North American News
Dow Extends Winning Streak, Major Indices Close Higher
- The S&P and Nasdaq up for the 6th in 7 days
The major stock indices closed higher on the day.The Dow led the way with a gain of 1.06%. That was good for the 7th consecutive up day for that index. The Nasdaq and the S&P each closed higher for the 6th in 7 trading days.
The final numbers are showing:
- Dow industrial average is up 366.58 points or 1.08% at 34951.92
- S&P is up 32.19 points or 0.71% at 4554.97
- Nasdaq is up 108.68 points or 0.76% at 14353.63
The Dow was pushed higher with Microsoft a leader. After trading up over 5% for a lot of the day, MSFT closed up 3.98% at $359.49. They announced that they would incorporate their chatbot in Office suite for a monthly charge of $30.
Other winners in the Dow
- UnitedHealth rose 3.29%
- Goldman Sachs rose 3.08%
- Verizon arose 2.54%
- Caterpillar rose 2.46%
Other big winners today included:
- Charles Schwab rose 12.52% after beating on earnings
- Morgan Stanley rose 6.46% after they announced earnings today
- Netflix rose to 5.5%
- Bank of America (also announced earnings) closed up 4.49%
- Uber rose 4.15%
- Palantir rose 3.85%
- Live Nation rose 3.56%
US June retail sales 0.2% versus 0.5% expected
- US June 2023 retail sales data
- Prior was 0.3% revised higher to 0.5%
Details:
- Retail sales MoM 0.2% versus 0.5% expected
- Ex Autos 0.2% versus 0.3% expected.
- Prior ex autos 0.1% revised higher to 0.3%
- Control group 0.6% versus 0.3% expected.
- Prior control group 0.2% revised higher to 0.3%
- Retail sales ex gas and Autos 0.3%.Prior month revised from 0.4% higher to 0.5%
- retail sales came in at 689.5 billion
US July NAHB housing market index 56 vs 56 expected
- US July home builder survey
- Prior was 55
Details:
- Current single family home sales 62 versus 61 in June
- Home sales over next 6 months 60 versus 62 in June
- Index of prospective buyers 40 versus 37 in June
Atlanta Fed GDPNow Q2 tracker rises to 2.4% from 2.3%
- Q2 growth solid for Q2 as projected by the Atlanta Fed GDP model
The Atlanta Fed GDPNow Q2 growth estimate moves up to 2.4% from 2.3% on July 10.In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2023 is 2.4 percent on July 18, up from 2.3 percent on July 10.After recent releases from the US Department of the Treasury’s Bureau of the Fiscal Service, the US Bureau of Labor Statistics, the US Census Bureau, and the Federal Reserve Board of Governors, increases in the nowcasts of second-quarter real personal consumption expenditures and real government spending growth from 1.2 percent and 2.4 percent, respectively, to 1.4 percent and 2.8 percent were partially offset by a decrease in the nowcast of second-quarter real gross private domestic investment growth from 10.5 percent to 9.4 percent, while the nowcast of the contribution of the change in real net exports to second-quarter real GDP growth increased from -0.72 percentage points to -0.67 percentage points.
US May industrial production -0.5% versus 0.0% expected
- US industrial production and capacity utilization for June 2023
- Prior was -0.2% (revised to -0.5%)
- Manufacturing output -0.3% vs 0.0% expected
- Prior output +0.1% (revised to -0.2%)
- Capacity utilization 78.9% vs 79.5% expected
Microsoft trading higher after announcing AI Chatbot pricing.Shares trade to new AT high
- Chatbot to be included within the Microsoft office library
Microsoft is trading sharply higher after announcing AI Chatbot pricing. Chatbot is to be included within the Microsoft office library. The cost will be $30 per month more for Office subscribers.
Microsoft shares are trading up $15.81 or 4.57% at $361.78.
US business inventories for May +0.2% versus 0.2% expected
- US business inventories for May 2023
- Prior month 0.2% revised to 0.1%
- Business inventories 0.2% versus 0.2% expected
- Retail inventories ex-autos -0.1% versus -0.3% last month
- In May, the combined value of distributive trade sales and manufacturers’ shipments reached an estimated $1,822.1 billion. This represents a 0.2% increase compared to April 2023. However, when compared to May 2022, there was a decline of -1.8% (with a margin of error of ±0.5%).
- The total business inventories/sales ratio based on seasonally adjusted data at the end of May was 1.40. The May 2022 ratio was 1.33. Period the inventory to sales ratio is within the pre-pandemic levels between 1.35 and 1.45.
US retail sales are carried by services but will slow as jobs market tightens
- CIBC reviews the US retail sales report
In June, US retail sales increased by only 0.2%, falling below the consensus prediction of 0.5%.This disappointing result was driven by a decrease in gasoline sales, building materials, and restaurant spending. However, the previous month’s data was adjusted upwards by 0.2 percentage points to 0.5%.
June’s spending was bolstered in other sectors due to a strong labor market. The control group of sales, which impacts non-auto goods consumption in GDP directly, rose by 0.6%, exceeding the consensus prediction of 0.3%. This included a significant 1.9% rise in online spending after a decline in May.
“Today’s release left control group sales up by 2.1% annualized over the second quarter, less than half the pace seen in Q1, and suggesting that goods consumption will be a modest negative for GDP in Q2, leaving services as the driver of consumption,” writes CIBC in the review of the report. “A slowdown in the labor market ahead should work to limit retail sales in discretionary categories further from here, in combination with the depletion of pandemic-accumulated excess savings, which will be key to stalling growth in the quarters ahead in order to get inflation back to target.”
BlackRock has named the Saudi Aramco CEO to its board
Reuters has the info of the appointment of Amin Nasser, the chief of the world’s largest oil company Saudi Aramco to the board of the world’s top asset manager, BlackRock.
Reuters says:
- His expertise in the Middle East will fill the gap left by Bader Alsaad, chairman of the board of the Arab Fund for Economic & Social Development, who is not standing for reelection on BlackRock’s board in 2024, the asset manager said on Monday.
Canada June CPI 2.8% y/y versus 3.0% expected
- Details of Canada’s CPI for the month of June 2023
- Prior was 3.0%
- CPI m/m % vs +0.3% expected
- Prior m/m reading was 0.4%
- Gasoline prices -% vs -18.3% y/y in prior month
- Gasoline prices % m/m vs -0.8% prior month
- Ex gasoline +4.0% y/y vs +4.4% prior
- Food +8.3% y/y vs +8.3% y/y prior
- Mortgage interest costs 30.1% y/y vs 4.9% increase in May
- Goods inflation +1.4% vs +2.1% y/y prior
- Services inflation +4.2% vs +4.9% prior
Core measures:
- BOC core y/y 3.2% vs 3.5% expected (prior 3.7%)
- BOC core m/m -0.1% vs +0.4% prior
- Median 3.9% vs 4.0% prior
- Trim 3.7% vs 3.8% prior
- Common 5.1% vs 5.2% prior
Canada June housing starts 281.4K vs 220.0K expected
- Canadian housing starts statistics for June 2023
- Prior was 202.5K (revised to 200.0K)
- largest month-to-month change in the last 10 years
- Multi-unit urban starts increased by 59% to 219,914
- Single-detached urban starts increased by 3% to 42,901
Commodities
Gold jumps to its highest level since early June after US Retail Sales
- Gold advanced near $1,980, its highest since June 2.
- Retail Sales data from the US from June came in below expectations.
- Lower yields allowed metals to advance.
On Tuesday, the XAU/USD advanced towards $1,980 and displayed more than 1% gains. In that sense, as the Retail Sales hint at a decelerating US economy, US Treasury yields declined across the board, favouring the yellow metal’s price.
WTI crude oil futures to settle at $75.75. That’s easy to remember
- Up $1.60 or 2.16%
The price of WTI crude oil recovered to the upside today. The price of the futures settled at $75.75, up $1.60 or 2.16%.
Technicals are playing a role in the price action.
Natural Gas Futures: Potential rebound in store
CME Group’s flash data for natural gas futures markets noted traders reduced their open interest positions by around 12.2K contracts at the beginning of the week following three consecutive daily builds. In the same line, volume went down for the second straight session, now by more than 83K contracts.
EU News
European equities surge in late trading as global yields fall
- Closing changes for the main European bourses
The intraday chart of the Stoxx 600 shows how it was a ho-hum day until the last 90 minutes of trade as yield fell and stocks caught a steady bid.
- Stoxx 600 +0.7%
- German DAX +0.4%
- French CAC +0.4%
- Italy MIB +0.4%
- Spain IBEX +0.2%
Italian 10-year yields fall to 4.0%
- Italian 10-year yields down 17 bps today
There is a massive wedge shaping up and we’re now back testing the downside. The 17 bps drop today is part of a 41 bps drop in the past six trading days.
German bund yields are also down 10 bps today as the market may be sniffing out a sharp slowdown in the eurozone economy that will be compounded by another ECB rate hike on July 27.
ECB’s Knot: Rate hikes beyond July possible but not certain
- Remarks by ECB policymaker, Klaas Knot
- It loos like core inflation has plateaued
- We need to hike rates in July
- Optimistic to see inflation reaching 2% in 2024
- There is still lots of data due between now and September
Other News
BOJ’s Ueda: Still some distance to sustainably achieve 2% inflation target
- Comments from Ueda
- BOJ has been patiently maintaining easy policy
- Unless our assumption on need to sustainably achieve 2% target changes, our narrative on monetary policy won’t change
China announces some measures to bolster use of consumer goods and services
- As announced by the Chinese commerce ministry
There is a total of 11 measures set out by Chinese authorities, in trying to boost consumption of household consumer goods and services. The measures will include encouraging companies to develop online platforms for the provision of such services, a promotion for household consumer goods, and increasing credit support for goods consumption.
ICYMI – RBA Gov. Lowe said lifting productivity growth a greater challenge than inflation
Reserve Bank of Australia Governor Lowe spoke at the G20 finance meeting in India, alongside Australian Treasurer Chalmers.
On inflation and productivity:
- The reality that most of us face is that productivity growth has slowed down in most of our economies
- It means lower sustainable growth in real wages, it means a limited increase in output as well.
- low productivity growth means economic and social problems
- I agree the immediate consequence and the immediate challenge is to get inflation down. “We really need to be successful there but I think the bigger challenge is to lift productivity growth.
Cryptocurrency News
XRP: To buy or not to buy XRPLedger’s native token after SEC vs Ripple ruling
- XRP token’s market capitalization doubled to nearly $40 billion after the SEC vs Ripple ruling by Judge Analisa Torres.
- Exchanges are rushing to re-list the token, and automated market makers are developing projects for the XRP blockchain.
- Ripple claims to be in talks with 20 countries for CBDC plans, however experts believe XRP is less likely to see mass adoption in the short term.
The SEC vs Ripple ruling triggered a massive recovery in XRP market capitalization and price. The altcoin’s market cap is nearly $40 billion at the time of writing and the token is trading at $0.7394.
Chinese police confiscate $160 million worth of crypto; bolsters concern for 58 million users
- China announces the first crypto asset confiscation via court ruling on Tuesday, seizing nearly $160 million worth of crypto from a gambling platform.
- China still ranks as the second biggest crypto user nation, with 58 million users.
- The Chinese government recently launched its government-backed Metaverse platform but failed to ease policies toward crypto.
China began its assault on crypto two years ago and is continuing it to date, except this particular time, they did it more legally. Regardless, the anti-crypto stance held by the country is certainly a matter of concern for its many million users.
China goes after crypto again
Chinese police recently announced the country’s first case of confiscation of cryptocurrency through a court ruling. Per the announcement, nearly $160 million worth of digital assets were seized by the authorities. The police stated,
“Preliminary investigation of this online gambling case, the amount involved in the case reached 4000 billion, there were more than 5 people involved, the server was set up overseas, the method of fund laundering used the most difficult virtual currency, and the main backbone of the case may be overseas.
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