North American News
US Equities End Mixed After Volatile Session
Market Summary:
- S&P 500: Flat
- Nasdaq Composite: -0.2%
- Russell 2000: +0.7%
- Dow Jones Industrial Average: +0.6%
Despite a choppy trading day, major North American indices closed with minimal changes. Initially, there was a negative sentiment following Nvidia’s earnings report, but the market managed to recover from early losses. A strong rally in the morning gave way to heavy selling in the afternoon, leaving the Nasdaq slightly down, while the Russell 2000 and Dow Jones ended the day in the green.
Dell Beats Earnings Expectations, Shares Surge in After-Hours Trading
Dell Technologies Earnings Highlights:
- EPS: $1.89 vs. $1.71 expected
- Revenues: $25.03 billion vs. $24.14 billion expected
- Shares: Closed at $110.74, up $7.10 or 6.41% to $117.85 in after-hours trading.
Dell reported stronger-than-expected earnings and revenues, leading to a significant after-hours share price increase. The stock, which found support at its 200-day moving average during the session, is now trading near $118. Moving above the 100-day moving average at $127.51 could signal further bullish momentum.
Other After-Hours Earnings:
- Ulta Beauty Inc (ULTA) Q2 2024:
- EPS: $5.30 vs. $5.47 expected (MISS)
- Revenue: $2.6 billion vs. $2.61 billion expected (MISS)
- Lululemon Athletica Inc (LULU) Q2 2024:
- EPS: $3.15 vs. $2.93 expected (BEAT)
- Revenue: $2.37 billion vs. $2.41 billion expected (MISS)
- Marvell Technology Inc (MRVL) Q2 2024:
- Adj. EPS: $0.30 vs. $0.29 expected (BEAT)
- Revenue: $1.272 billion vs. $1.25 billion expected (BEAT)
- Autodesk Inc (ADSK) Q2 2024:
- EPS: $2.15 vs. $2.00 expected (BEAT)
- Revenue: $1.50 billion vs. $1.48 billion expected (BEAT)
US sells seven-year notes at 3.770% vs 3.761% WI
- Results of the $44 billion sale of seven-year notes
- Bid-to-cover ratio 2.50
- High yield 3.770% vs 3.761% pre-sale WI
- Awards 89.55% of bids at high
- Primary dealers take 13.72%
- Direct 11.19%
- Indirect 75.09%
US initial jobless claims 231K vs 232K expected
- Weekly initial jobless claims for the week ending August 24, 2024
- Initial claims 231K vs 232K expected and 232K prior (revised to 233K).
- Continuing claims 1868K vs 1870K expected and 1863K prior (revised to 1855K).
- The continuing claims data pertains to the NFP survey week.
US Q2 GDP second estimate +3.0% vs +2.8% expected
- The second look at Q2 GDP
- Advance Q2 reading was +2.8% annualized
- Final Q1 reading was +1.4% annualized
Details:
- Consumer spending +2.9% vs +2.0% advance
- Consumer spending on durables +4.9%
- GDP final sales 2.2% vs +2.0% advance
- GDP deflator +2.5% vs +2.3% advance
- Core PCE +2.8% vs +2.9% advance
- Business investment +4.6% vs +5.2% advance
- PCE services inflation excluding energy and housing 2.3% vs 3.3% advance
- Corporate profits prelim +1.7% vs -2.7% prior
Contributors and subtractors to the 3.0% growth:
- Consumption: +1.95% (vs +1.57% advance, last quarter +0.98%)
- Government: +0.46% (vs +0.53% advance, last quarter +0.31%)
- Net International Trade: -0.77% (vs -0.72% advance, last quarter -0.65%)
- Inventories: +0.78% (vs +0.82% advance, last quarter -0.42%)
US July pending home sales -5.5% vs +0.4% expected
- US pending home sales data from NAR
- Prior was +4.8%
- Index 70.2 vs 74.3 prior (lowest ever)
According to NAR Chief Economist Lawrence Yun, “A sales recovery did not occur in midsummer. The positive impact of job growth and higher inventory could not overcome affordability challenges and some degree of wait-and-see related to the upcoming U.S. presidential election.”
US preliminary wholesale inventories for July 0.3% versus 0.2% estimate
- US wholesale inventories for July 2024
- Prior month was 0.2% (revised to 0.1%).
- Wholesale inventories advanced for July 0.3% versus 0.2% estimate.
- Retail inventories ex auto 0.5% versus 0.2% prior month (revised to 0.3%).
US July advance goods trade balance -102.66 billion vs -96.56 billion prior
- US July advance 2024 trade data
- Prior was -96.56 billion
- Exports flat at $172.9 billion
- Imports rise $6.1 billion to $275.6 billion
- Capital goods exports jump 3.8% m/m
- Consumer goods imports edge up 0.9% m/m
Fed’s Barkin: Inflation is down but we’re not there yet
- Barkin comment to a local radio station
- We’re making progress but we’re not there yet
Fed’s Bostick: On inflation, there is still distance to go
Atlanta Fed Pres. Bostick is speaking and says:
- on inflation, there is still distance to go.
- Labor market still quite strong by historical standards.
- We cannot wait until inflation is too percent to move away from restrictive stance.
- Inflation has come down faster than expected, unemployment has risen farther than thoughts.
- This means we should pull forward rate cut to third-quarter.
- It would not be good to cut rates only to have to raise them again.
- They should wait for more data before cutting rates
US sees limited scope for nuclear talks with China
- More geopolitics between US and China
- Exclusive-U.S. sees a ‘limited opportunity’ to restart nuclear policy dialogue with China -U.S. official.
- Exclusive-U.S. seeks arms talks with China focused on nuclear doctrine, strategic warning, risk reduction -U.S. official.
- Exclusive-Asked about missile deployment, U.S. official says any decision to deploy new capabilities to support Philippines will be informed by actions they see from China.
- Exclusive-U.S. officials have privately told China that interference in U.S. elections ‘would be intolerable’ -U.S. official.
- Exclusive-On China tariffs, U.S. official says they expect to ‘follow through on our intentions’
Canada Q2 current account -8.48 billion vs -5.85 billion
- Canadian second quarter current account data
- Prior was -5.37 billion
- Goods deficit increased to C$2.2 billion from near balance in Q1
- Services deficit narrowed to C$3.2 billion from C$4.3 billion
- Investment income balance swung to C$0.6 billion deficit from C$1.3 billion surplus
Key Points:
- Imports rose 2.0% to C$196.1 billion, led by motor vehicles and parts
- Exports edged up 0.9% to C$139.9 billion on higher aircraft shipments
- Foreign investment in Canadian securities surged to C$67.3 billion, highest since Q1 2022
- Foreign direct investment in Canada hit C$38.5 billion, strongest since 2007
Commodities
Gold Surges
Market Update:
- Gold Price: Up $25 on the day, trading around $2,525.
Gold prices have experienced a notable turnaround, climbing to the highs of the day after earlier trading in negative territory. Following a brief decline to around $2,490 due to strong USD buying on positive GDP data, gold has regained its footing and is now approaching record levels.
Key Market Movers:
- Intraday Turnaround: Gold fell by approximately $15 earlier in the session but has since rebounded, with bids emerging just before $2,500. The price is now nearing an intraday record of $2,531 and could potentially set a new closing record.
- USD Impact: The initial drop was driven by a round of USD buying, bolstered by robust GDP figures. However, the subsequent recovery underscores gold’s resilience and its ability to bounce back from negative pressures.
Daily Market Movers:
- Record Prospects: With gold trading near its daily highs, the metal is on track for a possible record close. The intraday record of $2,531 is within reach if the current momentum continues.
- Market Sentiment: The significant rebound highlights strong support levels and positive sentiment around gold, despite earlier pressures from a stronger USD.
Gold’s impressive recovery and current position near record levels reflect its enduring appeal and the potential for further gains as market conditions evolve.
Aluminum prices rally seem to have exhausted – TDS
Aluminum prices are struggling to rally further following last week’s signs of CTA buying exhaustion, Senior Commodity Strategist Daniel Ghali note.
Demand sentiment starts to decline again
“Under the hood, demand sentiment embedded within the cross-section of commodities prices has started to decline once again, following a brief recovery off the lows marked by the recent turmoil in August.”
“Supply risk premia has been an insulating force for Aluminum and certainly supported the recovery in prices, reflecting risks to European smelter output associated with higher energy prices. But our gauge of supply risk premia also points to the first signs of notable pressure since Ukraine’s incursion in Russia.”
“While CTA flows are likely to remain muted over the next week barring a large downtape in prices, continued pressure from demand sentiment or easing supply risk premia could eventually catalyze renewed selling activity in a big downtape. Barring this catalyst, however, the balance of risks suggests LME3m prices may remain pinned to $2500/t in the near-term.”
Iraq plans to cut oil output to 3.85-3.9 million barrels per day in September – Reuters report
- Iraq cancelled a spot cargo of 1 million barrels in August to reduce exports
Iraq produced around 4.25 million barrels per day in July but there has been significant variance in the past year, though rarely as low as 3.85-3.9m bpd.
EU News
European equity close: Strong gains across the board
- Closing changes for the main European equity markets
- Stoxx 600 +0.75%
- German DAX +0.6%
- Francis CAC +0.8%
- UK’s FTSE 100 +0.5%
- Spain’s IBEX +0.25%
- Italy’s FTSE MIB +0.8%
Eurozone economic sentiment 96.6 vs 95.8 expected
- Data is for August 2024
- Eurozone economic sentiment: 96 vs 95.8 expected
- Eurozone industrial sentiment: vs -10.6 expected
- Eurozone services sentiment: vs 5.2 expected
- Eurozone consumer confidence final: vs -13.4 expected
German Bayern YY 2.1% vs 2.5% prior
- German statewide CPI data for August 2024
- Germany Sachsen state CPI YY: vs 3.1% expected
- Germany Bayern state CPI YY: 2.1% vs 2.5% expected
- Germany Brandenburg state CPI YY: vs 2.6% expected
- German Hessen state CPI YY: vs 1.8% expected
- German Baden-Wuerttemberg state CPI MYY: vs 2.1% expected
- German Nordrhine state CPI YY: vs 2.3% expected
Spanish flash HICP YY 2.4% vs 2.5% expected
- Data for August 2024
- Spanish HICP flash YY: 2.4vs 2.5% expected
- Spanish CPI YY flash: vs 2.4% expected
- Spanish HICP flash MM: vs 0.2% expected
- Spanish CPI MM flash: vs 0.1% expected
Swedish GDP YY 0.5% vs 0.0% expected
- Final GDP data for Q2
- Swedish Final GDP YY: 0.5% vs 0.0% expected
- Swedish Final GDP QQ: -0.3% vs -0.8% expected
- Swedish Retail Sales MM: 0.5% vs -0.3% prior
- Swedish Retail Sales YY: -0.5% vs -0.1% prior
ECB’s Nagel: Timely return to price stability cannot be taken for granted
- Comments from Nagel
- There is risk that a somewhat stronger recovery could delay a return to inflation target
- While our 2% target is in sight, we have not reached it
- A timely return to price stability cannot be taken for granted
SNB’s Jordan: Price stability is a crucial precondition for growth and prosperity
- Comments from Jordan
- The mandate of the SNB is to maintain price stability — a crucial precondition for society and a good functioning economy
- Price stability is a crucial precondition for prosperity
- The central bank reacted early to the inflation rise and this kept inflation under control
Remy Cointreau Pernod Ricard shares surge 8% after China skips brandy tariffs
- Follow up on the earlier anti-dumping subsidy news
Shares in Remy Cointreau and Pernod Ricard both up about 8%, after China’s Commerce Ministry says will not impose provisional anti-dumping subsidy on brandy imported from EU.
Riksbank’s Bunge says economy is in a mild recession
- Riksbank comments
- Riksbank’s Bunge: Inflation is in the process of stabilising at the target and the Swedish economy is in a mild recession.
- Riksbank’s Bunge: I foresee two or three further cuts this year.
- Riksbank’s Bunge: However, monetary policy should still be characterised by a gradual adjustment.
- Riksbank’s Bunge: This creates predictability and gives us the opportunity to manage a different development in the economy than expected, if this should prove necessary.
- Riksbank’s Bunge: We need to ensure that all sectors, not least property companies and households, are resilient to withstand a potential situation where interest rates rise again at some point
Asia-Pacific-World News
China’s Xi says committed to stable relationship with US based on win-win cooperation
- China’s XI comments in meeting with National Security Adviser Sullivan
- China’s Xi meets with U.S. National Security Adviser Sullivan in Beijing.
- China’s Xi, in meeting with U.S. National Security Adviser Sullivan: In this changing and turbulent world countries need solidarity and coordination, not exclusion or regress.
- China’s Xi, in meeting with U.S. National Security Adviser Sullivan: China is committed to a stable relationship based on win-win cooperation.
- China’s Xi, in meeting with U.S. National Security Adviser Sullivan: In my statements on various occasions and my meetings with successive U.S. presidents, I have always expressed this view.
- China’s Xi, in meeting with U.S. National Security Adviser Sullivan: We hope that the US will work in the same direction as China.
- China’s Xi, in meeting with U.S. National Security Adviser Sullivan: Hope U.S. will see Chinese development as ‘possibility not a challenge’ and work to get along.
- Beijing- U.S. National Security Adviser Sullivan, in meeting with China’s Xi: President Biden is committed to managing this relationship and to make sure competition does not lead to conflict.
- Beijing- U.S. National Security Adviser Sullivan, in meeting with China’s Xi: We are committed to maintaining high-level diplomacy.
- Beijing- U.S. National Security Adviser Sullivan, in meeting with China’s Xi: Biden looks forward to engaging with you in the coming weeks.
- China’s Xi in meeting with US National Security Advisor: Hope U.S. will move in the same direction as China, look at China and its development in a positive and rational manner.
- China’s Xi in meeting with US National Security Advisor: As two major countries, China and the US should be responsible to history, people, and the world.
- China’s Xi in meeting with US National Security Advisor: China and US should become a source of stability for world peace and a propeller for common development.
- China’s Xi in meeting with US National Security Advisor: Hope China and U.S. can regard each other’s development as an opportunity rather than a challenge.
- China’s Xi in meeting with US National Security Advisor: China’s commitment to the stable, sound, and sustainable development of China-US relations remains unchanged
China’s Commerce Ministry opts against anti-dumping measures on EU brandy
- Geopolitics
China’s Commerce Ministry: Will not impose provisional anti-dumping subsidy on brandy imported from EU.
PBOC sets USDCNY midpoint at 7.1299 versus expectations of 7.1297
- Previous came in at 7.1216
Apple orders over 10% more iPhones versus last year
- According to Nikkei cited by Bloomberg
According to Nikkei, Apple orders over 10% more iPhones versus last year. The phones this year will be AI equipped, but not ready until later in the year.
Apple told suppliers to prepare for 88 – 90 million iPhones versus approximately 80 million. According to sources, the expectations is for four new iPhones, two, or possibly three, new Apple Watches and perhaps Air Pods fourth-generation. The product launch will take place on September 9 in time for the holiday buying season.
Australia capital expenditures for Q2 -2.2% versus 1.0% expected
- Australia’s capital expenditures for Q2 2024
- Prior quarter 1.0%
- Australia’s capital expenditures for Q2 -2.2% versus 1.0% estimate. That equaled the largest decline since a similar fall in Q3 2021.
- Building capital expenditures -3.8 versus -0.9% last quarter. The decline was was the worst since Q2 2020.
- Plant/machinery capital expenditures -0.5% versus +3.3% last quarter
Australia’s S&P/ASX 200 index opened down -0.28% at 8048.50
- Early trading in the Australia S&P/ASX200
Australia’s S&P/ASX 200 and exit opening to -0.28% at 8048.50.
ANZ business outlook for August 50.6 versus 27.1 last month. 10 year high.
- ANZ business outlook for August 2024
- Prior month 27.1
- Own activity 37.1 versus 16.3 last month. 7-year high
- Experienced own activity rose 1 point to -21, remaining weak.
- Confidence and activity expectations were high even before the Reserve Bank’s OCR cut.
- Pricing intentions increased 3 points to 41% of firms planning price hikes in the next three months.
- Planned price increase rose from 1.4% to 1.6%.
- Inflation expectations fell from 3.2% to 2.9%, the first sub-3% reading since July 2021.
This is a strong number. Below are the different components.
Japan consumer confidence index 36.7 vs 36.7 prior
- Data for August 2024
Japan consumer confidence index: 36.7 vs 36.7 prior
Cryptocurrency News
XRP Holds Above $0.57 Despite $8 Million in Profit-Taking
Market Update:
- XRP Price: Steady above $0.57, up nearly 1% on Thursday.
Ripple (XRP) remains resilient, maintaining support above $0.57 even as traders have realized $8.36 million in profits on Thursday.
Key Market Movers:
- Profit-Taking: Ripple traders have taken substantial profits, totaling $8.36 million on Thursday, according to Santiment data. Profit-taking often adds selling pressure, potentially leading to price declines. Despite this, XRP has shown stability above key support levels.
- Active Addresses: Ripple’s active addresses have surged by nearly 30% since August 25, reaching close to 20,000. This increase typically signals heightened interest and potential for price gains. However, the impact of concurrent profit-taking complicates the outlook.
Daily Market Movers:
- Profit-Taking Impact: While profit-taking usually exerts downward pressure on the asset, XRP’s current stability suggests strong support levels. Continued large-scale profit-taking could influence XRP’s price direction.
- On-Chain Metrics: Mixed signals from on-chain data highlight the uncertainty in XRP’s short-term trajectory. Increased active addresses indicate growing network engagement, but profit-taking presents a counteracting force.
XRP’s ability to hold above $0.57 amid significant profit-taking reflects its current strength, but ongoing market dynamics will be crucial in determining its next moves.
Bitcoin Struggles to Maintain Gains, Slips Below $60,000
Market Update:
- Bitcoin Price: Down for the fourth consecutive day, trading below $60,000.
Bitcoin failed to sustain its gains above $60,000, with the price trending lower as broader market sentiment shifts. Despite an initial rebound that nearly offset Wednesday’s decline, Bitcoin has reversed course, influenced by overall market weakness and a downturn in Nvidia shares following their earnings report.
Key Market Movers:
- Market Sentiment: Bitcoin’s early positive momentum has unraveled, mirroring the broader market’s decline. Nvidia’s sharp drop of over 6% post-earnings has contributed to the negative sentiment affecting Bitcoin.
- Technical Levels: Bitcoin had shown signs of recovery last week, potentially reversing July-August losses. However, the recent decline threatens to invalidate the series of higher lows established from the August bottom. A fall below $57,000 could signal a more significant downtrend.
Daily Market Movers:
- Crypto Sentiment: Bitcoin’s recent struggles highlight its role as a leading indicator for broader market sentiment. The ongoing weakness in crypto markets could foreshadow further challenges for risk assets.
Bitcoin’s inability to hold above $60,000 amid the broader market decline reflects ongoing volatility and market concerns. Traders will be watching closely for further developments, particularly if Bitcoin breaks below key support levels.
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