North American News
Nasdaq’s Record Closing Streak Ends
- The S&P falls, but the Dow moves higher
The Nasdaq’s impressive streak of seven consecutive days of record-high closes has come to an end. Over this period, the index consistently reached new peaks each day. However, today’s decline marks the worst performance since May 30.
In contrast, the Dow Jones Industrial Average experienced its third consecutive day of gains, with a robust increase of 300 points. This marks the Dow’s strongest performance since May 31, showcasing a notable divergence in the performance of these major indices.
Closing numbers:
- Dow industrial average rose 299.88 points or 0.77% at 39134.79
- S&P index fell -13.78 points or -0.25% at 5473.24
- Nasdaq index fell -140.64 pointe or -0.79% at 17721.59
The small-cap Russell 2000 index fell -7.83 points r -0.39% at 2017.39.
The top-3 capitalized stocks all fell today with Nvidia the worst of the 3:
- Nvidia fell -$4.80 or -3.54% to $130.78
- Apple fell -$4.61 or -2.15% to $209.68
- Microsoft fell -$0.64 or -0.14% to $445.70.
US sells 5-year TIPS at 2.050%
- Results of the 5-year TIPS auction
- Prior was 2.242%
- Bid-to-cover ratio 2.52
- High yield 2.050% vs 2.074% presale WI
- Sells $21 billon
- Awards 87.44% of bids at high
- Primary dealers take 2.33%
- Direct 18.52%
- Indirect 79.14%
Atlanta Fed GDPNow 3.0% vs 3.1% prior
- The latest Q2 estimate from the Atlanta Fed
In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 3.0 percent on June 20, down from 3.1 percent on June 18. After this morning’s housing starts report from the US Census Bureau, the nowcast of second-quarter real gross private domestic investment growth decreased from 8.8 percent to 8.3 percent.
US initial jobless claims 238K vs 235k estimate
- The weekly US initial and continuing jobless claims
- Prior week 242K
- Initial jobless claims 238K vs 235K estimate
- 4-week moving average 232.75K vs 227.25K last week
- Continuing Claims 1.828M vs 1.805M estimate
- Prior week continuing claims 1.820M revised to 1.813M
- 4-week Moving average for continuing claims 1.806M vs 1.795M last week
US May housing starts 1.277m vs 1.370m expected
- US May 2024 housing starts
- Prior was 1.360m
- Building permits 1.386m vs 1.450m expected
- Starts down 5.5% m/m
- Multi-family starts down 52% y/y
US June Philly Fed +1.3 vs +5.0 expected
- The Philly manufacturing survey for June 2024
- Prior was +4.5
- Employment: -2.5 vs -10.7 prior
- New orders: -2.2 vs +12.2 prior
- Prices paid: +22.5 vs +23.0 prior
- Prices received: vs +5.5 prior
- Shipments: vs +19.1 prior
- Unfilled orders: vs +0.8 prior
- Delivery times: vs -9.4 prior
- Inventories: vs -8.9 prior
- Average employee workweek: vs -18.7 prior
Look-ahead indexes:
- Six month index: +13.8 vs +34.3 prior
- Employment: +19.0 vs +12.8 prior
- New orders: +16.2 vs +42.8 prior
- Shipments: -0.1 vs +29.3 prior
- Prices paid: +56.3 vs +54.5 prior
- Prices received: +58.8 vs +31.4 prior
US Q1 current account -237.6B vs. -206.4B expected
- The first reading on the US current account for Q1 2024.
- US Q1 current account -237.6B vs. -206.4B expected and -221.8B prior (revised from -194.8B).
White House’s Brainard: There is every reason to expect further inflation progress
- Comments from the former Fed Governor
- There is not enough progress on healthcare and housing prices
- The aberrations in Q1 inflation haven’t stretched into Q2
Fed’s Kashkari: It will probably take a year or two to get inflation back to 2%
- Comments from the Minneapolis Fed President
- Wage growth might still be a bit too high to get back to 2% right now.
- It will probably take a year or two to get inflation back to 2%.
- The economy keeps throwing us curve balls, which are challenging.
- There is some evidence of some softening around the edges of the economy.
- I don’t see value proposition of CBDC for the US.
- Optimistic that fundamentals of the economy are very strong.
- We are getting disinflation despite remarkable economic growth.
- The interest rate outlook depends on path of economy.
United Airlines expects July 4 weekend to be the busiest ever
- A good sign for consumers and oil demand
The American consumer isn’t tapped out yet.
United Airlines said it expects more than 5 million Americans to fly over the July 4 holiday, in what would be a record for travel in the period.
Hedge fund boot camp – Citadel internship pays US$19K a month
- Star traders wanted, and grown
Bloomberg have a piece up: Hedge Fund Talent Schools Are Looking for the Perfect Trader
Bloomberg is gated but if you can access it its an interesting read
The birth of these programs captures a historic change in this $4.3 trillion industry — as it moves on from the era of wildly competitive one-offs like Griffin and Cohen and tries to incubate a new generation of leaders with softer skills such as team building and listening to other people’s bright ideas. More critically, they’re also being driven by a recruitment crisis. The behemoths of the hedge fund world simply don’t have enough star traders to share around.
Canadian consumer spending dropped in May – RBC
- RBC card data on Canadian May spending
RBC is out with its monthly review of Canadian credit card spending. As the nation’s largest bank, the number should offer clues on the strength of the Canadian consumer.
The report notes that momentum in discretionary purchases faded in May after a rise in April. restaurant sales edged slightly lower in May and were not significantly different from the end of 2023. Home renovation spending continues to be suppressed and has steadily trended lower since spring 2022.
“Overall, consumer spending after accounting for record levels of population growth (or on a per-capita basis) continues to weaken in Q2, alongside declines in per-capita GDP,” the report says.
Commodities
Gold shines as prices climb to two-week high
- Gold up $32 to $2360
Gold is trading at the highest since the June 7 drop.
The chart looked to be teeing up a a head-and-shoulders top but the bulls have fought back and a rise above $2387 would help to invalidate it.
The turn this week may have come after a World Gold Council survey showing that 29% of central banks planned add to gold holdings in the year ahead, the most since the survey began in 2018. Gold prices had previously fallen after May data showed the PBOC refraining from buying gold after somewhat of a spree.
Crude oil settles up for August
- Crude oil for August settled up $0.58 at $81.29.That’s up $0.58 or 0.71%.
Over the last five trading days, the price has increased on four occasions, with a minor dip of $0.15 on Wednesday. This upward trend pushed the price above the 100-day and 200-day moving averages on Monday, which are $79.58 and $79.37, respectively. Additionally, the price surpassed the 50% retracement level of the decline from the April 5 high to the June low, which is $80.01.
EIA weekly crude oil inventories
- Data for the week ending July 14
- Crude Oil -2547K vs -2200K expected
- Prior was +3730K
- Gasoline -2280K vs +620K expected
- Distillates -1726K vs +261K expected
- Production unchanged at 13.2 mbpd
- Refinery utilization -1.5% vs +0.1% expected
- Cushing: 0.307M
Gold nudges back up a little on the day but caution remains
- The precious metal is up 0.6% to just above $2,340 currently
In the bigger picture, gold is very much still in a consolidative mood. The price action this week is supported by the news that central banks are still intending to bolster their gold reserves in the long run. That is keeping slightly more underpinned in the last few sessions. However, the chart still outlines a rather sideways mood as of late.
Czech central bank governor Michl wants to buy 60 tons of gold, ” gradual purchases”
- Over the next 5 years wants to boost gold holdings to 100 metric tons from currently around 40 tons
Czech National Bank Governor Aleš Michl has outlined plans aimed at improving returns on its foreign-currency reserves.
Over the next five years he plans to:
- boost the share of equity holdings in reserves to 30%
- boost gold holdings from currently around 40 metric tones to 100
EU News
European equity close: Gains in three of the past four
- Closing changes for the main European equity bourses
- Stoxx 600 +0.8%
- German DAX +0.9%
- UK FTSE 100 +0.7%
- French CAC +1.3%
- Italy MIB +1.4%
- Spain IBEX +0.9%
Eurozone June consumer confidence (flash) -14.0 vs. -13.6 expected
- The preliminary reading on the Eurozone consumer confidence for June 2024
- Consumer confidence -14.0 vs. -13.6 expected and -14.3 prior.
Germany May PPI 0.0% vs +0.3% m/m expected
- Latest data released by Destatis – 20 June 2024
- Prior +0.2%
Slight delay in the release by the source. If you strip out energy prices, producer prices were actually higher by 0.3% compared to April. The breakdown shows that an increase in prices for intermediate goods (+0.3%), capital goods (+0.2%), and non-durable consumer goods (+0.1%). That is offset by a decline in energy prices (-0.5%) and durable consumer goods (-0.1%).
BOE leaves bank rate unchanged at 5.25%, as expected
- The Bank of England announces its June 2024 monetary policy decision
- Prior 5.25%
- Bank rate vote 7-0-2 vs 7-0-2 expected (Dhingra, Ramsden voted to cut by 25 bps)
- For some policymakers, decision today was “finely balanced”
- That is because higher-than-expected services inflation reflected factors that would not push up medium-term inflation
- Labour market continues to loosen but remains relatively tight by historical standards
- Key indicators of inflation persistence continue to moderate, but remain elevated
- Need to be sure inflation will stay low before cutting rates
- Monetary policy will need to remain restrictive for sufficiently long to return inflation to target
- BOE remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably
- Will continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole
The BOE added this passage:
“As part of the August forecast round, members of the Committee will consider all of the information available and how this affects the assessment that the risks from inflation persistence are receding.”
SNB cuts key policy rate by 25 bps to 1.25% from 1.50% previously
- The Swiss central bank announces its monetary policy decision for June 2024
- Prior 1.50%
- Ready to intervene in FX market if needed and as necessary
- A renewed increase in geopolitical tensions could result in weaker global activity
- Able to maintain appropriate monetary conditions as such
- Will adjust monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium-term
- Inflation in Switzerland is currently being driven above all by higher prices for domestic services
- Sees 2024 inflation at 1.3% (previously 1.4%)
- Sees 2025 inflation at 1.1% (previously 1.2%)
- Sees 2026 inflation at 1.0% (previously 1.1%)
Switzerland May trade balance CHF 5.81 billion vs CHF 4.32 billion prior
- Latest data released by the Federal Statistics Office – 20 June 2024
- Prior CHF 4.32 billion; revised to CHF 4.34 billion
The Swiss trade surplus expanded in May as exports grew by 0.6% while imports fell by 6.5% on the month.
Germany’s Ifo institute raises 2024 GDP forecast, says “new hope is emerging”
- Ifo lifts is 2024 GDP forecast for the German economy to +0.4%, up from +0.2% in March
On the optimistic change, Ifo says that:
“The German economy is slowly working its way out of the crisis.New hope is now emerging. The second half of 2024 should be significantly better than the first. As the year progresses, the purchasing power of private households should continue to gain strength and the overall economic recovery should pick up speed as the consumer economy normalises.”
SNB chairman Jordan: Swiss franc appreciation is due to political uncertainties
- Remarks by SNB chairman, Thomas Jordan
- Swiss franc has significantly increased in past few weeks
- Underlying inflation pressure has decreased
- We will continue to monitor developments closely, adjust policy if necessary
- Willing to be active in foreign exchange markets as necessary
- There has been appreciation in the Swiss franc
- That has an impact on monetary conditions
- Exchange rate plays a very important role as it influences inflation outlook
- Will adjust policy rate to ensure inflation stays in the range of price stability
- FX intervention can be in both directions
ECB’s Knot: Optimal policy path is broadly in line with just under three rate cuts in 2024
- Remarks by ECB policymaker, Klaas Knot
- There is strong case for using projection meetings to recalibrate policy stance
- High uncertainty warrants a data-dependent approach
- Disinflation process remains bumpy
- Not all the signs are green yet when it comes to core inflation
- Recent shift in market expectations shows that the road to meet inflation target is bumpy
- We can look through small deviations from target as long as we respond especially forcefully to larger deviations
Asia-Pacific-World News
PBOC Loan Prime Rates remain unchanged at today’s rate setting, as expected
- People’s Bank of China LPRs set at 3.45% for the one-year and 3.95% for the five-year
LPR rates remain:
- 3.45% for the one year
- unchanged for 10 months
- 3.95% for the five year
- this was cut in February from 4.20%
PBOC sets USD/ CNY central rate at 7.1192 (vs. estimate at 7.2653)
- PBOC CNY reference rate setting for the trading session ahead
PBOC injects 20bn via 7-day RR, sets rate at an unchanged 1.8%
- 2 bn yuan mature today
- a net 18 bn yuan injection Open Market Operations (OMOs)
New Zealand Q1 GDP +0.2% q/q (expected +0.1%)
- New Zealand economic growth data for the first quarter of 2024
New Zealand economic growth data for the first quarter of 2024 – a growing economy again, NZ exits recession.
+0.2% q/q
- expected +0.1%, prior -0.1%
+0.3% y/y
- expected +0.2%, prior -0.3%
A beat for the q/q and y/y.
The latest forecasts from the RBNZ had projected 0.2% growth for the first quarter. The Bank will be satisfied that the economy is growing as it had expected.
The Bank has held the cash rate at 5.5% for 7 meetings in a row.
ICYMI – New Zealand Q2 consumer confidence falls to 82.2 from 93.2 in Q1
- Westpac McDermott Miller consumer sentiment survey for the second quarter of 2024
Japan top currency diplomat says there is no limit to FX intervention resources
- Remarks by Japan top currency diplomat, Masato Kanda
- Will thoroughly respond to excessive FX moves
- FX market is determined by various factors, including interest rate differentials
- Recent FX intervention was quiet effective in responding to speculators
Japan survey of firms – very few believe wage growth quicker than inflation achievable
- Not bullish on quick enough wage growth to support inflation goal
Reuters Japan corporate survey:
- Only 7% of Japanese companies believe PM Kishida’s pledge to have wages grow faster than inflation is achievable
- 61% of japanese companies see no need for govt to take countermeasures against China’s excess production capacity
That 7% on wage rises is troubling for the Bank of Japan’s inflation goal – the Bank is relying on faster wage growth to propel demand-driven inflation.
Reuters converting the sentiment amongst most firms:
- “I’m afraid there are many mid-sized and small companies that just can’t make ends meet if they implement wage hikes that keep pace with inflation,” a manager at a wholesale company wrote. Half said the goal was not attainable while 43% said it was hard to tell.
Cryptocurrency News
Bitwise pokes fun at TradFi with Ethereum ad
- Ethereum ETF issuer Bitwise launches ad marketing its spot ETH ETF.
- ETH restaking and rehypothecation have been on an upward trend since April.
- Ethereum’s open interest decline could help cool rising volatility.
Ethereum’s (ETH) price is down about 1% on Thursday following a Bitwise Ethereum ad that slightly poked fun at traditional finance. Meanwhile, Ethereum restaking has continued to grow amid potential systemic risks.
Bitwise Ethereum ad, re-staking risks
As the potential launch of spot ETH ETF draws closer, issuers have begun launching marketing campaigns in a bid to capture the market. Bitwise released a 40-second marketing ad on Thursday comparing Ethereum’s ability to move assets 24/7 daily across the globe against traditional finance’s seven-hour and weekend time limitations.
Bitwise earlier filed its updated S-1 draft with the Securities & Exchange Commission (SEC) on Tuesday after the agency commented on it last Friday.
Nate Geraci, President of the ETF Store, expects other issuers to send in their updated S-1s before the end of the week. He also speculated that spot ETH ETFs could launch before July 4.
Artificial Intelligence tokens rally after Safe Superintelligence announcement by former OpenAI co-founder
- OpenAI former co-founder Ilya Sutskever announced on Wednesday the launch of a new AI research lab in the US.
- News of Safe Superintelligence Inc.’s launch has catalyzed gains in AI-related crypto tokens.
- The market capitalization of the AI category is up 12% in the past 24 hours.
Prices of Artificial Intelligence (AI) crypto tokens increase on Thursday after news of OpenAI co-founder starting his own firm.Ilya Sutskever, OpenAI’s former chief scientist, announced the launch of a safety-focused AI research lab in Palo Alto and Tel Aviv, in the US.
The news comes amidst concerns surrounding the safety aspect of Artificial General Intelligence (AGI), under development at OpenAI.
The market capitalization of AI tokens is up 12% in the past 24 hours.
Artificial Intelligence tokens note massive gains in prices
AI tokens such as Near Protocol (NEAR), Fetch.ai (FET), Internet Computer (ICP), Render (RNDR), Bittensor (TAO), The Graph (GRT), SingularityNET (AGIX), and Akash Network (AKT) extended gains in the past 24 hours, according to the data.
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