North American News
US Major Stock Indices Trim Losses and Finish the Day Near Intraday Highs
- Nasdaq is the laggard
The US major indices are closing lower in the day but things could’ve been worse. The major indices are near their highs.
A snapshot of the closing levels shows:
- Dow Industrial Average -158.66 points or -0.45% at 35314.50.At session lows, the index was down -465.73 point.
- S&P index -19.04 points or -0.42% at 4499.39.At session lows, the index was down -54.04 points
- NASDAQ index -110.08 points or -0.79% at 13884.31. At session lows, the index was down -225.06 point
I look at some of the major stocks shows :
- Apple which has been under pressure lightly rose $0.97 or 0.54% at $179.78
- Microsoft fell $4.03 or -1.22% at 326.08
- Nvidia fell $7.54 or 1.66% of 446.63
- Meta fell $-3.88 or -1.23% at 312.68
- Amazon fell $-2.27 or -1.60%
US sells 3-year notes at 4.398% vs 4.416% WI
- Results of the US 3-year note sale
- Prior was 4.534%
- Stop through by 1.8 bps
- Bit to cover at 2.90 vs 2.88 prior
US IBD/TIPP economic optimism 40.3 vs 43.0 expected
- US economic optimism reading from IBD/TIPP
- One-year low
- Average hourly wage rose 4.4% vs. a year earlier
- The six-month outlook for the U.S. economy fell 0.3 point to 35.2
- The personal finances subindex fell 1.3 points to 48.7
US June trade balance -65.5B vs -$65.0B expected
- US June international trade data
- Prior was -$69.0B
- Goods trade balance vs $-87.84B prelim
- US-China deficit at $24.11B vs $25.21B prior
- Exports $247.48B vs $247.83B prior
- Imports $312.98B vs $316.12B prior
Moody’s announces a number of regional bank downgrades
Moody’s came out with a slew of downgrades in a number of financial institutions.It will be curious to see the impact in the KRE regional bank index tomorrow.
- MOODY’S DOWNGRADES WEBSTER:
- Long-term issuer rating to BAA2 from BAA1
- Outlook: Stable
- Moody’s downgrades Associated Banc-Corp:
- Subordinate to Baa3 from Baa2
- Outlook: Stable
- MOODY’S DOWNGRADES BOK FINANCIAL CORPORATION:
- Long-term issuer rating to BAA1 from A3
- Outlook: Stable
- BRIEF-Moody’s Downgrades Prosperity Bank’s Ratings:
- Long-Term Deposits to A1 from Aa3
- Outlook: Stable
- MOODY’S DOWNGRADES FULTON:
- Long-term issuer rating to BAA2 from BAA1
- Outlook: Remains Negative
- MOODY’S DOWNGRADES PINNACLE FINANCIAL PARTNERS:
- Long-term issuer rating to BAA2 from BAA1
- Outlook: Changed to Negative
- Moody’s affirms University of Louisville Foundation’s (KY) Rating:
- Baal rating
- Outlook: Stable
- MOODY’S DOWNGRADES M&T’S RATINGS ON:
- Senior Unsecured BAA1
- Outlook: Stable
- BRIEF-Moody’s Downgrades Old National’s Long-Term Ratings:
- Senior Unsecured to Baal from A3
- Outlook: Negative
- Moody’s downgrades Amarillo National Bank:
- Issuer rating to Baa2 from Baal
- Outlook: Stable
- Moody’s downgrades M&Ps ratings on:
- Senior unsecured Baal
- Outlook: Stable
- Moody’s downgrades Old National’s long-term ratings:
- Senior unsecured to Baal from A3
- Outlook: Negative
- Moody’s downgrades Commerce:
- Long-term issuer rating to A3 from A2
- Outlook: Stable
US July NFIB small business optimism index 91.9 vs 91.0 prior
- Latest data released by NFIB – 8 August 2023
- Prior 91.0
US June wholesale sales -0.7% vs +0.1% expected
- US June wholesale sales and inventories
- Prior was -0.2% (revised to -0.5%)
- Wholesale inventories -0.5% vs -0.3% expected
- Prior inventories -0.3%
Goldman Sachs: Expectations for US CPI print on Thursday, lower than consensus
- Get the latest insights from Goldman Sachs on the upcoming US CPI data. Expectations for July are slightly lower than consensus, indicating a nuanced view of inflation drivers. The forecast highlights moderation in shelter inflation, lower used car prices, and slower non-housing services inflation. Discover the bank’s projections for year-end core CPI inflation and the declining trend ahead.
Goldman Sachs shares its outlook on the upcoming US Consumer Price Index (CPI) data for July, with expectations slightly lower than the general consensus. Here are the key details:
July Core CPI Prediction: Goldman expects a 0.15% increase in core CPI for July, translating to a year-over-year rate of 4.66%. This is below the consensus of a 0.2% increase and a 4.8% year-over-year rate.
July Headline CPI Forecast: The bank anticipates a 0.16% rise in headline CPI, corresponding to a 3.17% year-over-year rate. The consensus stands at a 0.2% increase with a 3.3% year-over-year rate.
Monthly Core CPI Inflation: Looking ahead, Goldmansees monthly core CPI inflation remaining within the 0.2-0.3% range overthe next several months. This outlook reflects an expected moderationin shelter inflation, decreased used car prices, and slower non-housingservices inflation as labor demand continues to ease.
Year-End Forecasts: Goldman projects core CPI inflation to be at 3.8% in December 2023 and 3.0% in December 2024.
Key Points:
- Goldman’s expectations for July core and headline CPI are below market consensus.
- The bank anticipates continued moderation in shelter inflation, lower used car prices, and slower non-housing services inflation.
- The longer-term forecast points to a decline in core CPI inflation by the end of 2024.
Conclusion: Goldman’s forecast for the US CPI print on Thursday is slightly lower than the market consensus, reflecting a nuanced view of inflation drivers. The bank’s projections take into account various factors influencing inflation, including shelter, used car prices, and non-housing services. The outlook also indicates adeclining trend in core CPI inflation over the next couple of years.This analysis provides a counterpoint to more widespread expectations and underscores the complexity of inflation dynamics in the current economic environment.
NY Fed: Household debt rose 0.1% in Q2
- New York Fed survey data
- Credit card balances rose 4.6% to a record $1.03 trillion
- Auto loan balances rose $20 billion to $1.58 trillion
- Mortgage balances largely unchanged at $12.01 trillion
Fed’s Harker: I believe we may be at the point where we can hold rates steady
- Barring ‘alarming’ new data by mid-Sept, I believe we may be at the where we can be patient and hold rates steady.
- Should we be arrive at the point of holding rates steady, ‘we will need to be there for awhile’
- Does not foresee any consequeences for an immediate easing of the policy rate
- Latest PCE report showed continued disinflation
- Sees core PCE falling just below 4% by year end and below 3% in 2024 and at target in 2025
- Expects unemployment to ‘tick up slightly’
- Expects only a modest slowdown
- I do see us on the flight path to a soft landing we’ve all been hoping for
- Focused on the Oct 1 resumption of Federal student loan repayments
- Inflation remains too high
- We don’t want to overdo it on rates
- GDP remains solid and labor market is ‘remarkably resilient’
- We’re going back to a more-normal circumstance
- Fiscal stimulus is burning off
- Supply chain issues are starting to heal
- Our forecast is not that inflation might spike back up
Canada June trade balance -$3.73B vs -$2.9B expected
- Canada June 2023 trade balance data
- Prior was -3.44B (revised to $2.68B)
- Exports $60.7B vs $62.05B prior
- Imports vs $64.43B vs $64.73B prior
Commodities
Silver approaches oversold conditions amid USD strength
- Silver lost more than 4% this week and fell to monthly lows near $22.65.
- The USD benefited due to a sour market mood.
- Markets try to decipher the next Fed movements while speakers deliver mixed signals.
On Tuesday, Silver continued its downward path and fell to its lowest since July 7th. The USD measured by the DXY trades strong above 102.50, but lower yields may cap gains. All eyes are now on inflation data on Thursday.
Impressive day for oil as it rallies $3 from the lows
- WTI settles at $82.92, up $98 cents
It was looking bleak for the oil bulls earlier today as crude prices fell $2 on worries about the Chinese economy. But the buyers put on a tour de force in New York trading, taking WTI to $83.03 from $79.90.
This kind of turnaround on a day with a poor risk backdrop is a sign of independent strength in oil and a tight market.
Saudi cabinet affirms support for OPEC+ precautionary efforts
- Comments carried in the state news agency
The Saudi cabinet says the Kingdom will continue boosting OPEC+ precautionary efforts to support stability in oil markets.
EIA boosts US oil output forecasts
- EIA sees 2023 US output higher by 200,000 barrels per day
- EIA sees 12.76m bpd this year vs 12.56m bpd prior
- Sees 13.09m bpd next year vs 12.85m bpd prior
- Sees 2024 production exit rate at 13.4m bpd
- Lowers 2024 world oil demand forecast by 30,000 bpd, which is a 1.61m bpd increase
- 2023 world oil demand growth unchanged at 1.76 mbpd
- They see brent prices averaging $86 in 2024
EU News
European equity close: Italy lags in a rough outing
Closing changes:
- Stoxx 600 -0.3%
- German DAX -1.2%
- UK FTSE 100 -0.4%
- French CAC -0.8%
- Italy MIB -2.2%
- Spain IBEX -0.7%
France June trade balance -€6.71 billion vs -€8.00 billion expected
- Latest data released by INSEE – 8 August 2023
- Prior -€8.41 billion; revised to -€7.93 billion
Germany July final CPI +6.2% vs +6.2% y/y prelim
- Latest data released by Destatis – 8 August 2023
- HICP +6.5% vs +6.5% y/y prelim
UK BRC retail sales monitor for July 1.8% versus 3.0% expected.
- UK BRC retail sales monitor for June 2023
British Retail Consortium data for July 2023:
- Like for like sales 1.8% YoY vs 3.0% expected. Prior month 4.2%
- Total retail sales 1.5% of the vs 4.9% prior month
The BRC-KPMG Retail Sales Monitor (RSM) is an accurate monthly measure of UK wide retail sales performance that acts as both a benchmark for participating retailers and as a key economic indicator. The RSM measures changes in the actual value of retail sales based on figures supplied directly by participating members representing over 60% of the industry by turnover. Originally set up at the request of BRC members to benchmark their own business performance against the wider industry, the BRC-KPMG Retail Sales Monitor is an authoritative measure on the health of the UK retail sector and the wider economy.
Eurozone consumers anticipate lower inflation but weaker spending power – ECB survey
- The ECB publishes its latest consumer survey on the euro area
- Inflation over the next 12 months seen at 3.4% (previously 3.9%)
- Inflation 3 years ahead seen at 2.3% (previously 2.5%)
Other News
Japan Chief Cabinet Sec. China hacking into Japan’s defense cyber networks not confirmed
- Geopolitical risks
Japanese chief cabinet secretary Matsuno:
- No security information leakage was confirmed when asked about China’s hacking into Japan’s defense cyber networks.
China trade balance for July USD 80.6 billion versus expected USD 70.6 billion
- Both imports and exports fall
- China trade balance USD comes in at 80.6 billion versus expected 70.6 billion.
- Previous 70.62 billion
- Exports YoY felt -14.5% versus expectations -12.5% (previous -12.4%)
- Imports YoY fell -12.4% vs expected -5.0% (previous -6.8%)
Japan’s LDP’s Aso says in Taipai, we are moving from peacetime to times of turbulence
- Geopolitical risks escalating
- In Taipei we are moving from peacetime to times of turbulence
- Believe that issues that were hidden beneath the surface are coming to the fore
- Taiwan is an important partner and friend
- Japan has continued to say that peace and Taiwan Strait is important for regional stability
- Most important thing is to make sure war doesn’t break out in the Taiwan Strait
Japan current account surplus 1.508 trillion versus 1.395 trillion estimate
- Japan current account surplus for June 2023
- Prior was 1.862 trillion
- The surplus was the fifth consecutive month with the trade balance showing a surplus.
- The current account surplus for June was 1.51 trillion yen ($10.6 billion), a growth of about 1 trillion yen from June of the previous year.This surpassed the predicted surplus of 1.395 trillion yen from a Reuters survey.
- Details:
- The trade balance showed a surplus of 328 billion yen due to trade gains growing by 1.4 trillion yen year-on-year.
- The primary income surplus reduced to 1.68 trillion yen, a drop of 167 billion yen from the same month the previous year.
Japan overall labor cash earnings for June 2.3% versus 2.9% last month
- Japan labor cash earnings for June 2023
- Prior month 2.9%
- Overall label cash earnings for June 2.3% versus 2.9% last month
- Overtime pay 2.3% versus 0.5% last month
Australia Westpac consumer sentiment for August -0.4% versus 2.7% last month
- Australia Westpac consumer sentiment for August 2023
- Prior month +2.7%
- Australian Westpac consumer sentiment for August -0.4%
- Index moves down to 81.0
- The decline is the first since May
NAB business confidence for July 2 versus -1 previous (revised from 0)
- NAB business confidence and business conditions
- Business confidence 2 versus -1 last month (revised from 0)
- Business conditions 10 versus 11 last month (revised from 9)
Cryptocurrency News
Fresh banking troubles provide a fresh bid for bitcoin
- Bitcoin up 2.6%
Bitcoin is in the midst of its best day in almost a month. It’s up 2.3%, or $752 to $29,925 as it threatens to retake $30,000 for the first time in a week.
The catalyst for the buying appears to be the Moody’s downgrade of several medium-sized US banks and threats to cut larger once. The Bank of New York Mellon, US Bancorp, State Street and Trust Financial were all put on review for downgrades following downgrades to 10 smaller banks.
“Many banks’ second-quarter results showed growing profitability pressures that will reduce their ability to generate internal capital,” Moody’s said in a note.
“This comes as a mild U.S. recession is on the horizon for early 2024 and asset quality looks set to decline, with particular risks in some banks’ commercial real estate (CRE) portfolios.”
Technically, Bitcoin found something of a bottom near $28,500 as it bottomed there last week and again this week. That’s a sign of a double bottom that would target $31,000.
In the bigger picture, Bitcoin bulls are excited about signs of a potential ETF approval as filings continue to roll in for BTC and ETH exchange-traded products. Reports have suggested the SEC is at least open to considering allowing ETFs and that’s something that would clear the way for Americans to own crypto in retirement accounts more easily.
Binance exchange to enjoy operational freedom in El Salvador despite short regulatory leash in the US
- Binance has secured approvals and registrations in 18 markets worldwide, becoming the first fully licensed crypto exchange in El Salvador.
- The exchange boasts a Bitcoin Services Provider license and the first non-provisional Digital Assets Services Provider license.
- These certifications allow Binance to offer tailor-made products and services in the country.
Binance, the largest cryptocurrency exchange by trading volume, is set to enjoy operational freedom in President Nayib Bukele’s country, El Salvador, after securing crucial licensure that will allow for customized products and services offered to the El Salvadorian citizenry.
Binance Exchange has secured two crucial licenses in El Salvador, a Bitcoin Services Provider (BSP) license and the first non-provisional Digital Assets Services Provider (DASP) license. The two authorizations, which make Binance a fully licensed exchange in El Salvador, also serve as a green light to offer “tailor-made products and services in the country.”
The BSP was issued by the Central Reserve Bank (Banco Central de Reserva), while the DASP was issued by the National Commission of Digital Assets (Comisión Nacional de Activos Digitales).
With this, Binance’s list of approvals and therefore registrations totals 18 markets across the globe, which is not a mean feat considering there is no other exchange that has achieved this much in authorizations. France, Italy, Spain, Sweden and Dubai are among the countries where the exchange is now registered.
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/
