending August 26, the net long share of US debt customers hit a two-month low. In terms of active customers, the share of bears hit the highest level since July 22.
European bonds: The yield on 10-year German bonds, the benchmark for the Eurozone, rose 4.1 basis points to 2.288%, and has been fluctuating upward for most of the day. The two-year German bond yield rose 0.6 basis points. French 10-year Treasury yields rose 5.9 basis points, Italian 10-year Treasury yields increased 7.2 basis points, Spanish 10-year Treasury yields increased 5.9 basis points, and Greek 10-year Treasury yields rose 4.9 basis points. The yield on two-year British bonds rose 4.27 basis points, and the yield on British 10-year treasury bonds rose 8.6 basis points. After the market was closed on Monday, it jumped high and fluctuated at a high level throughout the day. The 2/10-year British bond yield curve was reversed, and the 2/10-year British bond yield spread fell by 34.373 basis points to -11.317 basis points, breaking the state that has continued to be positive since July 24.
According to the news, Germany's economy contracted in the second quarter due to the decline in investment and consumption, dispelling hopes of getting rid of the economic stagnation of the past few years. Although Germany had a strong start to the year, it was difficult to maintain its growth momentum. Recent indicators suggest a deterioration in business confidence, particularly in key manufacturing sectors. ING economist Carsten Brzeski said that Germany's growth in the second quarter was disappointing, and almost all confidence indicators have declined. The German economy is now back to a year ago: it has stagnated, and economic growth is at the bottom of the Eurozone.
The US dollar index fell to the psychological threshold of 100, most G10 currencies rose, and the yen rose above 144 at one point
US dollar: The US dollar index DXY, which measures a basket of six major currencies, fell 0.28% to 100.566 points. The intraday trading range was 100.930-100.514 points, approaching the 100-point psychological threshold and 99.578 points at the bottom of July 14, 2023.
The Bloomberg US dollar index fell 0.09% to 1225.48 points, approaching the bottom of August 26 at 1221.94 points.
Non-US currencies generally rose. The euro rose 0.20% against the US dollar, the pound rose 0.51% against the US dollar, and the dollar fell 0.66% against the Swiss franc; in commodity currency pairs, the Australian dollar rose 0.31% against the US dollar, the New Zealand dollar rose 0.66% against the US dollar, and the US dollar fell 0.32% against the Canadian dollar.
Yen: The yen rose 0.39% against the US dollar to 143.99 yen. The intraday trading range was 145.18-143.92 yen. The yen rose 0.16% against the euro to 161.05 yen, while the yen fell 0.14% against the British pound to 190.916 yen.
Offshore RMB: Offshore RMB (CNH) rose 14 points against the US dollar at the end of the session to 7.1215 yuan. Overall intraday trading was in the range of 7.1341-7.1191 yuan.
The majority of cryptocurrencies have declined. Bitcoin, the largest market capitalization leader, fell 2.59% at the end of the session to $6,1880.00. Ethereum, the second-largest, fell 4.01% at the end of the session to $2583.00.
After oil prices rose more than 7% for three days, Goldman Sachs and Morgan Stanley looked at the prospects for declining oil demand, and geopolitical risks were mitigated. The lowest drop in the US oil market was over 2.6%, and the deepest drop in oil was over 2.4%:
US Oil: WTI crude oil futures for October closed down $1.89, or more than 2.44%, to $75.53 per barrel. US oil maintained an overall decline throughout the day. Although European stocks rose slightly by nearly 0.08% before the market, they continued to decline. US stocks fell more than 2.6% to 75.40 US dollars/barrel on a new day after noon trading.
Oil: Brent crude oil futures for October closed down 1.88 US dollars, or about 2.31%, to 79.55 US dollars/barrel. The trend of oil distribution converged with US oil. The deepest decline in US stocks was more than 2.4% to 79.47 US dollars/barrel after noon trading.
According to the news, after three days of rising oil prices, Goldman Sachs and Morgan Stanley released pessimistic reports stating that the oil market will face oversupply, and oil prices may fall in the next 12 months. Goldman Sachs lowered its 2025 average price forecast for Brent crude oil from $82 to $77 per barrel, while Morgan Stanley's forecast fluctuates between $75-78. Castle analyst Currie (former Goldman Sachs bulk trader) also said that after “arbitrage trading,” there is an upward risk of crude oil prices.
On the geopolitical side, according to Global Network reports, US White House National Security Council spokesman John Kirby said on the 26th local time that the cease-fire negotiations in Cairo have progressed. In response, senior Hamas officials refuted the US side and accused the US government of “peddling fantasy.” According to CCTV news, a senior US military official said that “the short-term risk of a wider war breaking out in the Middle East has been mitigated, but Iran still poses a major threat. Iran's Deputy Defense Minister said Iran's response to Israel was unpredictable.
Natural gas: US natural gas futures for September closed down nearly 2.66% to $1.9040 per million British thermal units. The European benchmark TTF Dutch gas futures rose 2.52% to 38.650 euros/megawatt hour. ICE British gas futures rose 3.08% to 110.500 penns/kcal, and Norway stepped up production reduction measures related to seasonal maintenance.
Spot gold rose 0.27% to a record high of $2,500 due to expectations of interest rate cuts and continued concerns about the Middle East conflict
Gold: COMEX's December gold futures closed down 0.09% to 2552.9 US dollars/ounce, breaking the high closing record set on Monday. After closing, they turned higher and rose 0.19% at the end of the session to $2560.10 per ounce. Spot gold rose 0.27% at the end of the session to 2524.77 US dollars/ounce. Overall intraday trading was in the range of 2503.63-2525.95 US dollars.
Silver: COMEX silver futures closed down 0.09% to $29.98 per ounce in September, while US stocks fell 0.07% to $29.985 per ounce at the end of the session. Spot silver rose 0.24% to $29.9757 per ounce.
Saxo Bank analysts pointed out that the price of gold now reflects that the US will begin the interest rate cut cycle in September, so it may be difficult for gold prices to reach higher levels in the short term, unless weak US economic data supports interest rate cuts of 50 basis points instead of the expected 25 basis points. Gold prices will consolidate in the next few months, but the risk of a further pullback to $2,400 is limited. Han Tan, chief market analyst at Exinity Group, said that if the Federal Reserve can cut interest rates by 100 basis points before Christmas according to the market's current expectations, then the price of gold may even break through 2,700 dollars by the end of the year.
Most of London's industrial base metals rose. The economic weather vane “Dr. Copper” closed up more than 1.72% from last Friday (closed on Monday) to $9448 per ton. Lunn lead closed higher at $7. Renxi closed up about 1.01%. Lunan aluminum closed up $8. Lunzinc rose more than 1.06%, while Lunn nickel rose more than 2.25%.
edit/lambor