North American News
S&P and NASDAQ snap four-day winning streak. Dow up for the 5th consecutive day
- UnitedHealth saves the Dow
The broader S&P and NASDAQ index snapped 4-day winning streaks, while the Dow industrial average extended its streak to 5 days.UnitedHealth soared by 7.27% today and was responsible for over 200 points of the Dow’s gains today. The Dow closed up $113.89 points.
A snapshot of the market shows
- Dow industrial average rose 113.89 points or 0.33% at 34509.04
- S&P index fell -4.64 points or -0.10% at 4505.41
- NASDAQ index fell -24.88 points or -0.18% at 14113.69
The small-cap Russell 2000 fell -19.80 points or -1.01% at 1931.08
The winning sectors today were led by:
- Healthcare, +1.5%
- Consumer staples +0.35%
- Consumer discretionary, +0.27%
The lagging sectors today included:
- Energy -2.75%
- Financials -0.68%, and
- Communication services, -0.62%
The top Dow stocks this week included:
- Salesforce +9.42%
- 3M +5.15%
- Home Depot +4.55%
- Caterpillar was 4.27%
The laggards of the Dow this week included:
- Verizon -5.21%
- Travelers -3.33%
- Merck -1.5%
- Cisco -1.20%
A look at the major indices this week showed gains across the board:
- Dow industrial average rose 2.29%
- S&P index rose 2.42%
- NASDAQ index rose 3.32%
- Russell 2000 rose 3.56%
J.P. Morgan, Citigroup and Wells Fargo reported earnings this morning.
- J.P. Morgan shares are up 1.44%
- Citigroup shares are down -1.64%
- Wells Fargo shares are up 0.85%
University of Michigan preliminary sentiment for July 72.6 versus 65.5 estimate
- University of Michigan consumer sentiment preliminary data for July 2023
- Prior month 64.4
- current conditions at 77.5 versus 70.4 estimate and 69.0 last month
- expectations 69.4 versus 61.8 estimate and 61.5 last month
- one year inflation it rises to 3.4% from 3.3% last month
- 5 year inflation expectations rises to 3.1% from 3.0% last month
WSJ Timiraos: July is all but decided. Hawks already pushing for September
- The latest from Fed watcher at the WSJ
Highlights:
- The focus of the meeting is likely to be what circumstances might trigger another rate hike in the fall. Even though inflation has recently slowed down, which could potentially signal that the upcoming increase might be the last in the Fed’s inflation fight, officials are still considering a rate lift this month. This is due to strong economic activity and hiring since May, exceeding initial expectations.
- Nonetheless, officials want further evidence of a continuous inflation decrease before deciding to halt the increases. For instance, Fed governor Christopher Waller would like to ensure the recent inflation slowdown is not merely an anomaly.
- Concerns remain among officials, known as ‘hawks’, that unless economic activity and hiring slow down, it may be more difficult to bring down inflation further. Dallas Fed President Lorie Logan expressed concerns about achieving sustainable and timely inflation targets.
- The potential future rate hikes aim to slow down the economy by lowering asset prices and increasing borrowing costs. If rates remain steady when an increase is widely expected by investors, it could trigger a market rally, thus easing financial conditions and making it harder to reduce inflation.
- Opinions differ on when the next rate increase should occur, with some advocating for a second hike in September if inflation doesn’t continue to fall and economic activity doesn’t significantly slow down. Others believe the Fed should wait to see the full effect of the rate increases before making a decision, potentially delaying until November or December.
US import prices for June -0.2% versus -0.1% expected. YoY import prices -6.1%
- US import prices and export prices for June 2023
- US import prices for June -0.2% versus -0.1%. Prior month -0.4% versus -0.6% previously reported
- US export prices for June -0.9% versus -0.2%.
- Prior month -1.9%
- U.S. import prices have declined in 5 out of the first 6 months of 2023, following a 3.2% increase in 2022.
- Over the past year, import prices have fallen by -6.1%, marking the largest 12-month drop since May 2020.
J.P. Morgan’s Dimon: The headwinds in the economy are substantial
- As they make boatloads of money
JPM Dimon is speaking after announcing strong earnings and says:
- The headwinds in the economy are substantial and somewhat unprecedented
- the company has been over earning on credit for some time
J.P. Morgan earned $4.37 versus $4 expected on revenues of $41.3 billion versus $38.96 billion.
Shares are currently up $4.24 or 2.85% in premarket trading at $153.11. That’s all-time high reached $172.71 back in October 2021. It’s corrective low going back to October 2022 reached $101.28. For the year, the stock was up 11% at the close yesterday.
US announces to automatically forgive $39 billion in student debt
- This will cover education debt of roughly 804,000 borrowers
Well, just around two weeks after the Supreme Court shot down the student loan forgiveness prorgramme, we are seeing a somewhat similar relief measure being announced by the Biden administration. It would automatically forgive $39 billion in student debt for roughly 804,000 borrowers.
However, this debt relief continues to be part of a fix to the education loan system’s repayment plans.
And under those terms, borrowers will get any remaining debt cancelled by the government after they have made payments for 20 or 25 years – depending on their borrowing amount, loan type etc.
Feds Goolsbee: There is a path to curb inflation without recession
- Fed’s Goolbee (dove) speaking
Chicago Fed Pres. Feds Goolsbee (dove) is on the wires saying:
- there is a path to curb inflation without recession
meanwhile on CNBC Blackrocks CEO Larry Fink is saying:
- he thinks inflation will be stickier than the market expects
- sees inflation between 3 and 4%
What earnings will be released next week?
- Regional banks will be a focus
The earnings calendar was unofficially started today with the release of some of the major banks including J.P. Morgan, Citigroup, and Wells Fargo. So what is on tap for next week? Below are some of the major releases:
Tuesday, July 18
- Bank of America
- Novartis
- Morgan Stanley
- Lockheed Martin
- Charles Schwab
- PNC Financial
- Interactive brokers
- Bank of New York Mellon
- JB Hunt
Wednesday, July 19
- Tesla
- Netflix
- IBM
- Goldman Sachs
- Halliburton
- Alcoa
Thursday, July 19
- Johnson & Johnson
- American Airlines
- United Airlines
- Abbott Labs
- Philip Morris
- Intuitive Surgical
- Freeport McMoran
- Travelers
Friday, July 20
- American Express
- Schlumberger
- AutoNation
Also on tap are a slew of smaller regional banks including a large percentage of the stocks in the KRE index.
12 of the top 15 holdings of the KRE regional bank index representing about 25% of the total index will be released next week including.
- East West Bancorp EWBC (Thursday)
- First Horizon National FHN (Wednesday)
- Bank Ozk OZK (Thursday)
- Webster Financial WBS (Thursday)
- Synovus SNV (Thursday)
- M&T Bank MTB (Wednesday)
- Pinnacle Financial (Tuesday)
- Regents financial RF (Friday)
- Huntington Bancshare (Friday)
- Truist Financial Corp TFC (Thursday)
- Zions Bancorporation ZION (Wednesday)
- Western Alliance WAL (Tuesday)
Looking ahead:
Monday, July 24
- Alphabet
Tuesday, July 25
- Microsoft
- 3M
- General Motors
- Ford
- Raytheon
- GE
- Visa
Wednesday, July 26
- Amazon
- Meta-platforms
- Boeing
- Chipotle
- Coca-Cola
Thursday, July 27
- Bristol-Myers Squibb
- Intel
- McDonald’s
- Northrop Grumman
- MasterCard
Friday, July 28
- Procter & Gamble
- Chevron
- Exxon Mobile
When will Nvidia release earnings? Not until August 23rd.
Canadian manufacturing sales for May 2023 1.2% versus 0.8% expected
- Canada manufacturing sales for May 2023
- Prior month -0.1% revised from 0.3% previously reported
- Manufacturing sales rose by 1.2% to $72.9 billion in May, after a 0.1% decline in April (revised from 0.3%).
Commodities
Silver rises despite US yields recovering
- The XAG/USD closes the week with slight gains near the $25.00 area, tallying a six-day winning streak.
- The metal is set to close an 8% winning week.
- USD sell-off stalled amid positive UoM data and a slight US yield recovery.
In Friday’s session, the XAG/USD stands with gains near the $25.00 psychological resistance. Despite US Treasury yields recovering, the precious metal stays resilient while the USD managed to stop the bleeding, still closing its worst week in 2023.
WTI crude oil futures settle at $75.42
- Down $1.47 or -1.91%
The price of WTI crude futures is settling at $75.42. That’s it down $-1.47 or -1.91%. Although down nearly 2% today, the price this week is still up 2.09% helped by a more positive technical view.
Baker Hughes oil rig count -3 to 537
- Total rates fall by 5
The Baker Hughes rig count for the week shows:
- Oil rigs, -3 at 537
- Nat. Gas rigs, -2 at 133
- Total rigs, -5 at 675
EU News
European major indices move modestly lower today but have solid gains for the week
- France’s CAC modestly higher
- German DAX fell -0.22%
- France’s CAC rose 0.06%
- UK’s FTSE 100 fell -0.08%
- Spain’s Ibex fell -0.43%
- Italy’s FTSE MIB fell -0.39%
For the trading week:
- German DAX rose 3.22%
- France’s CAC rose 3.69%
- UK’s FTSE 100 rose 2.45%
- Spain’s Ibex +2.05%
- Italy’s FTSE MIB +3.18%
Eurozone May trade balance -€0.3 billion vs -€11.7 billion prior
- Latest data released by Eurostat – 14 July 2023
- Prior -€11.7 billion
Germany June wholesale price index -0.2% vs -1.1% m/m prior
- Latest data released by Destatis – 14 July 2023
- Prior -1.1%
Switzerland June producer and import prices 0.0% vs -0.3% m/m prior
- Latest data released by SECO – 14 July 2023
- Prior -0.3%
Other News
BOJ announces to host first discussion on long-term policy review in December
- The topics of discussion will include monetary policy, the financial system, and financial markets
This is a new initiative undertaken by the BOJ as they seek to conduct a e review of monetary policy from a broad perspective. And it looks like it will be one that will take quite some time. The first discussion/workshop will take place later in December this year with the second one set for May 2024.
Ex-BOJ Hayakawa expects Bank to tweak yield curve control (YCC) program this month
Hideo Hayakawa is a former chief economist and director at the Bank of Japan. He spoke in an interview with Bloomberg.
- He is expecting the BOJ will probably adjust its yield curve control program at its policy meeting this month (July 27 and 28), citing inflation that is stronger than expected.
- “I expect they will make some kind of adjustment to YCC this month”
- Doubling the BOJ’s allowed trading band for the 10-year yield from 0.5% either side of zero is a likely way to adjust yield control
- “The BOJ is very close to the situation the Fed was once in — saying inflation is transitory and then being forced to ditch that stance after the situation worsens”
China invites global investors for rare symposium next week – report
- Reuters reports on the matter, citing sources who have direct knowledge of the matter
As China’s economy is sputtering, it seems like Beijing is stepping up initiatives to try and bolster the economy. The latest being reported is that financial regulators have invited some of the world’s biggest investors for a rare meeting next week, to encourage investment in the Chinese economy.
The meet is said to focus on current conditions of US dollar-denominated investment firms in China and the main challenges that are being faced by them. The sources said that such a meeting, especially with such a clear agenda, is typically rare and it shows Beijing’s eagerness to shore up investor confidence.
People’s Bank of China Deputy Governor says Bank has ample policy tools
People’s Bank of China Deputy Governor Liu:
- Needs time for China’s economy to return to normal after pandemic
- China has not seen deflation, no deflationary risks in H2
- CPI could go lower in July, rebound in August
- Bank has ample policy tools, will step up counter-cyclical adjustments
- Will keep credit growth appropriate, will step up support for key sectors
- PBOC will deepen interest rate reforms
- Will guide banks to increase lending to small firms, to private firms
- It’s not good to see yuan exchange rate too high or too low
- Will prevent sharp fluctuations in yuan
- Expects china’s economy to improve
- China’s cross-border capital flows are basically balanced
- Moves in yuan exchange rate will not be one-way
Cryptocurrency News
Coinbase-SEC lawsuit unrelated to XRP non-security ruling, executives drop COIN stock like hot cakes
- SEC vs Ripple lawsuit outcome has little bearing on the regulator’s lawsuit against Coinbase.
- Investment bank Berenberg says that Judge Analisa Torres’ decision on XRP may have no relationship with COIN.
- Coinbase executives and institutional investors have consistently shed their COIN stock holdings over the past week.
The SEC vs Ripple lawsuit outcome fueled a bullish sentiment in the crypto community.
Experts are arguing that Coinbase is likely to land a win as the regulator’s argument against the platform’s sale of unregistered securities.
Investment banking experts at Berenberg told CoinDesk that this is unlikely and the status of XRP as a non-security in secondary market sales may have little-to-no bearing on the lawsuit against the exchange.
Solana hits new milestone as Total Value Locked hits 2023 high of $1.1 billion
- Solana price rallied on the back of Ripple’s win in the SEC lawsuit, driving the altcoin to its 2023 peak of $32.14 on Binance.
- The total value of assets locked on the Solana blockchain exceeded $1.099 billion, an annual high.
- SOL network witnessed 26.66 million transactions in a 24-hour period, fueling bullish sentiment among holders.
Solana, an Ethereum alternative and a leading altcoin in the crypto ecosystem witnessed a massive price rally in response to the news of XRP being deemed a “non-security,” in the SEC vs Ripple lawsuit.
The SOL network witnessed an increase in the total value of assets locked in its blockchain, a metric that fuels a bullish thesis for the altcoin.
XRP trading volumes hit $2.5B on South Korean exchange UpBit
Trading volumes of XRP tokens against the Korean won hit $2.5 billion on South Korean exchange UpBit in the past 24 hours, the highest among counterparts, in a sign of speculative frenzy.
This was more than 50% of the total trading volumes on UpBit in that period. Data shows market depth stood at nearly $5 million as of Asian morning hours, suggesting ample liquidity for the tokens as a $5 million buy or sell order would move the tokens only 2% on the exchange. Such liquidity is usually under $1 million, historical data shows.
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