North American News
Major indices close higher once again
- Dow up for 8 consecutive days. S&P and NASDAQ up 7 the last 8 trading days
The major indices closed higher once again. The Dow is now up for 8 consecutive days. The S&P and NASDAQ are up 7 of the last 8 trading days. Each of the indices is closing at new 52-week highs.
Perhaps some chink in the armor is that the NASDAQ indexes only up marginally and 4 of the magnificent 7 are closing lower on the day.
- Nvidia shares are down by -0.90%
- Alphabet shares are down -1.41%
- Microsoft shares are down -1.24%
- Tesla’s shares are down -0.75%
On the topside,
- Netflix shares are up 0.44%
- Apple shares are up 0.71%
- Amazon shares are up 1.89%
The final numbers are showing:
- Dow industrial average rose 108.81 points or 0.31% at 35060.75
- S&P index rose 10.73 points or 0.24% at 4565.70
- NASDAQ index rose 4.37 points or 0.03% at 14358.01
Tesla EPS $0.91 versus estimate of $0.82. Revenues of $24.93B versus estimates of $24.48B
- Tesla beats on the top and bottom line
- EPS $0.91 versus $0.82 expected
- Revenues $24.93 billion versus expected $24.48 billion
The company is prioritizing cost reduction and the development of new products. They forecast to maintain a long-term 50% Compound Annual Growth Rate (CAGR) with around 1.8 million units for FY23. Additionally, the company confirms that the production of the Cybertruck is on schedule to commence later this year at their Gigafactory in Texas.
Netflix EPS of $3.29 on revenues of $8.19 billion
- EPS $2.86 estimate versus $8.3 billion estimate
Netflix earnings for 2Q show:
- earnings-per-share $3.29 versus expected $2.86
- revenues $8.19 billion versus expected $8.29 billion
- Streaming and paid net additions 5.89 million versus expected 2.07 million
Netflix’s guidance for Q3 includes the following:
- It projects revenue of $8.5 billion, which is slightly below the expected $8.67 billion.
- The company anticipates an earnings per share (EPS) of $3.52, surpassing the expected $3.23.
- Netflix expects the number of paid net additions to its streaming service in Q3 to be similar to this quarter.
Atlanta Fed GDPNow growth estimate for 2Q unchanged at 2.4% after housing data today
- The Atlanta Fed GDPNow estimate for 2Q growth
The Atlanta Fed GDPNow estimate for Q2 growth remained unchanged vs yesterday’s value at 2.4%. The US housing starts and building permits did little to sway the growth estimate.
In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2023 is 2.4 percent on July 19, unchanged from July 18 after rounding.After this morning’s housing starts report from the US Census Bureau, the nowcast of second-quarter real residential investment growth increased from -0.8 percent to 0.1 percent.
The US treasury auctions off $12 billion of 20 year bonds at a high yield of 4.036%
- WI level at the time of the auction was at 4.035%
The US treasury auctioned off a $12 billion of 20 year bonds.The details of the auction results compared to the six-month averages shows:
- High-yield 4.036%
- WI level at the time of the auction 4.035%
- Tail 0.1 basis points versus the 6 month average of -1.1 basis points
- Bid to cover 2.68X versus the six-month average of 2.71X.
- Directs (a measure of domestic demand) 21.7% versus the six-month average of 18.5%
- Indirects (a measure of international demand) 68.8% versus the six-month average of 71.8%
- Dealers 9.6% versus the six-month average of 9.7%
US June housing starts 1.434M versus 1.480M estimate
- The US in June 2023 housing starts and building permits data
- Prior housing starts 1.631M (data was much higher than the estimate of 1.400M) revised lower to 1.559M
- Prior building permits 1.491M (estimate last month was 1.420M)
- Housing starts 1.434M versus estimate of 1.480M
- Building permits for June 1.440M vs 1.490M estimate
- Building permits -3.7% versus +5.6% last month
- Housing starts -8.0% vs +15.7% last month (revised from 21.7% previously reported)
- In June, privately-owned housing completions reached a seasonally adjusted annual rate of 1,468,000, marking a 3.3% decrease from the revised May estimate of 1,518,000.
- YoY Housing completions are up 5.5% vs June 2022 rate of 1,392,000.
- The completion rate for single-family housing was 986,000 in June, 2.8% lower than the revised May rate of 1,014,000.
- The rate for units in buildings with five or more units was 476,000 in June.
Apple create an internal ChatGPT bot for employees
- Bloomberg reports that Apple is getting involved in AI chat
Apple has reportedly developed an internal AI bot similar to OpenAI’s ChatGPT, as it aims to advance its own generative artificial intelligence capabilities. Codenamed ‘Ajax’, this large language model framework is part of Apple’s bid to keep pace with the developments made by organizations like OpenAI, according to a report by Bloomberg. The move indicates Apple’s interest in utilizing AI technologies to foster internal innovation and potentially enhance customer experiences in the future.
Apple shares are currently trading up $4.14 or 2.13% at $197.79.The high price spiked to $198.19. Meanwhile, Microsoft is down -$2.89 or -0.80% at $356.74, and Google is down $0.83 or -0.67% $122.91
US MBA mortgage applications w.e. 14 July +1.1% vs +0.9% prior
- Latest data from the Mortgage Bankers Association for the week ending 14 July 2023
- Prior +0.9%
- Market index 210.7 vs 208.4 prior
- Purchase index 163.2 vs 165.3 prior
- Refinance index 446.4 vs 416.0 prior
- 30-year mortgage rate 6.87% vs 7.07% prior
Commodities
Gold price continues consolidation as investors await fresh cues about BRICS’ gold-backed currency
- Gold price has turned sideways around $1,980.00 as investors are awaiting a fresh trigger.
- The US Dollar Index sustains confidently above 100.00 despite an absence of supportive fundamentals.
- US Retail Sales for June showed a slowdown in consumer spending momentum.
Gold price (XAU/USD) is demonstrating a non-directional performance on Wednesday after printing a fresh seven-month high above $1,980.00. The precious metal witnessed immense strength on Tuesday after US Retail Sales for June showed that consumer spending momentum has slowed down but is still sufficient to push the Federal Reserve (Fed) to raise interest rates further at its July 26 FOMC meeting.
Inflationary pressures in the United States are slowing down as the recruitment process by firms is increasing at a snail’s pace. US firms are facing the wrath of higher interest rates by the Fed and tight credit conditions by regional banks. New filters have been added to the credit distribution process by commercial banks to maintain asset quality in a turbulent environment.
Below is a chart of gold’s Weekly Options open interest this year
WTI crude oil futures settle at $75.35
- Down $0.40 or -0.53%
The price of WTI crude oil futures are settling at $75.35.That is down $0.40 or -0.53%. The low price today reached $75.02. The high price extended to $76.87
EIA weekly US oil inventories -708K vs -2440K expected
- Weekly US petroleum inventory data for the week ending July 14, 2023
- Prior was +5946K
- Gasoline -1066K vs -1577K expected
- Distillates +14K vs +460K expected
- Refinery utilization +0.6% vs +0.0% expected
- Production estimate 12.3 mbpd vs 12.3 mbpd prior
- Implied gas demand: 8.86mbpd
Refineries ran hard last week in an attempt to build product inventories ahead of driving season.
EU News
European equity close: The FTSE 100 cheers softening inflation data
- FTSE 100 rises 1.7%
Closing changes for the main European bourses:
- FTSE 100 +1.7%
- Stoxx 600 +0.3%
- German DAX flat
- French CAC +0.2%
- Spain IBEX -0.1%
- Italy MIB flat
Eurozone June final CPI +5.5% vs +5.5% y/y prelim
- Latest data released by Eurostat – 19 July 2023
- Prior +6.1%
- Core CPI +5.5% vs +5.4% y/y prelim
- Prior +5.3%
UK June CPI +7.9% vs +8.2% y/y expected
- Latest data released by ONS – 19 July 2023
- Prior +8.7%
- Core CPI +6.9% vs +7.1% y/y expected
- Prior +7.1%
BOE watch: A 25 bps rate hike is now more favoured in August
- The terminal rate is seen at roughly 5.83% now after the softer UK CPI data
Earlier this week, the odds for a 50 bps rate hike in August were seen at around 66% but that has now dropped to roughly 41% with a 25 bps rate hike being favoured, with a probability of 59%.That comes after the UK CPI data earlier today.
BOE’s Ramsden: CPI inflation at 7.9% remains much too high
- Comments from Bank of England hawk David Ramsden
- QT should be thought of as operating in the background
- Repeats that he would like to increase the pace of gilt stock reduction
- Inflation has begun to fall significantly but remains much too high
- If there is evidence of persistent pressures, then further mon pol tightening would be required
- I am not going to comment on the detail of the data published since the June meeting. The August MPC round starts soon and will be completed with our announcement on 3 August.
- The latest UK inflation data shows indicators of inflation persistence still a bit higher than BOE expected in May
- Cannot rule out next interest rate cycle will get back to 0 lower bound and need to have room for new QE
- The impact of bank rate increases taking quite a bit longer to come through than expected
ECB Nagel: ECB very likely to raise rates by 25 basis points next week
- Nothing new in that comment
Some news and services are reporting that ECB’s Nagel is saying that the central bank is likely to raise rates by 25 basis points next week. The comments mirror earlier ones today:
- Inflation is a greedy beast
- It would be a mistake to ease up on the fight too soon and cut interest rates again prematurely
- Practically everyone expects an increase of 25 basis points next week
ECB’s Stournaras: Inflation is falling and more tightening could hurt the economy
- Stournaras says another 25 bps of hiking would be enough
Stournaras spoke with CGTN Europe. He’s made some dovish comments before and I think he’s onto something here.
Other News
Russia to consider all ships sailing to Ukrainian ports as potential military cargoes
- New policy to begin at midnight
Russia’s defense ministry says all ships sailing in the Black Sea to Ukrainian ports will be considered as potential carriers of military cargo beginning at midnight tonight.
Further, ships flagged of other countries will be considered involved in the Ukrainian conflict on the side of the Kyiv and a number of sea areas in the northwestern and southeastern parts of the international waters of the Black Sea are declared temporarily dangerous for navigation.
This wasn’t entirely unexpected but the language is particularly aggressive and that’s helped to lift grain prices.
China’s Industry Ministry says industry facing insufficient demand and declining revenues
China’s Industry Ministry statement:
- China’s industrial sector faces difficulties and challenges such as insufficient demand and declining revenues
- Will formulate plans to stabilise growth of 10 sectors including auto and steel
Japan sees over 2 million visitors in June, the first time since the pandemic
- No doubt that a weaker yen currency has helped with that
The number of foreign visitors for both business and leisure was seen at 2.07 million last month, crossing the 2 million mark for the first time since February 2020. That’s a positive sign for local businesses and the tourism sector, but is still down roughly 28% from the peak levels seen back in June 2019.
JP Morgan says 2 factors could lead to dedollarization – and markets are not pricing it in
Via Bloomberg reporting (gated) on a JP Morgan note for clients.
- among the factors that could threaten the dollar’s long-term dominance is political dysfunction in the US that could block efforts to manage the national debt, “preventing a government from stabilizing the economy during a crisis due to fiscal constraints,”
- is intensifying competition between the US and China
- “If US-China tensions intensify and we get more global fragmentation, it would likely lead to de-globalization in trade and finance,”
- “In finance, it could also lead to dedollarization.”
Cryptocurrency News
Traders ask how high heavens could be for Bitcoin price as SEC sets down eight BTC ETF applications
- The SEC has added six institutional names to the Federal Register, including BlackRock, Fidelity, and other spot BTC ETF applicants.
- The move, signifying an imminent review process, marks the 11th hour before approvals or rejections make headlines.
- With applicants and filings bearing promise, crypto enthusiasts already envision how high the skies could be for Bitcoin price.
The United States Securities and Exchange Commission (SEC) has traders on the edge of their seats with the latest move to add eight names to the Federal Register, comprising BlackRock and Fidelity, among six others, which submitted their spot Bitcoin ETF filings.
SEC sets down eight spot BTC applications to the Federal Register
The US SEC has recorded eight names to the Federal Register, comprising institutional players that filed for spot Bitcoin Exchange Traded Funds applications. These are BlackRock, Fidelity, BitWise, WidsomTree, VanEck, Invesco, Proshares, and Valkyrie.
US new bills could make DeFi protocol investors responsible, aim to fight crypto-facilitated crime
- Senators Warren, Marshall, Lummis and Gillibrand introduce a bipartisan bill amendment increasing regulation of cryptocurrencies.
- A further bill titled the Crypto-Asset National Security Enhancement Act of 2023 is focused on changing the regulatory landscape of the DeFi market.
- Nasdaq is set to cancel its plans of launching a crypto custody service, citing (uncertain) US regulatory conditions.
The US Senate has been busy preparing legislation to increase regulatory scrutiny of crypto providers. This includes an amendment to a new bill set to go before the Senate with a focus on Anti-Money Laundering (AML) and a bill that imposes the same regulatory demands on DeFi as those faced by mainstream financial institutions, including DeFi investors of over $25 million US Dollars being saddled with new obligations and responsibilities.
Follow our recently launched pages. Join our community and never miss a beat in the dynamic world of trading.
https://www.facebook.com/BilalsTechLtd
https://www.linkedin.com/company/bilals-tech/
