Round up of today’s market news

North American News

Stocks Edge Lower Ahead of Key Earnings Announcements

Broader stock indices moved lower today as the market anticipates several key earnings reports. Big-cap tech stocks, particularly in the Nasdaq, saw declines ahead of Microsoft’s earnings announcement. Meanwhile, the Dow Jones Industrial Average rose, bolstered by gains in ten stocks, including Travelers and Goldman Sachs.

Key Movers:

1. Dow Jones Industrial Average:
   • Travelers (TRV): +3.10%
   • Goldman Sachs (GS): +2.64%
   • JPMorgan (JPM): +2.03%
   • McDonald’s (MCD): +1.95%
   • Chevron (CVX): +1.90%
   • American Express (AXP): +1.84%
   • Walt Disney (DIS): +1.80%
   • UnitedHealth (UNH): +1.75%
   • Johnson & Johnson (JNJ): +1.73%
   • Dow (DOW): +1.57%
2. Nasdaq:
   • Notable large-cap stocks like Microsoft, AMD, Starbucks, and Pinterest led the decline ahead of their earnings releases.
   • Microsoft reported better-than-expected earnings per share (EPS) and revenue, but missed on key cloud revenue metrics, leading to a -7% drop in after-hours trading.
   • Amazon shares also declined by -4.16% due to the cloud revenue miss.

Earnings Highlights:

1. Microsoft:
   • EPS: $2.95 vs. $2.93 estimate
   • Revenue: $64.7 billion vs. $64.39 billion estimate
   • Azure Cloud Growth: 29% vs. 30.2% estimate
   • Intelligent Cloud Revenue: $28.52 billion vs. $28.72 billion estimate
   • Shares are down -7% in after-hours trading.
2. Starbucks:
   • EPS: $0.93 vs. $0.93 estimate
   • Revenue: $9.11 billion vs. $9.24 billion estimate
   • Shares are up 1.87% in after-hours trading despite missing revenue estimates.
3. Pinterest:
   • EPS: $0.29 vs. $0.28 estimate
   • Revenue: $853.7 million vs. $848.2 million estimate
   • Lower Q3 revenue guidance of $885 million – $900 million vs. $907.7 million expected
   • Shares are down -15.7% in after-hours trading.
4. AMD:
   • EPS: $0.69 vs. $0.68 estimate
   • Revenue: $5.835 billion vs. $5.72 billion estimate
   • Gross Margin: 53.5% vs. 53.8% estimate
   • Shares are up 3.16% in volatile after-hours trading.

Market Closing Levels:

• Dow Jones Industrial Average: +203.40 points (0.50%) at 40,743.32
• S&P 500 Index: -27.10 points (-0.50%) at 5,436.45
• Nasdaq Index: -222.78 points (-1.28%) at 17,147.42
• Russell 2000 Index: +7.80 points (0.35%) at 2,243.14

Looking Ahead:

The Federal Reserve’s rate decision, expected tomorrow at 2 PM ET, will be a crucial event for the market. Additionally, major earnings reports from tech giants and other industry leaders are anticipated to influence market movements significantly.

Stay tuned for further updates as the earnings season progresses and the market reacts to the Fed’s rate decision and other economic indicators.

US JOLTS job openings 8.184M vs 8.000M estimate

• US JOLTS data for June 2024

• Prior month 8.140M revised to 8.23M
• Job openings 8.184M. That is down -941,000 over the year. The job opening rate held at 4.9% in June
  • accommodations and food services +120K
  • state and local government excluding education +94K.
  • Durable goods manufacturing -88K
  • federal government -62K
• Vacancy rate of 4.9% versus 4.9% previously
• Quits rate 2.1% versus 2.1% previously (revised from 2.2%). The quits rate was down 434,000 over the year.
  • Construction -64k
  • state and local government education -55k
• Separations rate 3.2% little change from last month
  • state and local government -51K.
  • Arts entertainment and recreation -39k
• Hires rate 3.6% at 5.3 million. Versus a year ago, the hires are down 554,000

The chart below shows the number of unemployed persons per job opening is at 0.8. Although off lows, it remains near lows.

US July consumer confidence 100.3 vs 99.7 expected

• US July 2024 consumer confidence from The Conference Board

• Prior was 100.4
• Expectations 78.2 vs 72.8 prior
• Present situation 133.6 vs 135.3 prior
• 16.0% of consumers said jobs were “hard to get,” from 15.7%.
• 12 month inflation expectations 5.4% vs 5.4% prior
• On a six-month moving average basis, purchasing plans for homes fell to a 12-year low.

“Confidence increased in July, but not enough to break free of the narrow range that has prevailed over the past two years,” said Dana M. Peterson, Chief Economist at The Conference Board. “Even though consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates, and uncertainty about the future; things that may not improve until next year.”

“Compared to last month, consumers were somewhat less pessimistic about the future. Expectations for future income improved slightly, but consumers remained generally negative about business and employment conditions ahead. Meanwhile, consumers were a bit less positive about current labor and business conditions. Potentially, smaller monthly job additions are weighing on consumers’ assessment of current job availability: while still quite strong, consumers’ assessment of the current labor market situation declined to its lowest level since March 2021.”

Also note some of the softening in discretionary services spending:

Based on a supplemental question, planned spending on services appeared weaker in July 2024 than in July 2023. Consumers said they plan to spend less over the next six months on many discretionary items, including gambling, amusement parks, and personal travel. They also plan to purchase less expensive services—for example, streaming instead of going to the movies. The planned reduction in services spending was across the board, but consumers continued to prioritize non-discretionary expenditures like healthcare and motor vehicle services.

Dallas Fed July services sector revenue index 7.7 vs 1.9 prior

• Data from the Dallas Fed on the services sector

• Prior was +1.9
• Service sector outlook -0.1 vs -4.1 prior
• The employment index -0.2 vs +1.8 prior
• The input price index fell from 24.7 to 21.8 and the wages and benefits index moved down from 16.4 to 13.4
• Retail sales outlook -18.1 vs -18.1 prior

Comments in the report:

Utilities

• It feels like the economy is getting better.

Pipeline transportation

• We expect Permian Basin oil demand to grow 200 million to 300 million barrels per day across 2024. More volume drives our expectations for revenue growth.

Support activities for transportation

• Bad local cotton crop expected due to bad weather.
• Our industry has seen an increase in activity and a hairline increase in selling prices.

Warehousing and storage

• We think some good news on the inflation front provides hope for a soft landing and maybe even a potential rate cut that could spur additional business.

Publishing industries (except internet)

• New advanced, customer-built, do-it-yourself lessons via software capabilities have been offered for mixed reality training with AI assisted metrics. More training opportunities are emerging within the Department of Defense, showing interest in the development of apps. New and more advanced software and licensing are the main reasons for a better outlook, not current economic conditions.
• There is still a high amount of uncertainty about rate cuts and, subsequently, cost of capital. Simultaneously, we are wary that consumer spending will not hold up over the next six month unless something changes or there is more liquidity in the system. The election and the impact that will have on economic policy and rates are also adding to the uncertainty and ambiguity. We are hesitant to forward-invest until the Federal Reserve behavior and economic data suggest the economy has achieved some sort of soft landing.

Credit intermediation and related activities

• The political climate has intensified the feeling of uncertainty, especially after the assassination attempt on former President Trump. Economically, the rural markets are fairly steady but not robust. The most prevalent inflationary pressure across the board is the increase in insurance premiums including health insurance for employee coverage. Auto, homeowners’ coverage and liability insurance premiums have been substantial. We are beginning to hear of lower income families dropping or not renewing coverage of their homes. The interest rate on residential real estate, combined with escrow for insurance and taxes, is increasing debt service coverage for anyone financing a home.

Insurance carriers and related activities

• Business is stable. Insurance increases are moderating somewhat. All eyes are on the November election currently.

Real estate

• The presidential election causes uncertainty. House inventory remains low.
• Interest rates in the form of mortgage rates are the question mark. Lower rates are good for our business.

Rental and leasing services

• We finished 1Q 2024 down 2 percent compared to 1Q 2023. The second quarter was even slower, ending down 9.6 percent. We averaged over 10 percent growth in revenue per year for over 65 years, so that makes us think these quarterly reports are more than just an anomaly. We think the Federal Reserve has finally gotten this economy pulled back; whether they have killed it or not is yet to be seen.

Professional, scientific and technical services

• This is the worst month we have had since the Great Recession. It was even worse than the first month of the pandemic. There are almost no new starts on multi-family or self-storage, and building permits are well down. We have seen increased activity in new prospects, leads, as well as deals. We suspect this is due to a combination of sales and marketing efforts, as well as the slight easing in inflation, which has, in turn, likely improved business and consumer confidence.
• The pace of business activity has slowed down. Operating cost has increased, including the cost of software subscriptions and facility maintenance. Also, there’s been a loss in productivity due to hurricane preparation and summertime vacation. There is a general sense of a loss of momentum and uncertainty.
• Changes in the presidential race have created significant added uncertainty as to the future regulatory climate in the energy sector.
• The real estate market has been stagnated for the past year and a half and will remain so until interest rates stabilize. We are hoping this is the bottom, but until regional banks find a way to begin making loans, the real estate market will not recover. We are at a breaking point if the banks start taking property back and cannot find a way to make loans.
• We are a recruiting company. Our retained search side has been a little busier this month than last month, and we hope to have even more work in August and for the second half of the year. Our outsource recruiting side has been the same this month versus last month, but we hope it will grow.

Administrative and support services

• The bottom has fallen out of the professional-level hiring market. Clients are not hiring or are very slow to make decisions. The cost of money for our clients (and for us) is preventing us from hiring and optimizing production in our businesses. We are living on the edge of recession and truly need the Federal Reserve to take action and start to lower rates. Layoffs are imminent.
• There is still pressure on wages and the ability to hire employees at line-level blue collar work.
• We are concerned about interest rates, but economic activity seems strong.

Ambulatory health care services

• We were dramatically affected by Hurricane Beryl and the power outages this month. Then we were affected by the Crowdstrike update issue as well. We lost significant business due to these factors in July.

Texas Retail Outlook Survey

Amusement, gambling and recreation industries

• Weather has been the real negative factor for our business.

Accommodation

• Hurricane Beryl caused a drastic change in our business, increasing our occupancy and revenue dramatically over the previous month and same time last year. We also experienced some damage that caused us to have some capital expenses, but minimal for the most part.
• In our market, we manage three hotels, one downtown and two on the northside of our city. The two on the northside are performing as expected. Downtown demand has been sluggish. Factors that are contributing to this issue include a lack of group business and construction throughout our downtown area. For the first time in a while, we have had a restaurant on the riverwalk close due to the lack of demand. Based on our advance bookings, this will continue to play out until we get into fall.

Merchant wholesalers, durable goods

• We are seeing a softening in sales to the construction market.

Merchant wholesalers, nondurable goods

• The best words to describe retail are stagnant or grinding day to day.

Motor vehicle and parts dealers

• We have a challenging business model. We are seeing margin compression. Inventories are abnormally high and the cost-to-carry is severely impacting profitability. Affordability is a major issue and ongoing concern.
• Demand for new and used vehicles continues to be strong. Inventory growth has slowed down and is starting to plateau.

Electronics and appliance stores

• Retail is struggling.

Building material and garden equipment and supplies dealers

• The lumber market is weak, and sales seem to be flat from month to month, with no real signs of improving.
• There is very little activity. The combination of steel prices decreasing and the promise of lower interest rates sometime in the future is causing everyone to delay.

US May CaseShiller 20-city house price index +6.8% y/y vs +6.7% expected

• US house price data from CaseShiller

• Prior was +7.2%
• Prices m/m +0.3% vs +0.4% expected

National house price data from the FHFA:

• Prices up 5.7% y/y vs 6.3% prior
• Prices m/m 0.0% vs +0.2% prior

4 opportunities for the Federal Reserve to signal a rate cut – September a hot prospect

• 4 upcoming events likely to impact market prices

Snippet summary from BMO on opportunities ahead for the Federal Reserve to signal a September rate cut:

• the verdict is still out on the amount of signalling Powell is willing to provide on Wednesday
• there is enough uncertainty that we suspect there will be meaningful and tangible price action – most likely on the constructive side
• even if Powell stops shy of convincing the market that the Committee has pencilled in a cut for September, the Fed also has the FOMC Minutes release to convey the message of ‘cuts are coming’.
• Let us not forget the Aug 22-24 Jackson Hole conference about the effectiveness of policy and its implementation – an especially topical subject at the moment. It has also been a venue that has been used to offer a fuller explanation of a shifting policy outlook – the timing this year suggests this could once again be the case.

Deutsche Bank on the Fed – “market has jumped the gun on a dovish pivot”

• DB accept there will be easing, because they expect a recession

Via a note from Deutsche Bank, urging everyone to chill out on the level of Federal Reserve easing they expect:

• As we approach this week’s FOMC (DB preview here), optimism has again been building that we’re about to embark on a notable Fed easing cycle.
• For the 8th time in this rate cycle, the market has jumped the gun on a dovish pivot and we eventually see this pared back.
• Over the next 18 months to January 2026, markets are now pricing in exactly 175bps of cuts – which is the most since early March. … such a degree of easing over an 18-month period has only previously been associated with recessions, apart from during the mid-1980s when real rates were still extremely high given the legacy from the late 1970s/early 1980 Volcker tight policy cycle.
• DB expect 125bps to the market’s 175bps over the next 18 months. The level of easing only happens because we eventually see a recession.
• DB economists see three rate cuts before year-end but then a pause until September 2025, and a final two cuts in December 2025 and March 2026.

Commodities

Gold: Weaker demand for jewelry in China, but stronger demand for bars and coins – Commerzbank

Demand for Gold in China weakened in the first half of the year, Commerzbank’s commodity analyst Carsten Fritsch notes.

Two opposing trends in Gold demand

“According to the China Gold Association, demand for Gold in China amounted to 524 tons, 5.6% lower than in the same period of the previous year. There were two opposing trends. Demand for jewelry fell by just under 27% to 270 tons. According to the CGA, this was due to the sharp rise in prices, which also led to a significant decline in jewelry processing.”

“According to Bloomberg calculations based on CGA data, demand for jewelry even fell by more than 50% in the second quarter. This contrasted with a 46% increase in demand for bars and coins to 214 tons. This was due to stronger demand from Chinese households for Gold as a safe haven. The problems on the Chinese property market and falling interest rates are also likely to have played a role.”

“Accordingly, jewelry demand and demand for bars and coins have clearly converged in terms of volume. The share of jewelry demand in total demand fell to 51.6%, while bars and coins accounted for 40.8%. This development is consistent with the figures in the latest report of the World Gold Council.”

More LNG gas from the USA, but risks for the European gas market remain – Commerzbank

European gas price has risen in recent days, but the situation in the market is likely to remain relaxed in the short term, Commerzbank’s commodity analyst Carsten Fritsch notes.

Demand for natural gas in Europe remains weak

“Although the European gas price has risen in recent days due to rising temperatures and the associated higher demand for air conditioning, the situation is likely to remain relaxed in the short term. This is because gas storage facilities are already 84 percent full, which is a good 7.5 percentage points more than usual at this time of year.”

“At the same time, according to Reuters, the second-largest US liquefaction terminal Freeport, which had to be closed on 7 July due to Hurricane Beryl, has been operating at full capacity again since Sunday. In addition, according to the IEA’s quarterly report on the gas market, the US, Europe’s largest LNG supplier, will bring further export capacities into operation in the second half of the year.”

“Demand in Europe remains weak. However, even if storage levels are likely to be well filled by the start of the withdrawal phase against this backdrop, the risks should not be ignored: On the one hand, according to the think tank Bruegel, the EU still sourced around 11 percent of its gas imports from Russia in the first half of the year. On the other hand, China’s demand for LNG has recently increased significantly.”

Copper: Demand concerns outweigh disappointing production and potential shortfalls – Commerzbank

At the end of last week, the world’s largest Copper mine producer based in Chile reported an 8.4% year-on-year decline in Copper output for the first half of the year, Commerzbank’s commodity analyst Barbara Lambrecht notes.

Demand concerns weigh on Copper despite low production

“Although the company was optimistic that production would recover in the second half of the year, the group is danger of missing the slight increase in production forecast for the year as a whole. According to Bloomberg Intelligence, it could thus lose its first place to the second-largest producer to date.”

“But new production losses are also looming here: The union has called on workers at the world’s largest Copper mine, Escondida, that has a capacity of 1.35 million tons of Copper ore, to reject the employers’ offer and go on strike. If the workers do reject the offer, there does not necessarily have to be an immediate strike, as both parties have the right to ask the government for mediation.”

“The fact that the Copper price came under renewed pressure despite disappointing production reports and the threat of production losses is likely due to ongoing demand concerns. The sentiment indicators from China’s manufacturing sector due in the middle of the week are also unlikely to provide a tailwind.”

EU News

Eurozone July final consumer confidence -13.0 vs -13.0 prelim

• Latest data released by the European Commission – 30 July 2024

• Prior -14.0
• Economic confidence 95.8 vs 95.4 expected
• Prior 95.9
• Industrial confidence -10.5 vs -10.7 expected
• Prior -10.1; revised to -10.2
• Services confidence 4.8 vs 5.5 expected
• Prior 6.5; revised to 6.2

Eurozone Q2 preliminary GDP 0.3% vs. 0.2% Q/Q expected

• Latest data released by Eurostat – 30 July 2024

• Eurozone Flash Q2 GDP Y/Y 0.6% vs. 0.5% expected and 0.4% prior.
• Eurozone Flash Q2 GDP Q/Q 0.3% vs. 0.2% expected and 0.3% prior.

Among the Member States for which data are available for the second quarter of 2024, Ireland (+1.2%) recorded the highest increase compared to the previous quarter, followed by Lithuania (+0.9%) and Spain (+0.8%). The highest declines were recorded in Latvia (-1.1%), Sweden (-0.8%) and Hungary (-0.2%). The year on year growth rates were positive for eight countries and negative for three.

Germany Q2 preliminary GDP -0.1% vs. 0.1% Q/Q expected

• Latest data released by Destatis – 30 July 2024

• Germany Flash Q2 GDP Y/Y -0.1% vs. 0.0% expected and -0.2% prior
• Germany Flash Q2 GDP Q/Q -0.1% vs. 0.1% expected and 0.2% prior

Bavaria July CPI +2.5% vs +2.7% y/y prior

• Latest data released by Destatis – 30 July 2024

The other state readings released around the same time:

• Brandenburg CPI +2.6% vs +2.6% y/y prior
• Hesse CPI +1.8% vs +1.8% y/y prior
• Saxony CPI +3.1% vs +2.8% y/y prior
• North Rhine Westphalia CPI +2.3% vs +2.2% y/y prior
• Baden Wuerttemberg CPI +2.1% vs +1.9% y/y prior

France Q2 preliminary GDP +0.3% vs +0.2% q/q expected

• Latest data released by INSEE – 30 July 2024
• Prior +0.2%; revised to +0.3%

The French economy continues to hold up in Q2, keeping a more resilient tone. Here is the breakdown:

Italy Q2 preliminary GDP 0.2% vs 0.2% Q/Q expected

• Latest data released by Istat – 30 July 2024

• Italy Flash Q2 GDP Y/Y 0.9% vs. 0.8% expected and 0.7% prior
• Italy Flash Q2 GDP Q/Q 0.2% vs. 0.2% expected and 0.3% prior

Spain Q2 preliminary GDP 0.8% vs 0.5% Q/Q expected

• Latest data released by INE – 30 July 2024

• Spain Flash Q2 GDP Y/Y 2.9% vs. 2.5% expected and 2.5% prior
• Spain Flash Q2 GDP Q/Q 0.8% vs. 0.5% expected and 0.8% prior

Spain July preliminary CPI +2.8% vs +3.0% y/y expected

• Latest data released by INE – 30 July 2024

• Prior +3.4%
• HICP +2.9% vs +3.2% y/y expected
• Prior +3.6%

The readings are lower than estimated as Spanish headline inflation continues to swing around mostly in the past half-year. As for core annual inflation, it is seen easing further to 2.8% – down from 3.0% in June

Switzerland July KOF leading indicator index 101.0 vs 102.4 expected

• Latest data released by KOF – 30 July 2024
• Prior 102.7

Asia-Pacific-World News

China’s Politburo holds meeting to set out economic priorities for H2 2024

• The top leadership in China announces more high-level focus on the economy

• Reaffirms prudent monetary policy approach
• Chinese economy diverges with many risks in key areas
• Still faces insufficient domestic demand
• Sees increasing negative external impact
• To promote stable development of property market
• Need to keep stepping up macroeconomic policies
• Reiterates proactive fiscal policy
• Focus of economic policies to shift more to consumption

HSBC remains bullish on Asian equites

• Overweight view on Japan, India, and South Korea. Neutral on Hong Kong and mainland China equities.

HSBC’s Global Private Banking chief investment officer has expressed a positive view on most Asian equities for the balance of the year.

Says that Asia remains the most important growth engine of the global economy, citing both GDP and earnings growth for Asia ex-Japan (for 2024):

• 4.6% and 23% respectiveely

Overweight:

• equities in Japan, India, South Korea

Neutral:

• Hong Kong & mainland China

China further obscuring information about overseas funds going in & out of its stock market

• Investors will lose the ability to calculate net flows at the end of each trading day

This comes via a Bloomberg report (gated):

• Beijing says it will stop publishing daily flows data.
• The decision follows a move in May to end data on intraday flows through trading links with Hong Kong.
• Investors will lose the ability to calculate net flows at the end of each trading day from August 18.
• The only daily data published by the exchanges from that date onward will be the total turnover and the number of trades made in stocks and exchange-traded funds via the Hong Kong links, as well as the turnover of the 10 most active securities.

PBOC sets USD/ CNY central rate at 7.1364 (vs. estimate at 7.2586)

• PBOC CNY reference rate setting for the trading session ahead

In open market operations:

• PBOC injects 216bn via 7-day RR, sets rate at 1.7%
• 267bn yuan mature today
• net 51bn yuan drain today

Australian weekly consumer confidence lower @ 83.1

• Prior week was its best in 6 months at 84.4

ANZ-Roy Morgan Australian Consumer Confidence Index

ANZ comment on the result:

• The fact that consumer confidence held onto most of last week’s sizeable 5.9pt gain suggests households may be seeing the benefits of the Stage 3 tax cut

Australia data – June Building approvals -6.5% m/m (expected -1.5%)

• A big miss

Australian building approvals for June 2024 come in at -6.5% m/m

• expected -1.5%, prior +5.7%

For the y/y, comes in at -3.7%

Bank of Japan leak says 0.25% is under consideration

• This time it’s Jiji

The earlier leak was from NHK and this time it’s from Jiji. The content is the same: That the BOJ is considering a 15 bps hike rather than the 10 bps the market was mulling over.

The decision is due in about 12 hours.

Japan’s new FX diplomat: Only natural solution to yen weakness is to improve economy

• Comments from Mimura

• Will act under internationally agreed commitments on foreign exchange
• It has been internationally agreed that measures including intervention are allowed when necessary
• A change in Vice Finance Minister for international affairs doesn’t mean a change in basic policy
• Only and natural solution to yen’s weakness is to improve economic competitiveness and boost growth potential

MUFG worry that lack of BoJ guidance on this week’s meeting means no rate hike until Dec

• No hike means weaker yen again

MUFG are/were expecting a 15bp rate hike from the Bank of Japan this week.

But, in a note, they say that the lack of guidance from officials at the Bank is casting doubt on that call.

MUFG cite market expectations for a rate hike, and say that if a hike is not forthcoming the yen could fall again.

More ominously, for those looking for higher rates in Japan, MUFG add that if there is no rate hike this week then it could be December until there is another opportunity to hike, saying that the timing of any future rate rise would be complicated by

• September’s Japanese Liberal Democratic Party leadership election
• and November’s U.S. presidential election
• “As a result, the BOJ may not be in a position to hike again until December if they skip this week.”

Japan data – June unemployment rate 2.5% (expected 2.6%)

• Labour market data from Japan

Japan data for June 2024

Unemployment rate 2.5%

• expected 2.6%, prior 2.6%

Job-To-Applicant Ratio 1.23

• vs. expected 1.24, prior 1.24

Japan’s Hayashi says Bank of Japan and government to closely coordinate

Japan chief cabinet secretary Hayashi:

• Monetary policy specifics are up to the BOJ to decide
• Expect the BOJ to closely coordinate with govt, conduct appropriate monetary policy toward inflation target

5 reasons the Bank of Japan should be wary of hiking rates this week

• Market are pricing around a 70% chance of a hike

Via Scotia, preview comments on what to expect from the Bank of Japan.

Out of 46 forecasters within consensus, only 9 expect a hike.

Markets are assigning a higher probability to a 10bps hike that has been floating around 70% odds with about 7bps priced.

The case for hiking rests entirely upon gauging the degree of the BoJ’s confidence that it is durably on the path toward achieving 2% inflation over the medium-term horizon while getting further distance away from the distorting near-zero policy rate of 10bps.

I’m not sure they should have such confidence.

• Tokyo core CPI just reversed prior progress toward firmer readings which sends a cautious signal
• The yen has sharply appreciated in a very short period of time
• There is little evidence that Japan is escaping the grips of falling real wages
• While the annual Shunto rounds of negotiations with unions has driven a sharp acceleration of wage growth over the past two years, this has a concentrated effect on less than 20% of Japanese workers and the evidence this is spilling over into lifting wages elsewhere is very limited.
• Oil prices have ebbed somewhat of late but more importantly have been broadly trended sideways through much of the year; since Japan imports so much, the pass through to inflation risk has ebbed

Singapore’s Temasek plans to invest $30bn in the US over next 5 years

• Temasek says its cautious of putting money into China

Temasek is a global investment company headquartered in Singapore.

Newswires splashing the headlines on the firm’s investment intentions:

• Singapore’s state-owned Temasek plans to invest $30 billion in the US over the next five years
• The firm remains cautious on putting money into China

Cryptocurrency News

Optimism Generates $45 Million in Revenue, Targets Double-Digit Gains

Optimism, a leading Ethereum scaling solution, has reported nearly $45 million in revenue, as it eyes substantial price gains. The Layer 2 chain has surpassed $720 million in total value locked (TVL) within its ecosystem, demonstrating strong market trust and engagement.

Key Highlights:

1. Revenue Generation:
   • Optimism has collected 14,300 Ether, approximately $45 million, from sequencer fees—fees generated when transactions are executed on the chain.
   • This revenue highlights the network’s growing adoption and transaction activity.
2. Total Value Locked (TVL):
   • According to DeFiLlama, the total value of assets locked in the Optimism ecosystem crossed $720.50 million early on Tuesday.
   • This significant TVL indicates strong user confidence and the platform’s robust performance.
3. Market Performance:
   • Optimism (OP) saw a 2% gain early on Tuesday, trading at $1.638.
   • The token is targeting a rally to $2, which would represent a 22.6% increase from its current price.
   • OP faces resistance at $1.815 and $1.822, a multi-month resistance level. However, it could find support in the Fair Value Gap (FVG) between $1.532 and $1.581.
4. Community and Ecosystem Growth:
   • Ryan Wyatt of the Optimism Collective noted the chain’s revenue from transactions, reinforcing its growing utility and adoption.
   • Optimism’s ecosystem includes 26 Optimism Stack Chains that share their revenue, further enhancing the network’s robustness and appeal.

Outlook:

Optimism’s substantial revenue generation and increasing TVL position it well for continued growth. As the platform continues to scale and attract more users, OP’s price could see significant gains, potentially reaching the $2 target. The ongoing developments and strong community support underpin Optimism’s promising future in the Layer 2 Ethereum scaling space.

Ripple Poised for Legal Victory as SEC Retracts Security Status Request for Solana, Cardano, and MATIC

Ripple’s lawsuit with the SEC may conclude this week, as the regulatory body withdraws its request to classify Solana, Cardano, and MATIC as securities. This move has fueled optimism among XRP traders, pushing the altcoin to nearly $0.62 early on Tuesday.

Key Developments:

1. SEC’s Retraction:
   • The SEC has retracted its request to label Solana (SOL), Cardano (ADA), and Polygon (MATIC) as securities.
   • This decision is seen as a positive sign for Ripple, bolstering hopes for a favorable outcome in their ongoing lawsuit.
2. XRP Price Action:
   • XRP has surged by almost 3%, reaching $0.6183, trading above the crucial psychological level of $0.60.
   • The altcoin has gained legal clarity as a non-security in secondary market transactions, though institutional sales remain a gray area.
3. Lawsuit Status:
   • Pro-crypto attorney Fred Rispoli has predicted that the SEC vs. Ripple lawsuit will conclude by the end of July 2024.
   • Judge Analisa Torres, who previously declared XRP a non-security in July 2023, is expected to rule on potential fines or settlements for Ripple’s alleged securities law violations.
   • The lawsuit could influence the SEC’s stance on other crypto assets, depending on the final ruling.

Market Sentiment:

• Positive Market Reaction:
  • The SEC’s move has instilled hope among XRP traders, anticipating a positive resolution in the lawsuit.
  • Ripple’s partial victory in July 2023, where XRP was declared a non-security, has already set a precedent.
• Future Implications:
  • The outcome of the lawsuit could set a significant precedent for other crypto assets and their regulatory status in the US.
  • The resolution of the Ripple case could potentially lead to broader regulatory clarity in the crypto market.

Conclusion:

As the lawsuit between Ripple and the SEC approaches its anticipated conclusion, the withdrawal of the SEC’s request to classify Solana, Cardano, and MATIC as securities has buoyed market sentiment. XRP continues to trade above key support levels, with traders optimistic about a favorable outcome. Judge Torres’s final ruling will be crucial in determining Ripple’s legal standing and could have far-reaching implications for the crypto industry.

Fake news headline – Elon Musk says he doesn’t like crypto all that much

• Musk did not say this.

Elon Musk took part in an ‘X Takeover’ podcast hosted by the Tesla Owners Silicon Valley account.

• was held on Musk’s X social media platform
• took place on Monday

You may be seeing headlines (and I quote):

• Elon Musk says he doesn’t like crypto all that much – not even Bitcoin

Musk did not say that.

What he said was:

• “I’m not going to be promoting crypto—at most, in a joking way. If you see me pumping crypto, it’s not me. I do think there’s merit in Bitcoin and maybe some other cryptos, and I’ve sort of got a soft spot for Dogecoin because I like dogs and memes.”

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/

https://t.me/Market_Moving_News