North American News
US stocks close higher as the Dow industrial average rises for the 12 consecutive day
- If you’re wondering 13 days is the record streak for the Dow industrial average set back in 1987
The major indices are closing higher. The Dow industrial average closed higher for the 12th consecutive day.Both the Dow and S&P hit 52 week highs today.
The final numbers are showing:
- Dow industrial average rose 26.67 points or 0.08% at 35437.92
- S&P index rose 12.89 points or 0.28% at 4567.54
- NASDAQ index rose 85.68 points or 0.61% at 14144.55
Leading the Dow 30 today is:
- 3M (announced this morning), up 5.36%
- Microsoft (ahead of earnings after the close), up 1.70%
- Dow (announced this morning), up 1.52%
- Intel, up 1.40%
Alphabet and Microsoft beat on earnings
- Alphabet shares are higher in after-hours trading. Microsoft shares are marginally lower.
Alphabet Inc (GOOGL):
Alphabet Inc’s Q2 2023 performance surpassed expectations, with
- Earnings per share (EPS) coming in at $1.44, ten cents higher than the forecasted $1.34.
- Revenue, too, outstripped predictions at $74.6 billion versus an expected $72.82 billion.
Alphabet’s robust financial performance has triggered a positive market response, with the company’s shares trading up $5.79 in after-hours trading or 4.85%
Microsoft Corp (MSFT):
Microsoft’s Q4 2023 financial results also exceeded expectations across the board.
- EPS reached $2.69, higher than the anticipated $2.55.
- Total revenue came in at $56.2 billion, surpassing the predicted $55.47 billion.
Drilling down into the revenue breakdown, the
- Productivity and Business Processes segment posted $18.29 billion,
- Intelligent Cloud registered $23.99 billion, and
- More Personal Computing noted $13.91 billion, all marginally higher than expected.
Key Metrics:
Microsoft’s operating income for the quarter also outperformed the forecasted amount, reaching $24.25 billion compared to the expected $23.28 billion.Interestingly, the company’s Capital Expenditure (CapEx) was higher than anticipated, coming in at $8.94 billion against the predicted $7.85 billion, indicating a strategic investment in its infrastructure and capabilities.Further guidance regarding these results and the company’s forward-looking strategy is expected to be provided in the earnings call.
The US treasury auctions off $43 billion of five-year notes at a high yield of 4.17%
- The WI level at the time of the auction was 4.166%
- High yield 4.17%
- WI level at the time of the auction 4.166%
- Tail 0.4 basis points vs a six-month average of -0.7 basis points
- Bid to cover 2.60X versus six-month average of 2.54X
- Directs 22.13% versus six-month average of 17.9%.
- Indirects 64.38% versus six-month average of 70.7%.
- Dealers 13.49% versus six-month average of 11.4%.
S&P Case Schiller May 20-city US house price index +1.0% m/m versus 0.7% expected
- S&P Case Shiller Home Price data for May
Data from the top-20 cities:
- Prior was +0.9%
- Year-over-year prices -1.7% vs -2.2% expected
- Prior was -1.7% y/y
National data from the FHFA:
- Prices +0.7% m/m vs +0.7% prior
- Prices y/y +2.8% vs +3.1% prior
US July consumer confidence 117.0 vs 111.8 expected
- US July 2023 consumer confidence data from the Conference Board
- Highest since July 2021
- Prior was 109.7
Details:
- Present situation index 160.0 vs 155.3 prior
- Expectations index 88.3 vs 79.3 prior
- 1 year Inflation 5.7% vs 6.0% prior
- Jobs hard-to-get 9.7 vs 12.4 prior
Philly Fed July non-manufacturing index +1.4 vs -16.6 prior
- Big jump in the service-sector survey
- Prior was -16.6
- Firm-level activity +2.0 vs -7.5 prior
- New orders -13.3 vs -16.2 prior
- Employment +11.9 vs -14.3 prior
Richmond Fed composite manufacturing index -9 versus -8 in June
- Richmond Fed index for July 2023
- Prior month -7 revised to -8
- Richmond Fed manufacturing composite index -9 versus -8 in June
- Shipments index -6 versus -5 in June
- Services revenue index -2 versus -8 and June
- employment 5 versus -1 last month
- wages 19 versus 17 last month
- prices paid 4.07 versus 4.56 last month
- prices received 4.01 versus 4.56 last month
US Speaker McCarthy: House is considering an impeachment inquiry of Pres. Biden
- Impeachment on the weaponization of government to benefit his family and deny Congressional oversight
US Speaker of McCarthy is a saying that the House of Representatives is considering an impeachment inquiry of Pres. Biden. The grounds are the weaponization of government to benefit his family and denied congressional oversight.
The November 2024 election is just 15 – 16 months away. Let the games begin.
UPS and Teamsters reach a tentative agreement
- Agree on broad pay ranges for the workers
UPS and the Teamsters (labor union) has reached a tentative wage agreement and in doing so is to avert a strike. A date for settlement was to be July 31st.
IThe Union it says: “The overwhelmingly lucrative contract raises wages for all workers, creates more full-time jobs, and includes dozens of workplace protections and improvements.”
Canada June flash manufacturing sales -2.1%
- More weak Canadian data
Last week’s soft retail sales data dimmed expectations for further Bank of Canada rate hikes and now the evidence of a worsening economy is spreading.Manufacturing sales fell 2.1% in June according to the flash estimate from Statistics Canada.The largest declines were in the petroleum and coal product, chemical, and food product industries.
A separate StatsCan report showed that Canadian airline passengers rose 22.0% y/y in May but remain 5.6% below the May 2019 level. However the load factor was at 85.5% vs 83.9% four years ago as airlines run on tighter capacities.
Commodities
Silver recovers some lost ground above $24.50 mark
- Silver price gains traction and holds above $24.55 on Tuesday.
- XAG/USD holds below the 50- and 100-hour EMAs with a downward slope.
- Immediate resistance is seen at the $24.60-$24.65 zone; $24.30 acts as an initial support level.
Silver recovers some lost ground and snaps three days of consecutive losses heading into the European session on Tuesday. XAG/USD currently trades around $24.55, up 0.88% for the day.
Market players await the Federal Open Market Committee (FOMC) meeting and Fed Chairman Jerome Powell’s press conference for further guidance for the entire year.
According to the one-hour chart, XAG/USD holds below the 50- and 100-hour Exponential Moving Averages (EMAs) with a downward slope, which means further downside for silver looks favorable.
WTI crude futures settles at $79.63
- Up $0.89 or 1.313%
The price of WTI crude oil is settling at $79.63.That’s up $0.89 or 1.13%. The high price reached $79.90 today. The low price was at $78.29.
Recall from yesterday, the price extended above its 200 day moving average for the 1st time since August 2022.That 200 day moving averages currently at $77.11.It would take a move back below that level to tilt the bias back to the downside.
On the top side, the $80.00 natural resistance is the next target. Following that, traders will look toward a swing area between $82.48 and $83.44 .
Natural Gas Futures: Probable rebound in store
Open interest in natural gas futures shrank by around 8.7K contracts at the beginning of the week, extending the downtrend for the fourth session in a row according to preliminary readings. In the same direction, volume dropped for the second consecutive day, now by around 34.2K contracts.
Natural Gas: Door open to further advance
Monday’s second daily pullback in prices of natural gas was on the back of diminishing open interest and volume, hinting at the probability that a near-term rebound could be in the offing. Against that, the next target for the commodity is expected at the June tops near the $2.90 mark per MMBtu (June 28).
Crude Oil Futures: Extra gains favoured near term
Data for crude oil futures markets noted traders increased their open interest positions for the second session in a row on Monday, this time by around 13.7K contracts. In the same line, volume went up by around 98.5K contracts after three consecutive daily pullbacks.
EU News
European shares close the day with mixed results
- US stocks are higher as London/European traders look to exit
The major European indices are ending the day with mixed results:
- German DAX +0.13%
- Frances CAC, -0.16%
- UK’s FTSE 100 +0.17%
- Spain’s Ibex, -0.25%
- Italy’s FTSE MIB, +0.07%
European Luxury brand LVMH announces earnings and sees a slowdown in US sales.Asia strong
- Sales down 1% in the US
The European luxury brand company LVMH, reported Q2 2023 earnings with revenues of 21.21 billion Euros, surpassing the expected 20.6 billion Euros. However, sales in the U.S. fell by 1%. The company stated that it doesn’t anticipate further price increases in the near term. Despite the drop in U.S. sales, LVMH expressed satisfaction with its Q2 performance in China.
Geographically, sales in Japan increased by 29%, in Asia-excluding Japan by 34%, and in Europe by 19% (vs 24% in Q1).But there was a reduction compared to previous rates.
By segment, the Fashion & Leather department saw an increase of 21%, slightly higher than expected(20.8%). Perfumes & Cosmetics, Watches & Jewelry, and Selective Distribution segments also saw growth, with increases of 16%, 14%, and 25% respectively. However, Wines & Spirits underperformed with a decrease of 8%, against an expected decrease of only 0.7%.
Germany July Ifo business climate index 87.3 vs 88.0 expected
- Latest data released by Ifo – 25 July 2023
- Prior 88.5; revised to 88.6
- Expectations 83.5 vs 83.4 expected
- Prior 83.6; revised to 83.8
- Current conditions 91.3 vs 93.0 expected
- Prior 93.7
UK July CBI trends total orders -9 vs -18 expected
- Latest data released by CBI – 25 July 2023
- Prior -15
Eurozone firms’ demand for credit falls to lowest on record in Q2 – ECB survey
- Can you say credit crunch?
According to the latest survey by the ECB, the net demand for loans among euro area firms saw a strong decline in Q2 – falling to an all-time low since the start of the survey in 2003. Adding to that, banks are expecting a further drop in loan demand in Q3 but at a “much smaller” scale at least.
Other News
IMF boosts 2023 global growth forecast as US and UK prospects improve
- The latest quarterly IMF GDP estimates
- 2023 global GDP +3.0% vs 2.8% in April
- 2024 GDP at 3.0% vs +3.0% in April
- China 2023 GDP at 5.2% vs 5.2% in April
- Eurozone GDP at +0.8%
- UKGDP to grow 0.4% vs -0.3% in April
- German GDP contracting 0.3% vs -0.1% in April
- US GDP growth at 1.8% vs 1.6% in April
China appoints Pan Gongsheng as new PBOC governor
- The latest news as announced by the Chinese state media
Beijing has moved to remove Yi Gang from the post of PBOC governor and he has been replaced with Pan Gongsheng. Meanwhile, Qin Gang has been removed from the post of foreign minister and will be replaced with Wang Yi.
Credit Agricole: BOJ unlikely to adjust YCC, temporary reprieve for JPY
Credit Agricole has provided their insights regarding the upcoming July meeting of the Bank of Japan (BoJ) and its implications for the Japanese Yen (JPY).
Key Highlights
- BoJ’s July Meeting Anticipation:
- Investors are looking forward to potential modifications to the Yield Curve Control (YCC) by the BoJ in their July meeting.
- Inflation Predictions:
- Credit Agricole’s Japan analysts foresee a declining inflation trend in the second half of 2023. Despite some inflationary pressures, structural barriers like sluggish wage growth and significant non-financial corporate savings will likely prevent inflation fromconsistently approaching the BoJ’s 2% target.
- Pressure on YCC:
- The BoJ faces diminished pressure to modify its YCC to make it more sustainable. The reason being, while the market is still predicting morerate hikes by the Federal Reserve, it concurrently believes that theclimax of these hikes is approaching. This anticipation reduces the upward pressure on the 10-year JGB yield.
- Likely Outcome:
- Given these factors, Credit Agricole predicts that the BoJ will not make any significant changes to its YCC in the upcoming July meeting, which could lead to some disappointment among investors.
- JPY Outlook:
- Any relief for the Japanese Yen stemming from potential positive surprises in inflation is expected to be short-lived.
Rising commodity prices could kill soft landing narrative, are “bull market kryptonite”
An analyst at US financial firm Raymond James says not to take your eye off steadying and rising commodity prices.
- “The rally in equities globally since October has been built partially on the continued decline in commodity pricing, which has helped U.S. and European consumers, lowered the inflation outlook/rates, and generally helped build a narrative of “soft landing” around capital markets,”
- “However, sincelate May, the Bloomberg commodity index has been moving up (~10%),and though still down on the year, it’s worth paying attention to, because continued commodity inflation has the chance of transitioning the dominant narrative from ‘soft landing’ back to ‘stagflation’, essentially returning to summer/fall 2022 narratives.”
Cryptocurrency News
Binance expands operations to Japan after regulatory troubles in US intensify
- Japan’s prime minister recently acknowledged the country’s position as a web3 hub and the potential for transformation through technology.
- Binance CEO Changpeng Zhao shared plans to expand crypto services in Japan starting August as regulators intensify crackdown in the US.
- Binance acquired SEBC in November 2022 a crypto exchange in compliance with the Japan Financial Services Agency.
Binance, one of the largest cryptocurrency exchanges in the world, recently acquired a full stake in a regulated Japanese crypto platform with plans to expand to Asia’s upcoming crypto hub.
Binance CEO, Changpeng Zhao (CZ), confirmed the exchange’s expansion plans.
Binance CEO CZ confirms Japan expansion plans
Fumio Kishida, Japan’s Prime Minister, recently acknowledged the transformative potential of web3 applications in a conference. With Japan emerging as a hub for regulated cryptocurrency exchanges and firms, Binance’s plans to expand into the Asian country are taking shape.
Ducati announces release of NFT collection on XRPLedger, XRP sees wider adoption in web3
- Ducati announced the launch of its first digital collectible on the XRPLedger, entering the web3 race with XRP.
- XRPLedger’s XLS-20 standard facilitates the rollout of such projects that make XRP relevant in the web3 ecosystem.
- Following Ducati’s lead, high-end brands are likely to deploy their digital collectibles and create aggregation spaces on the XRPL.
Ducati, an Italian motorcycle manufacturer, announced the launch of its first-ever digital collectibles on the XRPLedger. The brand chose XRP through the XLS-20 standard to expand its footprint in the web3 ecosystem.
The move is likely to drive the adoption of XRPLedger’s native token XRP and catalyze the altcoin’s recovery in the long term.
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