North American News
NASDAQ Leads the Way as Major Indices Close with Solid Gains at End of Trading Day
- Major indices close higher on the week
The major indices are ending the day with solid gains.The gains are led by the NASDAQ index which surged by 1.86%.The Dow industrial average was the laggard today, but still rebounded by 0.50% on the day. All the major indices are closing higher for the week.
The final numbers for the day are showing:
- Dow industrial average up 176.20 points or 0.50% at 35458.97
- S&P index up 44.76 points or 0.99% at 4582.16.The S&P closed at its highest level since January 2022.
- NASDAQ index up 266.54 points or 1.90% at 14316.65
The small-cap Russell 2000 is also solidly higher with a gain of 26.64 or 1.36% at 1981.53.
For the trading week, the NASDAQ index is leading the way with the largest gain this week.The Dow industrial average which ended a 13-day win streak yesterday closed higher for the week, but was the laggard of the major indices.
- Dow industrial average rose 0.66%
- S&P index rose 1.01%
- NASDAQ index rose 2.02%
Atlanta Fed GDPNow model starts Q3 growth at 3.5%
- The 2Q model called the Q2 growth of 2.4%
The Atlanta Fed GDPNow model which forecasts growth for the quarter from published data has started its Q3 estimate at 3.5%.
In their own words:
The initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2023 is 3.5 percent on July 28.The initial estimate of second-quarter real GDP growth released by the US Bureau of Economic Analysis on July 27 was 2.4 percent, equal to the final GDPNow model nowcast released on July 26 after rounding.
July final UMich US consumer sentiment 71.6 vs 72.6 expected
- Final UMich consumer sentiment data for July 2023
- Prelim was 72.6
- Prior was 64.4
- Current conditions 76.6 vs 77.5 prelim (69.0 prior)
- Expectations 68.3 vs 69.4 prelim (61.5 prior)
- 1-year inflation 3.4% vs 3.4% prelim (3.3% prior)
- 5-10 year inflation 3.0% vs 3.1% prelim (3.0% prior)
This is an interesting divergence with higher income consumers turning higher and lower income consumers (who have more debt and pay rent) slipping.That’s about what you would expect with rates rising in a country with 30-year fixed mortgages.
US June core PCE inflation +4.1% y/y vs +4.2% expected
- US June 2023 data from the US personal consumption expenditure report
- Prior was +4.6%
- PCE core 0.2% m/m vs +0.2% expected
- Prior MoM +0.3%
- Headline inflation PCE +3.0% y/y vs +3.0% expected (Prior +3.8%)
- Deflator +0.2% m/m vs +0.2% expected (prior was +0.1%)
Consumer spending and income for June:
- Personal income +0.3% vs +0.5% expected. Prior month +0.4% (revised to +0.5%)
- Personal spending +0.5% vs +0.4% expected. Prior month +0.1%
- Real personal spending +0.4% vs 0.0% prior (revised to +0.1%)
Dallas Fed June trimmed mean price index falls to 2.5% m/m annualized versus 3.2% prior
- The trimmed mean inflation index from the Dallas Fed
- Prior was 3.2% (revised to 3.5%)
- 6 month trimmed mean falls to 4.1% from 4.4% last month
- 12 month trimmed falls to 4.2% from 4.6% last month
Looking through the aggregate data to see what was included and excluded is sometimes instructive about what’s happening in the economy. Egg prices fell 59.6% m/m annualized and air transport fell 36.4%. The big gains were in motor vehicle insurance +63.4% and spectator sports +89.1%.
Here are the items sorted by weightings, note that all are annualized:
US employment costs for Q2 1.0% versus 1.1% expected
- US employment costs for the 2nd quarter of 2023
- Prior quarter 1.2%
- Employment costs 1.0% versus 1.1% expected
- Benefits 0.9% vs 1.2% last quarter
- Wages +1.0% versus 1.2% last month
Canada GDP for May +0.3% versus +0.3% expected
- May 2023 Canadian GDP data
- Prior month 0.0% revise to +0.1%
- May GDP 0.3% versus 0.3% expected
- Goods producing industries -0.3%
- Service producing industries +0.5%
- 12 of 20 industrial sectors posted increases
For the month of June ahead the projection shows:
- Advanced GDP estimate for June -0.2%
Commodities
Silver stabilizes after a sell-off above $24 as US PCE softens further
- Silver finds stabilization after a sell-off to near $24.00 amid strength in the US Dollar.
- The US core PCE price index gained at a pace of 0.2% in June as expected by the market participants.
- Silver price delivers a breakdown of the Double Top chart pattern formed above $25.00.
Silver remains topsy-turvy above the crucial support of $24.00 in the New York session. The white metal struggles to find direction as investors need strong cues about September’s monetary policy by the Federal Reserve (Fed) as policymakers held incoming data accountable for further action.
S&P500 opens on a bullish note as fears of a recession in the United States have faded significantly. Considering the stellar performance of the US economy in the April-June quarter and commentary from Fed officials that they are not expecting a recession due to the tight labor market, investors find strength for pumping money into US equities.
WTI Crude: Bears are waiting to pounce but bulls putting up a fight
- WTI is attempting to breakdown but the bulls stay in charge.
- A break of $79.00 is required for bearish thesis to be solidified.
WTI crude also rose 4.6% for the week, marking the fifth consecutive weekly increase, the longest winning streak since the week ending June 10, 2022. This leaves the longs exposed for the days ahead with the past 5 weeks of fundamentals playing in and ripe for a squeeze despite this week’s EIA data that was skewed slightly bullish.
Baker Hughes weekly US oil rig count -1
- US oil and gas drilling rig data
- Oil -1 to 529 rigs
- Gas -3 to 128
EU News
European equity close: DAX pops the top
- Despite European stocks showing mixed results, the DAX breaks out higher
European stocks were mixed today but the DAX broke out higher, generating some momentum. Still, the gains aren’t on par with the strong day for the Nasdaq:
- Stoxx 600 -0.1%
- German DAX +0.4%
- FTSE 100 +0.1%
- French CAC +0.4%
- Italy MIB -0.1%
- Spain IBEX -0.1%
For the week:
- Stoxx 600 +1.3%
- German DAX +1.9%
- FTSE 100 +0.5%
- CAC 40 +0.9%
- Italy MIB +2.4%
Eurozone July final consumer confidence -15.1 vs -15.1 prelim
- Latest data released by the European Commission – 28 July 2023
- Economic confidence 94.5 vs 95.0 expected
- Prior 95.3
- Industrial confidence -9.4 vs -7.5 expected
- Prior -7.2; revised to -7.3
- Services confidence 5.7 vs 5.4 expected
- Prior 5.7; revised to 5.9
Switzerland July KOF leading indicator index 92.2 vs 90.5 expected
- Latest data released by KOF – 28 July 2023
- Prior 90.8; revised to 90.7
France July preliminary CPI +4.3% vs +4.3% y/y expected
- Latest data released by INSEE – 28 July 2023
- Prior +4.5%
- HICP +5.0% vs +5.1% y/y expected
- Prior +5.3%
France Q2 preliminary GDP +0.5% vs +0.1% q/q expected
- Latest data released by INSEE – 28 July 2023
- Prior +0.2%; revised to +0.1%
Exports were the main contributor to growth on the quarter, with the breakdown showing:
- Domestic demand -0.1%
- Inventory changes -0.1%
- Net foreign trade +0.7%
Spain July preliminary CPI +2.3% vs +1.6% y/y expected
- Latest data released by INE – 28 July 2023
- Prior +1.9%
- HICP +2.1% vs +1.6% y/y expected
- Prior +1.6%
Spain Q2 preliminary GDP +0.4% vs +0.4% q/q expected
- Latest data released by INE – 28 July 2023
- Prior +0.6%; revised to +0.5%
Germany July preliminary CPI +6.2% vs +6.2% y/y expected
- Latest data released by Destatis – 28 July 2023
- Prior +6.4%
- HICP +6.5% vs +6.6% y/y expected
- Prior +6.8%
Saxony July CPI +6.7% vs +6.8% y/y prior
- Latest data released by Destatis – 28 July 2023
This, alongside the other state readings today, confirms that we should see German headline annual inflation later come in around 6.2% to 6.3% as estimated, just down slightly from 6.4% in June.
Bavaria July CPI +6.1% vs +6.2% y/y prior
- The latest German state CPI readings for July are being released
- Hesse CPI +6.1% y/y
- Prior +6.1%
- Brandenburg CPI +% y/y
- Prior +6.7%
Germany Q2 preliminary GDP 0.0% vs +0.1% q/q expected
- Latest data released by Destatis – 28 July 2023
- Prior -0.3%
North Rhine Westphalia July CPI +5.8% vs +6.2% y/y prior
- Latest data released by Destatis – 28 July 2023
ECB’s Villeroy: Upcoming meeting decisions will be entirely data driven
- Remarks by ECB policymaker, Francois Villeroy de Galhau
- Need to be pragmatic and keep an open mind
- Perseverance is now key given the time needed for full transmission of policy
- French inflation is falling even without a recession
- Our growing confidence in inflation moving towards the 2% target is based on good transmission of policy
ECB’s Kazimir: Premature to consider a September pause the end of the tightening cycle
- Kazimir says he wants a further “step” and that the ECB’s mission is “still not fulfilled”
- We should take a firm step further on our way to the top
- Even if we do take a break in September, it would be premature to automatically consider it the end of the cycle
- There is still risk of inflation coming in higher than expected
- We are looking for the right place to stay for a large part of next year
Other News
Biden plan to signed Executive Order to limit critical US technology investments in China
- Executive Order to go into effect but mid August
Bloomberg is reporting:
- Pres. Biden to sign Executive Order to limit critical US technology investments in China by mid August
- Planned Executive Order to focus on semi-conductors, AI, quantum computing. Won’t impact existing investments and will only prohibit certain transactions
BOJ governor Ueda: Need to patiently continue monetary easing to support the economy
- BOJ governor, Kazuo Ueda, begins his press conference
- The uncertainty remains very high on the economy, prices
- Will not hesitate to ease policy further if needed
- Decision today is aimed at making YCC more sustainable
- Long-term rates could move beyond 0.50% cap
- BOJ will step in if rates exceed 1% mark
- Will respond to speed and level of long-term rates if they move beyond 0.50%
- There is still a distance to achieving 2% inflation target
BOJ’s Ueda: We aim to rely on markets to determine long-term rates but there are limits
- BOJ governor, Kazuo Ueda, continues to remark in his press conference
- The 0.50% to 1.00% frame is to respond to future risks
- Now, we have added room to deal with upward moves in interest rates
- Policy decision not biased towards tightening
- The 1.00% mark is defined as a “just in case” cap
- It is appropriate to maintain strong monetary easing
Japan finance minister Suzuki says specific monetary policy up to BOJ to decide
- Remarks by Japan finance minister, Shunichi Suzuki
- Understand today’s decision is aimed at making YCC more flexible
- Also to make monetary easing more sustainable
- Expects BOJ to conduct monetary policy appropriately
Bank of Japan offers to buy up to 750bn yen of 3-5 year JGBs, up from 725bn
Reuters reporting that:
- Bank of Japan widens range of 3-5 year bond buying, offering to buy as much as 750 bln yen each time, up from 725 bln yen
Cryptocurrency News
XRP Ledger notes monumental transfer of 54.3 billion Palau Stablecoin, network effect could boost XRP price
- XRPLedger facilitated a massive transfer of upwards of 54.3 billion Palau Stablecoin to a Trust Set.
- The large volume transfers could act as a game changer for XRP with the resulting network effect and adoption fueled by Palau’s use of the XRPL.
- Experts believe that large scale use of XRPLedger could drive XRP price higher in the long term.
XRPLedger witnessed a large volume transfer of Palau Stablecoin, a transfer of 54.3 billion PSC on XRP’s blockchain.
XRPLedger adoption is on the rise
Palau, an oceanic island nation, is currently running a trial of Palau Stablecoin, linked to the US Dollar. The project started its pilot on XRP’s blockchain, the XRP Ledger. Based on data from XRP scan, Palau initiated transfers of more than 54.3 billion PSC to the Trust set through the XRPLedger.
Over the past three weeks, Palau has been leveraging XRPLedger and previously its Central Bank Digital Currency (CBDC) platform. It’s important to note that these transactions are driving higher adoption of the XRP blockchain, and the token, using it to pay transaction fees.
Chainlink price recovers fueled by large transactions, whale accumulation
- Chainlink jumped ahead of altcoins in top 30 cryptocurrencies in July with large volume transactions by whales.
- Whales holding between 1,000,000 and 10 million LINK tokens are rapidly accumulating the altcoin.
- Gains in LINK price over the past two weeks are likely powered by a large volume of transactions of more than $1 million each.
Chainlink witnessed a surge in transactions and accumulation by large wallet investors, popularly known as whales, over the past two weeks. These bullish on-chain metrics of LINK can explain the altcoin’s price hike over the last 14 days. Chainlink ranks among the top 30 cryptocurrencies by market capitalization and the token is leading the pack of altcoins this alt season in July.
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