Dow -0.14%, S&P 500 -0.28%, Nasdaq -0.18%, Russell 2000 -0.10%, SOX +0.38%, Eurostoxx -0.04%, SMI closed.
August has begun, but the market will have to wait a little longer before taking its annual siesta.
July was a good month for stock indexes, and August began against a backdrop of growing tensions between Washington and Beijing. As of yesterday’s session, the market is likely to consolidate its July gains. Trading volumes are relatively low, breadth is low (43% of S&P500 (SPX) stocks are closed), and oil is bearing the full brunt of the significant decline, with WTI Light Crude returning to $94.06 a barrel after the release. Chinese manufacturing PMI, which enters contractionary territory. Today’s platform for the SPX consists of consumer staples, consumer discretionary and industrials. Within the consumer sector, leaders are found in automobiles, retail, restaurants, real estate builders and airlines. Semiconductors and hardware companies also joined the party, with bond yields falling. The yield on the 10-year US fell to 2.55% this morning and is still trending at 3.07% on July 21. Technically it has room up to 2.23% to its 200 day moving average.
Major European stock markets were expected to fall early on Tuesday, following Asian indices on renewed tensions between China and the United States over Taiwan and worries about a slowdown in the economy. As a safe haven. The press is reporting that Nancy Pelosi is due to visit Taiwan later in the day, while China has repeatedly warned against a visit by the president of the US House of Representatives, which China considers part of its territory. Beijing is sending several planes to fly near its demarcation line in the Taiwan Strait, while several Chinese warships have already been in the area since yesterday. In addition to developments in the Sino-US issue, fears of a recession remain a major source of concern for global markets. Data released Monday in China, Europe and the United States indicated weakening industrial activity.
The market will focus on the “Pelosi affair.” The Chinese will flex their military muscles, the Americans will repeat that they are not being told what to do, and Taiwan will wait for it to pass, please and soon. Remember that this country produces two-thirds of the chips used in the world. So the market agrees to Taiwan’s wish…
Minneapolis Fed President Kashkari (long considered one of the central bank’s “dove” members) says NY Times He is surprised by the markets’ interpretation that the central bank will soon begin to slow its monetary tightening policy. Mr. Kashkari suggests markets may be pricing in a central bank move too soon.
US ISM and Markit PMI indices for July show contracting orders but easing price pressure, strong hiring but labor market contraction. These numbers indicate that the central bank’s quantitative tightening is beginning to bear fruit and that a “soft landing” may be possible. The manufacturing PMI for July came in at 52.8, above the consensus of 52.0 but below the June reading of 53. However, the report shows continued contraction and a shrinking backlog in new orders, albeit in a growth area. The employment index contracted for the third month in a row to 49.9. However, businesses continue to hire at a steady pace despite the slowdown in orders.
Apple is selling $5.5 billion in investment-grade bonds, the proceeds of which will fund general corporate purposes, such as share buybacks and dividends, according to Bloomberg. The longer portion of the delivery (40 years) yields 118 basis points compared to Treasury bonds. The deal’s order book soared to more than $23 billion.
The U.S. announced a $550 million arms package to Ukraine, including ammunition for advanced systems previously shipped. According to Kiev, grain exports will be limited to three ships per day for a two-week trial period. According to Bloomberg, Moscow will reject Washington’s proposed prisoner swap unless it receives two Russians in exchange for two Americans.
The RBA (Reserve Bank of Australia) raised its key rate for the third consecutive time by 50 basis points to 1.85%. Markets are counting on a rate of around 3% by the end of the year, which authorities need to control inflation.
ABB: Goldman Sachs is on the buy side with a raised price target of 36 to 40 francs. AMS-Osram: Kepler Cheuvreux puts it from buy, with a target of 8.50 euros. HSBC: Exane BNP Paribas moves from outperform to neutral with target of 750 GBp. Lind: Julius Baer is still buy with a raised price target of 12,000 to 12,500 francs. Logitech: Julius Baer is on the buy side with a reduced price target of 75 to 65 francs. Lonza: Julius Baer is on the buy side with a reduced price target of 780 to 740 francs. Nestlé: CFRA to be kept with a raised price target of 124 to 127 francs. Novartis: Intron Health moves from hold to buy with 90 francs target SICA: Credit Suisse is outperforming with a price target cut from 414 to 384 francs. Swiss Re: CFRA is long with a cut price target of 94 to 85 francs. TotalEnergies: Berenberg remains on the buy side with a price target cut from 66 to 63 euros. Fiat Chrysler (Stellantis) to pay $300 million to settle “Dieselgate” dispute Estee Lauder to negotiate takeover of Tom Ford Wall Street Journal. Elliott has become a major shareholder in Pinterest, whose headline is rising outside the session. French press titles sue Apple for app monopoly Moody’s downgraded Credit Suisse’s credit rating to “Baa2” due to problems with its investment bank’s recovery.
In Asia tonight and this morning, indices are trading clearly in the red, with tensions high over the approach of Nancy Pelosi’s visit to Taiwan. Tokyo lost 1.42%, Hong Kong 2.25%, Shanghai 2.13% and Seoul 0.51%. SPX futures fell 20 points and Europe opened 0.5% lower. No need for the dollar Surprisingly, the EUR/USD pair is moving at 1.0242, gold is moving to $1774 an ounce, the barbaric relic has recovered well since July 21 and is now looking at its moving average at 50 days, which stands. In 1793 dollars.
“Avid gamer. Social media geek. Proud troublemaker. Thinker. Travel fan. Problem solver.”