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Wall Street Warning Signs: Dow Transportation Stocks, Treasuries Fall

The Dow Jones Transportation Average (.DJT) is down about 5% this year, in stark contrast to the S&P 500's (.SPX) 9% year-to-date gain and the Dow Jones Industrial Average's (.DJI) 1% gain, which topped 40,000 for the first time this month.

While major indexes like the S&P 500, Nasdaq Composite (.IXIC), and Dow have all hit new all-time highs this year, the Dow Transportation Average has yet to surpass its November 2021 record and is currently down about 12% from that level.

Some investors believe that the continued decline in the 20-component transportation index, which includes railroads, airlines, trucking companies and trucking firms, could signal weakness in the economy. It could also prevent further strong gains in the broader market if these companies fail to recover.

Other struggling sectors include small-cap stocks, which some analysts say are more sensitive to economic growth than larger companies. Also in trouble are real estate stocks and some large consumer companies such as Nike (NKE.N), McDonald's (MCD.N) and Starbucks (SBUX.O).

Data this week showed that the U.S. economy grew at an annualized rate of 1.3% in the first quarter, well below the 3.4% growth rate seen in the fourth quarter of 2023. A major test of the strength of the economy and markets will be the release of the monthly U.S. jobs report on June 7.

Among the Dow transportation companies, the biggest year-to-date losers have been car rental company Avis Budget (CAR.O), down 37%, trucking company J.B. Hunt Transport (JBHT.O), down 21%, and airline American Airlines (AAL.O), down 17%.

Package delivery giants UPS (UPS.N) and FedEx (FDX.N) also lost ground, falling 13% and 1%, respectively. Railroads Union Pacific (UNP.N) and Norfolk Southern (NSC.N) are down about 7%. Only four of the 20 transportation components have outperformed the S&P 500 this year.

Stock markets have also been lower this week, with the S&P 500 down more than 2% from its record high hit earlier in May. Rising bond yields have raised concerns about the future performance of stocks.

Not all investors agree that the transportation index accurately reflects the health of the broader economy. The index, like the Dow Industrials, is weighted by price rather than market value and includes just 20 stocks.

Meanwhile, another important group of companies that is also considered an economic indicator — semiconductor makers — are doing much better.

The Philadelphia SE Semiconductor Index (.SOX) is up 20% this year. Investors are pouring in Nvidia and other chip companies that could benefit from growing interest in the business opportunity of artificial intelligence.

The overall market trend remains bullish for Horizon's Carlson, who tracks both the transportation and Dow Industrials to gauge market trends according to "Dow Theory."

The MSCI Global Equity Index rose Friday afternoon as investors reassessed their month-end positions. Meanwhile, the dollar and Treasury yields fell as data showed a modest rise in U.S. inflation in April.

After trading heavily lower for much of the session, the MSCI All Country World Price Index (.MIWD00000PUS) turned positive ahead of the index rebalancing.

When trading ended on Wall Street, the global index was up 0.57% to 785.54 after earlier falling to 776.86.

Before the market opened on Friday, the Commerce Department announced that the personal consumption expenditure (PCE) price index, often seen as the Federal Reserve's preferred inflation gauge, rose 0.3% last month. That was in line with expectations and an increase for March.

Meanwhile, the core PCE index increased 0.2%, compared with 0.3% in March.

The Chicago Purchasing Managers' Index (PMI), which measures manufacturing in the Chicago region, fell to 35.4 from 37.9 in the previous month, well below economists' forecasts of 41.

The MSCI index posted its second straight weekly decline, but still ended the month up.

On Wall Street, the Dow Jones Industrial Average (.DJI) added 574.84 points, or 1.51%, to 38,686.32. The S&P 500 (.SPX) rose 42.03 points, or 0.80%, to 5,277.51, while the Nasdaq Composite (.IXIC) lost 2.06 points, or 0.01%, to 16,735.02.

Earlier, Europe's STOXX 600 (.STOXX) closed up 0.3%. The index is up 2.6% for the month but down 0.5% for the week, its second straight weekly decline.

Data showed eurozone inflation beat expectations in May, although analysts say it's unlikely to stop the European Central Bank from cutting rates next week. However, it could strengthen the case for a pause in July.

The dollar index, which measures the greenback against a basket of currencies including the yen and euro, was down 0.15% at 104.61, its first monthly decline in 2024 since the data was released.

The euro was up 0.16% at $1.0849, while the dollar was up 0.27% at 157.24 against the Japanese yen.

Treasury yields fell amid signs that inflation was stabilizing in April, suggesting a possible Fed rate cut later this year.

The 10-year U.S. Treasury yield was down 5.1 basis points to 4.503% from 4.554% late Thursday, while the 30-year yield was down 3.4 basis points to 4.6511% from 4.685%.

The yield on the two-year note, which typically reflects interest rate expectations, fell 5.2 basis points to 4.8768% from 4.929% late Thursday.

In the energy sector, oil prices fell as traders focused on the upcoming OPEC+ meeting on Sunday to decide on further output cuts.

U.S. crude fell 1.18% to $76.99 a barrel, while Brent crude fell 0.29% to $81.62 a barrel.

Gold also lost ground, falling 0.68% to $2,326.97 an ounce on the day. However, the precious metal still posted its fourth straight monthly gain.
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The main events by the morning: June 4

The Ministry of Finance in the Russian Federation intends to officially recognize mining. The agency advocates the definition of cryptocurrency mining as a type of economic activity, as well as the assignment of the code of the all-Russian classifier. The Ministry of Industry and Trade also considers it necessary to legislate the definition of mining, as well as the establishment of rules for the issuance of accounting and circulation of cryptocurrencies.

The Italian bank UniCredit has no plans to leave Russia. The group's chief executive officer stated that the probability of the bank's withdrawal from the Russian market in the current conditions is quite low. At the moment, there are certain difficulties with the sale of the business, including political ones. However, the bank continues to look for options.

In May alone, Trump raised $300 million in donations for his re-election campaign. Almost half of this amount was donated by 2 million ordinary Americans. Another $150 million was sent by companies and organizations supporting the ex-president. On the day after the guilty verdict against Trump, $53 million was raised.

The number of purchases by Russians on foreign marketplaces is decreasing. According to the forecast of Data Insight and GBS, the volume of direct online purchases by Russians will decrease by 9.6% in 2024. The number of orders, on the contrary, may grow by 4% after falling by 22% in 2023. Domestic marketplaces are becoming increasingly popular among Russians.

More than 50% of Russian companies have lost access to Microsoft cloud products. The wave of blackouts began on May 15-16 and continues to this day. This affected Visio Online, Project Online, Power BI and other products. Softline stated that more than 50% of businesses faced restrictions from Microsoft.

Gazprom has problems with China: the Power of Siberia-2 agreement has reached an impasse due to new demands from Beijing. China demands that Gazprom sell gas to the country at domestic prices. Moreover, China is ready to buy only a part of the planned annual capacity of the gas pipeline.
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GBP/USD: trading plan for the US session on June 5th (analysis of morning deals). Sellers managed to protect 1.2779, but what's next

In my morning forecast, I drew attention to the level of 1.2779 and planned to make market entry decisions based on it. Let's look at the 5-minute chart and see what happened. The rise and formation of a false breakout there led to a sell signal, but after moving down by 12 points, the pressure on the pound decreased. As long as trading remains below 1.2779, the signal can be expected to work, but everything will depend on US data. The technical picture for the second half of the day still needs to be revised.

To open long positions on GBP/USD:

Only very strong data on the increase in employment from ADP, exceeding economists' forecasts, and an increase in business activity in the US services sector from ISM will lead to a decline in the pound and a return to yesterday's low, which I plan to take advantage of. A decline and formation of a false breakout around the new support at 1.2746 will provide an entry point for long positions, anticipating a return and update of 1.2779, which could not be surpassed in the first half of the day. Only a breakout and a reverse top-down test of this range will provide a suitable entry point for buying the pound, leading to an update of the next resistance at 1.2810, the month's high. The furthest target will be the 1.2853 area, where I plan to take profit. In the scenario of GBP/USD declining and a lack of bullish activity around 1.2746 amid strong US statistics, all buyers' efforts from yesterday will be negated. This will also lead to a decline and an update of the next support at 1.2721, formed at the end of last week. Only a false breakout formation will be suitable for opening long positions. I plan to buy GBP/USD immediately on a rebound from the 1.2695 minimum with the goal of a 30-35 point correction within the day.

To open short positions on GBP/USD:

The advantage will stay with the sellers as long as trading remains below 1.2779. This will allow the morning sell signal to materialize, but as mentioned above, much depends on the US statistics. In case of weak data, the bears will have to prove their advantage again around 1.2779. A false breakout formation there, similar to what I discussed above, will confirm the presence of large sellers in the market and provide an entry point for short positions with the goal of further GBP/USD decline towards the support at 1.2746. A breakout and reverse bottom-up test of this range will give the bears an advantage and another entry point for a sale to update 1.2721, where I expect more active buyer presence. The furthest target will be the 1.2695 minimum, which will trap the pair in a wide sideways channel. There, I will take profit. With GBP/USD rising and no bears at 1.2779 in the second half of the day, buyers will regain the initiative, having the opportunity to update 1.2810. I will also sell there only on a false breakout. If there is no activity, I advise opening short positions on GBP/USD from 1.2853, anticipating a 30-35 point downward correction within the day.

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EUR/USD. June 6th. Traders calmly await ECB decisions

On Wednesday, the EUR/USD pair rebounded from the corrective level of 76.4%–1.0892, a slight decline, and today—a new return to this level and a new rebound. Trader activity yesterday was quite low, but it may sharply increase today. The decline in quotes may continue towards the Fibonacci level of 61.8%–1.0837. Consolidating the pair's rate below the ascending trend corridor may end the bulls' dominance.

The wave situation remains clear. The last completed upward wave did not break the peak of the previous wave, and the last downward wave broke the low from May 23, but only by a few pips. Thus, we got the first sign of a trend change from "bullish" to "bearish," but it soon became clear that we would not see or get any downward reversal. The next upward wave then broke the peaks of the previous two waves. Therefore, for a prolonged decline in the euro, we must now wait for a new sign of a trend change. Such a sign could be close to 1.0785 or below the ascending corridor.

The information background on Wednesday again did not support bear traders as they would have liked. Currently, the European currency is moderately declining, but soon, the results of the ECB meeting will be known, and ECB President Christine Lagarde will speak in half an hour. The rate cut is already priced into the EUR/USD pair, but it is possible that the regulator will not soften monetary policy today. I do not rule out such an option. If rates are not lowered today, then bull traders will again go on the offensive. If Christine Lagarde adheres to "hawkish" rhetoric today, it will also support the euro. And what could be "hawkish" rhetoric? Lagarde may say that the next rate cut will not happen soon and that ensuring the continuation of the inflation decline is necessary.

On the 4-hour chart, the pair rebounded from the Fibonacci level of 50.0%–1.0794 and reversed in favor of the European currency. A new "bullish" trend line has formed, so the upward process may continue toward the next corrective level of 23.6%–1.0977. Now, declines in the European currency can be expected after the quotes are consolidated below the trend line. No emerging divergences were observed today for any indicator.
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Wall Street Sliding: S&P 500, Nasdaq Fall Ahead of Jobs Data

The S&P 500 and Nasdaq Composite ended Thursday with small losses ahead of a major jobs report, retreating from record highs hit the day before. The Dow, however, edged up slightly.

The S&P 500 and Nasdaq started the day higher and hit intraday records, but then retreated as tech stocks slid.

Utilities and industrials also contributed to the S&P 500's decline, with consumer discretionary and energy leading the gains.

Nvidia shares fell 1.1%, falling to third place in the world's most valuable companies, behind Apple, which regained the second spot.

Investors are eyeing a key U.S. nonfarm payrolls report on Friday. The latest weekly jobless claims report points to a softening labor market that could allow the Federal Reserve to begin cutting interest rates. The European Central Bank cut its interest rate for the first time since 2019.

The Dow Jones Industrial Average gained 78.84 points, or 0.20%, to 38,886.17. The S&P 500 lost 1.07 points, or 0.02%, to 5,352.96, while the Nasdaq Composite fell 14.78 points, or 0.09%, to 17,173.12.

Among the Dow Jones components, Salesforce Inc. was the top gainer, up 6.23 points (2.63%) to close at 242.76. Amazon.com Inc. was up 3.72 points (2.05%) to close at 185.00.

Nike Inc. was up 1.40 points (1.48%) to close at 95.72.

Intel Corporation was the top loser, down 0.36 points (1.17%) to 30.42. 3M Company shares added 0.84 points (0.85%) to close at 98.22, while Goldman Sachs Group Inc shares fell 3.58 points (0.78%) to end at 458.10.

Among the S&P 500 index's top gainers were Illumina Inc shares, which rose 7.42% to close at 114.72. PayPal Holdings Inc shares rose 5.49% to close at 67.02, while MarketAxess Holdings Inc shares increased 4.86% to end at 205.97.

NRG Energy Inc shares showed the biggest decline, losing 4.56% to close at 77.83. Hubbell Inc shares fell 4.11% to end at 365.94. Eaton Corporation PLC fell 4.02% to 313.46.

The biggest gainers on the NASDAQ Composite were Virax Biolabs Group Ltd, up 85.85% to 1.97. SilverSun Technologies Inc rose 68.61% to close at 220.00, while Fibrobiologics Inc rose 53.88% to 10.31.

Cue Health Inc was the worst performer, down 79.95% to 0.01. Plutonian Acquisition Corp fell 58.10% to close at 2.43. Actelis Networks Inc fell 47.04% to 1.97.

The rise of Nvidia and other AI-related stocks has been a key factor in supporting Wall Street's rally this year. The chipmaker has contributed significantly to the S&P 500's gain of more than 12% for the year.

Traders are pricing in a 68% chance of a rate cut in September, according to CME's FedWatch tool, and are pricing in two rate cuts this year, according to LSEG data. Forecasters polled by Reuters also expect two rate cuts.

"We're in a period of uncertainty between now and tomorrow," said Thomas Hayes, chairman of Great Hill Capital in New York. "But overall, we're seeing the beginning of a global, coordinated easing policy from central banks in the West, with the exception of Japan, which is tightening," he added.

GameStop shares jumped 47% after a popular online influencer known as "Roaring Kitty" announced on YouTube that she would be livestreaming on Friday.

Lululemon Athletica shares rose 4.8% after the company beat first-quarter earnings and revenue estimates.

U.S.-listed shares of Chinese electric vehicle maker NIO (9866.HK) fell 6.8% after reporting a quarterly net loss.

Five Below shares fell 10.6% after the discount store operator lowered its full-year net sales forecast.

Advancing stocks outnumbered declining stocks on the NYSE by a 1.05-to-1 ratio. On the Nasdaq, 1,729 stocks ended higher and 2,445 ended lower, for a 1.41-to-1 ratio in favor of decliners.

The S&P 500 posted 25 new 52-week highs and five new lows, while the Nasdaq Composite posted 57 new highs and 110 new lows. Total equity trading volume on U.S. exchanges was about 10.4 billion, below the 20-day average of 12.7 billion.

August gold futures rose 0.69%, or 16.50, to $2.00 a troy ounce. WTI crude oil futures for July delivery rose 2.01%, or 1.49, to $75.56 a barrel. Brent crude futures for August delivery rose 1.87%, or 1.47, to $79.88 a barrel.
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Investors disappointed as no U.S. rate cut expected

Wall Street stocks ended slightly lower on Friday amid turbulence after strong U.S. jobs data confirmed the resilience of the economy but also raised concerns that the Federal Reserve may keep interest rates high longer than many investors had expected.

The U.S. Labor Department said it added about 272,000 jobs in May, well above analysts' forecasts of 185,000. The unemployment rate rose to 4%.

The S&P 500 (.SPX) fell sharply after the report, while Treasury yields rose as traders revised down their expectations for a rate cut in September. The index then rebounded and briefly hit a new intraday record as investors viewed the data as confirmation of a healthy economy.

Utilities (.SPLRCU), materials (.SPLRCM) and communications (.SPLRCL) were the biggest losers. Financials (.SPSY) and technology (.SPLRCT) were the best performers.

For the week, the S&P 500 rose 1.32%, the Nasdaq gained 2.38% and the Dow Jones gained 0.29%.

"This shows that a rate cut is not coming anytime soon. Rising bond yields are putting significant pressure on risk assets, including small-caps," said Sandy Villere, a portfolio manager at Villere & Co in New Orleans.

"It's all about interest rates. They may stay higher longer than expected, and investors will have to adjust to the new environment," he added.

Markets reacted to the employment data by changing expectations for the timing of the Fed's rate cut. After the data was released, traders speculated that the Fed's rate cut from the current level of 5.25% to 5.5% may not begin until November. According to Fedwatch LSEG, the probability of the Fed cutting rates by 25 basis points in September has fallen to 56% from about 70% the day before.

The Dow Jones Industrial Average (.DJI) fell 87.18 points, or 0.22%, to 38,798.99, the S&P 500 (.SPX) lost 5.97 points, or 0.11%, to 5,346.99, and the Nasdaq Composite (.IXIC) fell 39.99 points, or 0.23%, to 17,133.13.

GameStop (GME.N) shares fell 39% in volatile trading that coincided with popular blogger Roaring Kitty's first livestream in three years. The company announced a possible stock offering and a cut in quarterly sales.

Other names popular with retail investors, such as AMC Entertainment (AMC.N) and Koss Corp (KOSS.O), also suffered significant losses, falling 15.1% and 17.4%, respectively.

Nvidia (NVDA.O) shares extended their losses from the previous session, pushing their market cap back below the $3 trillion mark.

Lyft (LYFT.O) shares rose 0.6% after the company forecast 15% growth in total bookings by 2027, announced after the close of trading on Thursday.

Declining stocks outnumbered advancing stocks on the New York Stock Exchange (NYSE) by a 2.72-to-1 ratio. On the Nasdaq, 1,177 stocks advanced and 3,064 declined, giving decliners a 2.6-to-1 ratio.

The S&P 500 posted 17 new 52-week highs and five new lows, while the Nasdaq Composite posted 34 new highs and 149 new lows. Total volume of shares traded on U.S. exchanges was about 10.75 billion, compared with an average of 12.7 billion over the past 20 trading days.

Lower expectations for quick Fed action weighed on stocks, which ended lower. The MSCI World Share Index (.MIWO00000PUS) was down 0.3% after hitting a record high of 797.48.

The yield on two-year notes, a proxy for interest rate expectations, rose nearly 17 basis points to 4.8868% after six straight days of declines. The rise in yields comes as bond prices have fallen.

Rate changes had been expected in September, especially after the European Central Bank cut its deposit rate to 3.75% from a record 4% on Thursday, in line with expectations.

The Bank of Canada on Wednesday became the first G7 bank to cut its key rate, following Sweden's Riksbank and the Swiss National Bank.

The employment report also changed the dynamics of eurozone rate expectations, with traders now forecasting a 55 basis point cut this year, up from 58 bps before the data.

The European Stoxx 600 (.STOXX), which has gained almost 10% since the start of the year, fell 0.2%.

The euro zone bond market also showed weakness, with German 10-year yields up 8 basis points to 2.618%.

In currency markets, the U.S. dollar rose 0.8% against a basket of major currencies, reversing a week of losses ahead of the employment data. The euro fell 0.8% to $1.0802 after a small gain the previous day.

Brent crude futures fell 0.6% to $79.36 a barrel. The stronger dollar weighed on spot gold, which fell 3.6% to $2,290.59 an ounce.
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S&P 500, Nasdaq hit new highs: What to expect from Fed meeting, CPI data

The S&P 500 and Nasdaq both hit new record closing highs on Monday, despite investor caution ahead of consumer price data and the Federal Reserve's policy announcement this week.

Nvidia (NVDA.O) shares provided some support to the Nasdaq and S&P 500, rising 0.7% after a 10-for-one stock split. Some investors now believe the chipmaker could be added to the Dow.

The May CPI report is due Wednesday, coinciding with the end of the Fed's two-day meeting.

The central bank is expected to leave interest rates unchanged while issuing updated economic and policy forecasts. Investors will be watching closely for any hints of a possible rate cut down the road.

"It's a big week for the market in terms of Fed commentary and statements," said Quincy Crosby, chief global strategist at LPL Financial in Charlotte, North Carolina.

"Additionally, the CPI report is due Wednesday morning. Everything related to the economy and inflation is viewed through the prism of the Fed's actions by the market," he added.

The Dow Jones Industrial Average (.DJI) rose 69.05 points, or 0.18%, to 38,868.04. The S&P 500 (.SPX) rose 13.8 points, or 0.26%, to 5,360.79, and the Nasdaq Composite (.IXIC) added 59.40 points, or 0.35%, to 17,192.53.

Traders trimmed their expectations for a September rate cut after stronger-than-expected May employment data on Friday, leaving the chance of a cut at 50%.

Apple (AAPL.O) shares fell 1.9% on the first day of its annual iPhone developer conference, with investors eagerly awaiting news on how the company will integrate artificial intelligence into its products.

Among the day's best performers were Southwest Airlines (LUV.N), which jumped 7% after activist investor Elliott Investment Management acquired a $1.9 billion stake in the company.

Diamond Offshore Drilling (DO.N) rose 10.9% after oilfield services company Noble (NE.N) announced it was buying a rival for $1.59 billion. Noble also rose 6.1%.

Advancing stocks outnumbered declining stocks 1.06-to-1 on the New York Stock Exchange, while gainers were outnumbered 1.01-to-1 on the Nasdaq.

The S&P 500 posted 19 new 52-week highs and five new lows, while the Nasdaq Composite posted 56 new highs and 177 new lows.

Trading volume on U.S. exchanges totaled 10.39 billion shares, below the 20-day average of 12.80 billion.

MSCI's global share index rose on Monday, despite investor expectations for key U.S. inflation data and an upcoming central bank meeting. The euro, however, slipped after French President Emmanuel Macron announced an early election.

U.S. Treasury yields rose as investors digested Friday's labor market data and looked ahead to consumer price data and a Federal Reserve statement this week. Eyes were also focused on the Bank of Japan's possible decisions.

Adding to the uncertainty was political instability in the euro zone's second-largest economy. Far-right gains in the European Parliament elections on Sunday prompted Macron to call a national election.

The euro hit a one-month low against the dollar, while European stocks also suffered.

"The uncertainty is coming from multiple sources. "The European elections over the weekend added volatility to the markets," said Chad Oviatt, director of investment management at Huntington National Bank.

The STOXX 600 index, which covers pan-European stocks, closed down 0.27%. France's blue-chip CAC 40 index fell 1.4%, hitting a more than three-month low.

However, the MSCI Global Equity Index (.MIWD00000PUS) turned from bearish to bullish territory by the end of the day, and Wall Street partially recouped its gains. As a result, the global index rose 0.75 points, or 0.09%, to 794.99.

Huntington National Bank's Oviatt said investors are eagerly awaiting the release of U.S. consumer price index (CPI) inflation data on Wednesday morning, ahead of the Federal Reserve's policy decision Wednesday afternoon.

Adding to the uncertainty about the impact of economic data on the Fed's interest rate policy was Friday's jobs report, which showed the U.S. economy added significantly more jobs in May than expected and annual wage growth accelerated again.

"Everyone seems to be hoping for a rate cut, but so far that hasn't been the case. "So everyone is looking to the CPI data on Wednesday morning, hoping that will give us more information and commentary from the Fed in the afternoon to clarify the situation," said Jim Barnes, director of bonds at Bryn Mawr Trust in Berwyn, Pennsylvania.

U.S. Treasury yields, which move inversely to prices, rose Monday, reflecting expectations for higher, longer-term U.S. rates.

The benchmark 10-year Treasury yield rose 4.1 basis points to 4.469%, up from 4.428% late Friday. The 30-year yield also rose, up 4.8 basis points to 4.5958%.

The 2-year yield, which typically responds to changes in interest rate expectations, rose 1.5 basis points to 4.8846% from 4.87% late Friday.

In the foreign exchange market, the euro fell to its lowest since May 9 against the U.S. dollar, down 0.37% to $1.076. Earlier, the euro hit a near two-year low against sterling.

The dollar index, which measures the greenback against a basket of currencies including the euro and the Japanese yen, rose 0.08% to 105.14. Against the Japanese yen, the dollar strengthened 0.21% to 157.03.

The Bank of Japan (BOJ) is holding a two-day monetary policy meeting this week and may offer new guidance on tapering its massive bond purchases.

In commodities, oil prices hit a one-week high on hopes for a pickup in fuel demand this summer. However, a stronger dollar and fading expectations for a U.S. rate cut capped gains.

U.S. crude rose 2.93% to $77.74 a barrel, while Brent crude rose 2.52% to $81.63 a barrel.

Gold prices pared their losses after their biggest drop in 3.5 years in the previous session, as investors awaited inflation data and a policy statement from the Federal Reserve.

Spot gold rose 0.72% to $2,309.15 an ounce.
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The main events by the morning: June 13

The United States imposed sanctions against Mosbirzhi, NCC and NSD. Starting from June 13, the dollar and the euro will stop trading on the stock exchange – transactions will take place on the over-the-counter market. The Bank of Russia will set the official exchange rate based on bank reports and over-the-counter trading.

The sanctions will not lead to a significant weakening of the ruble, limiting the fall to 10%. Bloomberg economists noted that in the event of a sharp drop in the exchange rate, the Bank of Russia and the Ministry of Finance will take measures to mitigate the shock by raising interest rates and increasing the supply of currency. It is also noted that the inflow of foreign currency to Russia through export-import channels will remain sufficient.

The exchange-traded currency market in Russia has lost dollars and euros. The sanctions have deprived Russia of the main part of the foreign exchange market. In May, more than 51% of the trading volume was accounted for transactions with the dollar and the euro. Now such transactions will move to a less liquid and transparent over-the-counter market, and you will have to focus on the official exchange rate set by the Central Bank.

The United States extended operations with the NCC until November 1. The United States has allowed energy-related transactions with the National Clearing Center (NCC) until November 1, despite sanctions against the Moscow Exchange. This decision includes transactions related to the extraction, processing, transportation and purchase of oil, petroleum products, natural gas and other energy resources.

Sanctions against the Moscow Exchange undermine confidence in the dollar. New restrictions continue to reduce the importance of the dollar as an international means of payment and reserve currency.

BRICS is developing a new monetary unit. The International Research Institute of Management Problems is working on the creation of a decentralized Unit system for settlements within the framework of the BRICS. The UNT coin will become the payment unit, which will help solve the problem of cross-border payments under sanctions.
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Tech Leads Wall Street to Records, Nasdaq, S&P 500 High

The Nasdaq and S&P 500 posted their fourth straight record closing high on Thursday, while Treasury yields fell to their lowest since early April. Investors reacted to lower-than-expected inflation data and a modest rate-cutting outlook from the Federal Reserve.

The dollar strengthened against major currencies as the Fed's hawkish stance and the prospect of trade tensions between Europe and China sent European stocks sharply lower.

The Dow Jones Industrial Average ended the day slightly lower. The Labor Department reported that producer prices fell 0.2% in May from the previous month, though they rose 2.2% year-on-year, 20 basis points above the Fed's 2% inflation target.

Separately, initial jobless claims hit a 10-month high. The data came after a weaker-than-expected consumer price index report on Wednesday and a revision to the Fed's forecasts, which now call for only one rate cut this year instead of three.

"After a solid rally, markets are taking a bit of a break from yesterday's big news, and that's a good thing," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Neb. "We call it the calm after the storm — consolidating the gains we saw in the first half of June."

Despite the Fed's hawkish rhetoric, expectations are growing that the central bank will cut rates for the first time as soon as September.

According to CME's FedWatch tool, financial markets are pricing in a 60.5% chance of the Fed cutting its target rate by 25 basis points in September.

"The Fed may sound hawkish, but they are dependent on economic data," Detrick said. "With today's positive PPI data, the market is thinking the Fed could ease if inflation continues to decline."

The Dow Jones Industrial Average (.DJI) fell 65.17 points, or 0.17%, to 38,647.04. The S&P 500 (.SPX) rose 12.71 points, or 0.23%, to 5,433.74, and the Nasdaq Composite (.IXIC) added 59.12 points, or 0.34%, to 17,667.56.

The S&P 500 and Nasdaq hit record closing highs for the fourth straight session on Thursday, driven by a continued rally in tech stocks.

The number of Americans filing new jobless claims last week, while another report showed an unexpected decline in producer prices in May, bolstering hopes for an early Fed rate cut.

The Federal Reserve on Wednesday forecast only one rate cut this year, down from three quarter-percentage-point cuts in March.

The S&P 500 tech sector (.SPLRCT) jumped 1.4% and the semiconductor index (.SOX) rose 1.5%, both hitting record closing highs.

Broadcom (AVGO.O) shares soared 12.3% after raising its revenue forecast for chips used in artificial intelligence technology. The company also announced a 10-for-1 forward stock split.

Nvidia (NVDA.O) rose 3.5%, while Apple (AAPL.O) rose 0.5%.

Adobe (ADBE.O) shares rose more than 14% in after-hours trading after the software maker beat Wall Street's second-quarter revenue expectations. However, the stock was down 0.2% in the main session.

New data released Wednesday showed that the consumer price index was unchanged in May for the first time in nearly two years, raising concerns among some investors that the economy could be slowing too much.

The economically sensitive industrial sector (.SPLRCI) fell 0.6%, while the Russell 2000 small-cap index (.RUT) fell 0.9%.

Tesla (TSLA.O) shares rose 2.9% after shareholders approved Elon Musk's $56 billion pay package.

Trading volume on U.S. exchanges was 10.14 billion shares, below the 20-day average of 12.49 billion.

European shares ended wider lower, with the auto sector particularly hard hit as investors worried about Beijing's retaliatory measures to the European Union's new tariffs on electric vehicles from China.

The pan-European STOXX 600 index (.STOXX) fell 1.31%, while MSCI's global share index (.MIWD00000PUS) lost 0.27%.

Emerging market shares rose 0.64%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.67%, while Japan's Nikkei (.N225) fell 0.40%.

U.S. 10-year Treasury yields fell on weak economic data.

Benchmark 10-year notes rose 13/32, sending yields down to 4.2442% from 4.295% late Wednesday.

30-year notes rose 27/32, sending yields down to 4.4% from 4.45% late Wednesday.

The dollar index (.DXY) rose 0.53%, while the euro fell 0.64% to $1.0738.

The Japanese yen weakened 0.22% against the greenback to hit $157.09 per dollar, while sterling was last at $1.2761, down 0.27% on the day.

Oil prices edged up amid choppy trading, with supply growth and a delayed Fed rate cut offset by economic data.

The price of U.S. crude oil rose 0.15% to $78.62 per barrel, while the price of Brent rose 0.18%, stopping at $82.75 per barrel.

Gold prices fell amid a stronger dollar after the release of the PPI report, which was weaker than expected. Spot gold lost 0.8%, reaching $2,303.15 per ounce.
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The main events by the morning: June 17

The Swiss conference on Ukraine turned out to be a «failure». 160 countries were invited to the summit. However, only 101 delegations participated – 78 countries signed the final communiqué, 15 refused. Armenia, Brazil, India, Saudi Arabia, Slovakia, South Africa and the UAE refused to sign the final declaration of the conference, which reflects Russia's economic strength and influence in the international arena.

Russia is facing big problems in importing Chinese goods. In June, the delivery time by sea and train increased to 55-60 days, which is a third higher than in May. The reason is the delayed demand: the situation with payments between the Russian Federation and the People's Republic of China began to improve, which led to a sharp increase in demand for logistics services. There are not enough containers and capacities, transport hubs do not have time to process everything, prices have increased by 30-40%.

The G7 countries will monitor and block the Russian «shadow fleet». The British Foreign Secretary said that the West intends to continue to provide full support to Ukraine and tighten existing sanctions, including blocking ships from the Russian shadow fleet.

NATO is discussing putting nuclear weapons on alert. Alliance Secretary General Jens Stoltenberg said it was necessary to demonstrate a nuclear arsenal in response to the growing threats from Russia and China. According to him, NATO should send a clear signal to its opponents, demonstrating its readiness to use nuclear weapons.

China has become a leader in the electric vehicle market. In 2023, every third new car in the country was electric. China accounted for about 60% of global electric vehicle sales, and demand continues to grow strongly. In a number of countries, the share of electric vehicles in total car sales exceeds 40%, and China will remain the leading player in this segment in the coming years.

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The main events by the morning: June 18

The 1992 agreement on the avoidance of double taxation with Russia has been suspended. This was stated by the US Treasury Department. There is no exact information yet, but the measure may affect the W8-BEN form, which reduces the tax on Russian dividends from companies from the United States from 30% to 13%. The suspension will take effect on August 16, 2024.

Sanctions on the Moscow Stock Exchange and its subsidiaries will not have a significant impact on the purchase by non-residents of blocked foreign securities of Russians, the Investment Chamber said. In fact, NSD was already under sanctions.

Foreign flowers may disappear from the Russian market. Russia plans to impose restrictions on the import of flowers from unfriendly countries due to the Rosselkhoznadzor's claims to the quality of their products.

Putin arrived in North Korea today. The Russian president ordered the signing of a Comprehensive Strategic Partnership Agreement with the DPRK.

Beer exports from the European Union to Russia are resuming. In April, the volume of beer exports to Russia amounted to 23 million euros, which is the highest since August last year.

In the context of the recovery of global coal exports, Russia is losing its share in this market. According to the calculations of the Price Index Center, Russian exporters already account for less than 14.6% of global supplies, compared to 17.1% in 2021.
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XAU/USD. Analysis and forecast. The price of gold has reached a new weekly high

Gold has updated its weekly high today, aiming to break through the resistance of the 50-day simple moving average SMA. Incoming macro data from the US point to signs of easing inflationary pressures and a slowdown in the US economy, increasing speculation that the Fed will cut interest rates twice this year. This is a key factor stimulating flows towards the unyielding yellow metal.

Plus, geopolitical tensions and renewed political uncertainty in Europe provide additional support for the precious metal as a safe-haven asset. Meanwhile, the Fed took a more hawkish stance last week, and policymakers continue to favor one rate cut in 2024. A good jump in US Treasury bond yields is also helping to increase demand for the US dollar, which may deter further price growth of the precious metal.

From a technical point of view, before opening new buy positions, bulls should still wait for a steady strengthening beyond the 50-day simple moving average SMA, which is currently around $2,345. The subsequent upward movement will mean that the recent corrective decline has exhausted itself, and the price will move beyond the $2,360 zone – into the supply zone, on the way to the $2,400 mark, with some intermediate obstacle in the $2,388 area. The momentum may extend further towards the historic high reached in May.

On the opposite side, the $2320-2325 area protects against an immediate decline before the round level of $2300. Some subsequent selling below this level and the $2,285 support will be seen as a new trigger for the bears, paving the way for a resumption of the recent pullback from the all-time high. Gold will then be ready to accelerate its decline to the $2,250 level before dropping completely to the $2,220 support and the round $2,200 level.
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From Record to Bust: How Chips and the Economy Shaped the S&P 500

The S&P 500 and Nasdaq ended lower Thursday as market leader Nvidia shares pulled back from earlier gains. Investors were poring over fresh economic data and Federal Reserve statements to see when interest rates might be cut this year.

Earlier, the S&P 500 hit 5,500 for the first time in history, in line with many brokerage firms' year-end forecasts. The Nasdaq ended a seven-day run of record closing highs.

Stocks on Wall Street retreated from early record highs despite gains in overseas benchmarks. U.S. Treasury yields rose on weak economic data and expectations of more bond issuance next week.

The dollar gained ground as U.S. yields rose, widening the gap with non-dollar rates that have been trending lower. It reached 160 yen, prompting Tokyo to intervene in late April to support its currency.

The Dow Jones Industrial Average was the only major index to hold on to gains. The S&P 500 (.SPX) and Nasdaq (.IXIC) extended a streak of intraday record highs before falling, with the Nasdaq ending a seven-session run of record highs at the close.

Disappointing housing starts and building permits data, as well as a report on jobless claims, suggest a gradual cooling in the labor market, confirming that the Fed's restrictive policies are having the intended effect.

"Weaker-than-expected economic data suggests that high and long-term interest rates are achieving the Fed's goals," said Greg Bassuk, CEO of AXS Investments in New York. "These signs of a slight slowdown in the economy will be welcomed by the Fed as they consider lowering interest rates."

That, coupled with the dovish sentiment expressed by the Bank of England, which has held off on easing ahead of the upcoming U.K. general election, and the Swiss National Bank's rate cut, has created room for the Fed to maneuver on the timing of its rate cuts.

Wall Street's rally was fueled by enthusiasm for artificial intelligence, led by chipmaker Nvidia (NVDA.O), which recently became the world's most valuable company by market capitalization. However, despite the morning gains, Nvidia shares fell about 2%.

Nvidia shares fell 3.54% after the morning gains. The chipmaker overtook Microsoft to become the world's most valuable public company on Tuesday.

Dell (DELL.N) and Super Micro Computer (SMCI.O) shares also fell 0.42% and 0.26%, respectively, after initially rallying on news that Elon Musk's AI startup had won server orders.

The number of Americans filing new jobless claims fell last week, but the latest data showed the total number of people receiving benefits reached its highest level since January, suggesting the U.S. labor market is continuing to cool.

Separately, data showed that U.S. single-family home starts fell in May, reflecting continued high mortgage rates.

The energy (.SPNY) and utilities (.SPLRCU) sectors were the biggest gainers among the 11 S&P 500 sector indexes, rising 1.86% and 0.89%, respectively, while the technology sector (.SPLRCT) led the declines.

Minneapolis Fed President Neel Kashkari said it would take a year or two for inflation to return to 2% as wage growth remains high, raising concerns that interest rates will remain elevated for a long time.

Money markets are pricing in a 58% chance of the U.S. central bank cutting rates by 25 basis points in September, according to LSEG FedWatch.

The Dow Jones Industrial Average (.DJI) rose 299.90 points, or 0.77%, to 39,134.76. The S&P 500 (.SPX) lost 13.86 points, or 0.25%, to 5,473.17 and the Nasdaq Composite (.IXIC) fell 140.64 points, or 0.79%, to 17,721.59.

Kroger (KR.N) shares fell 3.27% after the company expressed caution about near-term consumer spending while reiterating its full-year sales and profit forecasts despite beating first-quarter estimates.

Trump Media & Technology Group (DJT.O) shares fell 14.56%, weighed down by potential dilution after the U.S. Securities and Exchange Commission approved the company's application to resell certain shares and warrants, netting it about $247 million in proceeds.

European stocks were strengthened by the technology and real estate sectors, as well as gains in Swiss stocks after the central bank continued to ease monetary policy.

The STOXX 600 (.STOXX) index rose 0.93%, while the broader European FTSEurofirst 300 (.FTEU3) index rose 0.90%.

The MSCI Worldwide Equity Index (.MIWD00000PUS) hit a record high but ended the day down 0.15% at 803.89.

Emerging market stocks lost 0.06%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) ended the day down 0.16%, while Japan's Nikkei (.N225) rose 0.16%.

U.S. Treasury yields initially fell after the economic data, then began to rise again.

The market is eagerly awaiting an auction next week that will offer about $183 billion in two-, five- and seven-year U.S. Treasuries. Investors often sell Treasuries ahead of auctions to boost their yields and then buy them back at a lower price, a practice known as concessioning.

The benchmark 10-year U.S. yield has risen 3.7 basis points since late Tuesday to 4.254%. The 30-year yield has risen 3.7 basis points to 4.3908%. The yield on the two-year note, which is typically correlated with interest rate expectations, rose 2.7 basis points to 4.7308%.

The dollar index, which tracks the greenback against a basket of currencies including the yen and euro, rose 0.4% to 105.63, while the euro fell 0.34% to end the day at $1.0703.

The dollar strengthened against the Japanese yen to its highest since April 29, up 0.51% to 158.89 yen.

The British pound fell to a five-week low against the dollar, down 0.43% to last trade at $1.2662.

"When we talk about dollar strength, it feels like for the first time in a long time there's a divergence in global monetary policy... Fed spokespeople continue to talk about the need for patience and time," said Art Hogan, chief market strategist at B Riley Wealth in New York.

"The dollar is standing out in a weak competitive environment, particularly in Japan, which is making things worse," Hogan added.

U.S. crude oil prices rose 0.74% to $82.17 a barrel, while Brent crude rose 0.75% to $85.71 a barrel.

Spot gold rose 1.36% to $2,359.22 an ounce. U.S. gold futures rose 1.01% to $2,354.00 an ounce. In cryptocurrencies, Bitcoin rose 0.27% to $65,029.00, while Ethereum fell 0.47% to $3,534.8.

Declining issues outnumbered advancing issues on the NYSE by 1.03 to 1, with 248 new highs and 118 new lows.

The S&P 500 posted 31 new 52-week highs and 6 new lows. The Nasdaq Composite posted 39 new highs and 217 new lows.

Trading volume on U.S. exchanges totaled 11.98 billion shares, below the 20-day average of 13.51 billion shares.
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Hot forecast for EUR/USD on June 24, 2024

Eurozone business activity indices were expected to edge higher, while the US PMI data were forecasted to decrease slightly. But everything turned out completely different. The euro area PMI data decreased significantly. However, the US PMIs report showed a rise. So, it's not surprising that the dollar strengthened its position. Now, the market is shifting from macroeconomic news, which has been practically absent in the last week of the month, to the news background. Moreover, it's more political than economic. Traditionally, there is relatively little activity in the markets at this time. Most likely, we will see some kind of rebound, after which the market will hover slightly above the current levels.

EUR/USD ended last week below the 1.0700 level, thus reflecting bearish sentiment among traders. However, there were no crucial changes, and market volatility was quite average.

On the 4-hour chart, the RSI technical indicator is hovering in the lower range, which also indicates a bearish bias.

On the same time frame, the Alligator's MAs are still heading downwards.

Outlook
In case the euro weakens further, the price could move towards this year's low. However, if the quote closes above the 1.0700 level by the end of the day, then in this case, the 1.0700/1.0760 cycle may resume.

In terms of the complex indicator analysis, we see that in the short-term period, technical indicators are pointing to a bounce or a bullish bias. Meanwhile, in the intraday period, the indicators are reflecting a downward cycle.
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As the West Changes Investing Course, the East Reacts with Indexes Rising

The Dow hit a one-month high on Monday, while the Nasdaq fell more than 1% as investors switched from artificial intelligence stocks to laggards on expectations that the Federal Reserve will cut interest rates this year.

The S&P 500 and Nasdaq ended lower as investors shifted away from tech stocks, whose overextended gains have fueled this year's rally. However, nine of the 11 major S&P 500 industries rose.

Shares of Nvidia (NVDA.O) have fallen 6.68% in three sessions as observers noted profit-taking after last week's meteoric rise made the company the world's most valuable.

Nvidia's decline triggered a sell-off in the tech sector, leading to significant losses. On Monday, the S&P 500 (.SPX) was down 0.3%, the Nasdaq (.IXIC) was down more than 1%, and the SOX semiconductor index (.SOX) lost more than 3%.

Other chipmakers, including Taiwan Semiconductor Manufacturing, Broadcom (AVGO.O), Marvell Technology (MRVL.O) and Qualcomm (QCOM.O), fell 3.53% to 5.7%, leading the SOX index to fall 3.02%.

"The market is selling some winners and buying some laggards," said Jack Janasiewicz, chief strategist at Natixis Investment Managers. "This is due to expectations of soft inflation data coming out on Friday."

Tech (.SPLRCT) and consumer discretionary were the only sectors among the 11 S&P 500 indexes to decline, while energy led the gains, rising 2.73%.

"There's a rotation into value sectors like financials, energy and utilities. Energy is also benefiting from a small jump in oil prices," said Ed Clissold, chief U.S. strategist at Ned Davis Research.

Oil prices rose Monday, supporting gains in energy and oilfield services stocks.

The Dow Jones Industrial Average (.DJI) jumped to snap a five-day winning streak. The Russell 2000 small-cap index (.RUT) also hit a one-week high, signaling broader gains in the market.

With the exception of Nvidia and other chipmakers, "the rest of the market is positive, expecting a soft landing," said Carl Ludvigson, managing director at Bel Air Investment Advisors.

Investors are focused this week on Friday's PCE price index report, the Fed's preferred measure of inflation, which is expected to show modest price pressures.

Investors still expect two rate cuts this year, pricing in a 61% chance of a 25 basis point cut in September, according to FedWatch LSEG data. The Fed's latest forecast calls for one rate cut in December.

San Francisco Fed President Mary Daly has said she doesn't think rates need to be cut until policymakers are confident that inflation is approaching 2%.

The S&P 500 (.SPX) lost 15.73 points, or 0.29%, to end at 5,448.89. The Nasdaq Composite (.IXIC) fell 190.19 points, or 1.09%, to 17,499.17. The Dow rose 257.99 points, or 0.66%, to 39,408.32.

Other big stories this week include durable goods data, weekly jobless claims, final first-quarter GDP data and a year-over-year rebound in the Russell Index. There will also be some quarterly earnings reports.

President Joe Biden and his Republican rival Donald Trump will debate in Atlanta on Thursday, which could impact the outcome of the November election, which polls show is neck-and-neck.

Meta Platforms (META.O) shares rose after a report that the Facebook parent is discussing integrating its generative AI model into Apple's (AAPL.O) new iPhone AI system. Apple shares also rose.

RXO (RXO.N) announced plans to buy United Parcel Service (UPS.N) and launch a new unit, Coyote Logistics, for $1.025 billion.

Advance stocks outnumbered decliners 2.25-to-1 on the New York Stock Exchange, with 179 new highs and 48 new lows.

The S&P 500 posted 35 new 52-week highs and one new low, while the Nasdaq Composite posted 49 new highs and 128 new lows. Trading volume on U.S. exchanges was 10.94 billion shares, below the 11.92 billion average over the past 20 trading days.

European stocks may see some recovery on Tuesday after their rally earlier in the week.

The tech loss has turned into a gain in value, as seen in the Dow Jones Industrial Average (.DJI), which is up 0.7%.

This rotation has also become relevant in Asia. For example, AI-related stocks on Japan's Nikkei 225, such as SoftBank Group (9984.T), are retreating from their highs, while money is returning to the battered Toyota Motor (7203.T).

The positive news for investors is the overall gain in Asia-Pacific stock indices. Among the major indices, only tech-heavy Taiwan (.TWII) showed a decline. While the Nikkei (.N225) is up just half a percent, the Topix (.TOPX) is up almost 1.5%.

Geopolitics also requires attention. The mood could change quickly ahead of the first round of snap elections in France this weekend. So far, the far-right's efforts have been effective in calming fears of financial restraint.

As a result, the euro has rebounded sharply to $1.0740 after falling to $1.0671 on Friday.

Also worth watching is the European Commission's evolving relationship with Apple and China. Beijing is calling on the EU to scrap proposed tariffs on Chinese electric vehicle imports before they come into effect on July 4, and Chinese officials are seeking a compromise in talks in Brussels this week.

Apple needs to change how its App Store works or face large antitrust fines.
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Wall Street: Modest gains, choppy trading ahead of inflation data

The major U.S. stock indexes ended Wednesday slightly higher after choppy trading. Investors took a wait-and-see approach ahead of the presidential debate and a key inflation report closely watched by Federal Reserve officials.

"We're in a holding pattern as we wait for Friday's PCE report for more data," said Michael Green, portfolio manager at Simplify.

Shares of chipmaker Nvidia (NVDA.O) rose 0.25%, ending the session higher after earlier losses. Large-cap names such as Apple (AAPL.O), Amazon (AMZN.O) and Tesla (TSLA.O) also saw their shares rise.

A flurry of economic data is due out this week, culminating in Friday's Personal Consumer Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge and a key driver of monetary policy decisions.

The Federal Reserve is forecasting one interest rate cut in December. However, investors are pricing in a 56.3% chance of a 25 basis point rate cut in September, according to LSEG's Interest Rate Probabilities app, and expecting about two cuts by the end of the year.

By 4 p.m., the Dow Jones Industrial Average (.DJI) was up 16.10 points, or 0.04%, to 39,128.26. The S&P 500 (.SPX) was up 8.61 points, or 0.16%, to 5,477.91, and the Nasdaq Composite (.IXIC) was up 87.50 points, or 0.49%, to 17,805.16.

"Investors are holding off for now, waiting for tomorrow's presidential debate and more economic data, especially Friday's PCE report," said Sam Stovall, chief investment strategist at CFRA.

Strong earnings reports and favorable inflation data could fuel a shift away from tech stocks and into sectors that have underperformed this year, according to Ryan Detrick, chief market strategist at Carson Group.

Investors have been flocking to non-tech sectors this week.

"We're likely to see continued volatility until we get a catalyst," said Brian Jacobsen, chief economist at Wealth Management.

Shares in appliance maker Whirlpool (WHR.N) rose 17.1% after news broke that German engineering group Robert Bosch may buy the company.

FedEx (FDX.N) shares soared 15.53% after the company announced that its fiscal 2025 profit forecast would beat expectations, sending the Dow Jones Transport (.DJT) to its highest level in more than a month.

Apple (AAPL.O) shares rose nearly 2% after analysts at Rosenblatt upgraded the iPhone maker's stock to buy from neutral. Meanwhile, Tesla shares rose 4.81% after Stifel began coverage of the company with a buy rating.

Amazon.com Inc's (AMZN.O) market value reached $2 trillion for the first time on Wednesday, becoming the fifth U.S. company to do so. Optimism about artificial intelligence and expectations of possible interest rate cuts this year have fueled demand for tech stocks.

Amazon shares rose 3.4% to $192.70, pushing the e-commerce giant's market value past $2 trillion. That puts it in line with tech giants Microsoft Corp (MSFT.O), Apple Inc (AAPL.O), Nvidia Corp (NVDA.O) and Alphabet Inc (GOOGL.O).

Shares of Amazon, which were added to the Dow Jones Industrial Average (.DJI) in February, have gained more than 26% year to date. In February, the company became the fifth-largest U.S. company by market value after Nvidia climbed one spot.

Amazon Web Services, the world's largest cloud services provider, has seen growth again after a slump last year, thanks to accelerated adoption of artificial intelligence technologies.

Amazon has also invested in AI startup Anthropic and robotics company Fig, looking to capitalize on the rapidly growing interest in artificial intelligence.

Late last year, Amazon unveiled a new generation of custom-designed data center chips that are aimed at machine learning and generative AI applications.

Shares of major U.S. banks including Morgan Stanley (MS.N), Citigroup (C.N) and Bank of America (BAC.N) fell ahead of the Federal Reserve's annual stress test results.

The broader S&P 500 (.SPSY) fell 0.47%.

Rivian (RIVN.O) shares rose 23.24% after German automaker Volkswagen (VOWG_p.DE) announced plans to invest up to $5 billion in the U.S. electric vehicle maker.

General Mills (GIS.N) shares fell 4.59% after the Cheerios cereal maker reported below-expected full-year profit and a bigger-than-expected drop in quarterly sales.

Declining stocks outnumbered advancing stocks on the New York Stock Exchange (NYSE) by a 1.41-to-1 ratio. Overall, the NYSE posted 106 new highs and 89 new lows.

The S&P 500 posted 10 new 52-week highs and 6 new lows, while the Nasdaq Composite posted 41 new highs and 171 new lows.

Trading volume on U.S. exchanges totaled 10.59 billion shares, below the 20-day average of 11.83 billion shares.
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The main thing in the morning: June 28

LNG supplies from the United States to Europe have declined sharply, which could cause a serious blow to the EU economy. Since the beginning of 2024, the volume of liquefied natural gas supplies from the United States has decreased by about a third. Given the current sanctions against Arctic LNG-2 and possible restrictions on other Russian plants, the situation may lead to a shortage of gas.

The first debate between Donald Trump and Joe Biden took place. CNN organized the presidential candidates' election debate, where the former president and the current president refused to shake hands. The main focus was on the conflict in Ukraine: Biden warned that Moscow's capture of Kiev could provoke World War III, and Trump blamed Biden for the situation.

The Estonian Parliament will not be able to help the government in confiscating frozen Russian assets. The fact is that there is no property in the country that is subject to automatic confiscation in favor of Ukraine. According to the Estonian Foreign Ministry, property worth €37-39 million was blocked in the country.

The IMF forecasts the growth of the US national debt to 140% of GDP by 2032. The organization's report highlights the need to urgently stop the growth of borrowing, as the US budget deficit remains at 2.5% of GDP. This creates increasing problems for the global economy.

NOVATEK continues to build Arctic LNG 2 despite the severe pressure of sanctions. The foundation of the second line and the first structures will begin to be laid on July 23-25. The previously imposed sanctions led to a big shift in the launch schedule of Arctic LNG 2 and the cancellation of the construction of 1 of the 3 lines. Problems with LNG tankers are added to this.
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Trump in Focus: Markets Assess Impact, Bonds Fall, Dollar Steady

The dollar was flat on Monday, while long-term U.S. Treasury yields rose as investors weighed whether an assassination attempt on presidential candidate Donald Trump could boost his chances of winning.

European stock markets opened lower after weak economic data from China left a cautious mood. Additionally, negative news from British luxury brand Burberry and watchmaker Swatch Group raised questions about consumer confidence.

Investors typically react to the prospect of a Trump victory by pushing up Treasury yields, assuming his economic policies will lead to higher inflation and government debt.

On online betting platform PredictIT, the odds of a Republican victory rose to 67 cents, up from 60 cents on Friday. The yield on the benchmark 10-year Treasury note rose 2 basis points to 4.208% on Monday.

Eren Osman, managing director of asset management at Arbuthnot Latham, said a possible Trump victory would be viewed positively for risk assets. He pointed to the significant gains in Bitcoin since the weekend, but added a note of caution.

"You could imagine that this would motivate Trump supporters to go to the polls, but they were probably planning to vote anyway," Osman said.

U.S. retail sales data due on Tuesday will be closely watched to understand the health of the consumer sector after recent readings suggested economic growth was slowing, the expert said.

The dollar index rose modestly to 104.9, helped by the greenback's strength against the yen, which rose 0.17% to 157.855 after last week's intervention was expected.

The euro was down slightly at $1.0907, while Bitcoin, which has likely benefited from looser regulation under the Trump administration, rose about 5% to a two-week high.

European stocks were down 0.2% (STOXX), while S&P 500 and Nasdaq futures were up about half a percent. Japan's Nikkei was closed for a holiday.

The weak economic data set off a busy week in China, where the five-yearly meeting of top officials is taking place from July 15 to 18.

China's second-quarter economic growth was 4.7% from a year earlier, short of analysts' forecast of 5.1%. Consumer spending is a particular concern, with retail sales growth falling to an 18-month low and new home prices falling at their fastest pace in nine years.

"Markets are hoping for more support for the weak economy and struggling property sector to be announced at this week's plenary," said Vasu Menon, managing director of investment strategy at OCBC in Singapore.

China's onshore yuan remained under pressure, trading at 7.2742 per dollar. Mainland Chinese shares (.SSEC) were little changed, while Hong Kong's Hang Seng Index (.HSI) was down 1.5%.

The week will see data on retail sales, industrial production, housing starts and weekly jobless claims released in the United States.

Federal Reserve Chairman Jerome Powell is scheduled to speak at the Economic Club of Washington on Monday, where his response to the recent muted inflation data is likely to be discussed.

Markets are pricing in a 96% chance of a Fed rate cut in September, up from 72% a week earlier.

The European Central Bank is expected to leave its current interest rate unchanged after cutting it in June.

"We expect the ECB to keep rates on hold at its July meeting, with a press conference to discuss the rate trajectory and the situation in France," Morgan Stanley said in a note.

The second-quarter earnings season kicked off last week and continues on Monday with Goldman Sachs' earnings results.

Bank of America, Morgan Stanley, ASML and Netflix Inc. are also set to report earnings this week. Wall Street is expecting strong results for the period, with most of those expectations already factored into current stock valuations.

In commodities markets, gold traded at $2,408 an ounce, slightly below last week's high of $2,424.

Oil prices edged higher after Friday's slide on signs of progress in ceasefire talks between Israel and Hamas.

Brent crude was little changed at $85.04 a barrel, while U.S. crude rose 0.1% to $82.27 a barrel.

Fed Chair Powell to Speak

Federal Reserve Chair Jerome Powell will be interviewed by David Rubenstein at the Economic Club of Washington, followed by a question-and-answer session.

In his final appearance on Capitol Hill, Powell emphasized the Fed's efforts to combat inflation and reaffirmed its commitment to its dual mandate of price stability and maximum employment.

He also expressed cautious optimism about inflation trends, indicating some confidence that inflation will decline toward the 2% target. However, Powell stressed that it is too early to say whether the trend toward the 2% inflation target will be sustainable.
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Investors lift market on Trump, rate cuts

Wall Street ended higher on Monday, extending Friday's gains, as expectations grew for a second term for Donald Trump after a failed assassination attempt raised hopes for looser regulation.

Expectations that the Federal Reserve could cut its key interest rate as early as September also helped boost risk appetite among investors.

While all three major U.S. stock indexes closed well below their intraday highs, the Dow Jones Industrial Average hit a record close.

Small, economically sensitive stocks (.RUT) and transportation stocks (.DJT) have outperformed the broader market.

The assassination attempt on Trump, the presumptive Republican presidential nominee, on Saturday in Pennsylvania appears to have boosted his chances of being elected.

A Trump presidency is expected to usher in more aggressive trade policies, further tax cuts, and deregulation in areas ranging from climate change to cryptocurrencies.

"The main event — the assassination attempt on Donald Trump — hasn't quite hit its mark," said Sam Stovall, chief investment strategist at CFRA Research in New York. "GDP forecasts are unchanged, expectations for a Fed rate cut in September are unchanged, and corporate earnings are ahead of expectations."

"So the market momentum remains driven by investor optimism," Stovall added.

Investor sentiment was also supported by expectations that the Federal Reserve will begin a rate-cutting cycle as early as September, with as many as three cuts possible before the end of the year.

"A rate cut in September is virtually guaranteed," said Ross Mayfield, an analyst at Baird Investment Strategy in Louisville, Kentucky. "We're in the same position we were seven months ago, which is the promise of a Fed rate cut without the risk of a recession. But there's still a lot riding on the Fed's actions."

Speaking to the Economic Club of Washington, Fed Chairman Jerome Powell reiterated his confidence that the U.S. economy can avoid a recession, with recent data showing progress in bringing inflation back to the central bank's 2% target.

The Dow Jones Industrial Average (.DJI) rose 210.82 points, or 0.53%, to 40,211.72. The S&P 500 (.SPX) rose 15.87 points, or 0.28%, to 5,631.22, while the Nasdaq Composite (.IXIC) rose 74.12 points, or 0.40%, to 18,472.57.

Among the 11 major sectors in the S&P 500, energy stocks (.SPNY) posted the biggest percentage gains, while utilities (.SPLRCU) lagged.

Goldman Sachs (GS.N) more than doubled its second-quarter profit, beating analysts' expectations on solid performance in debt insurance and fixed-income trading. The brokerage's shares rose 2.6%.

Macy's Inc (MN) shares fell 11.7% after the department store ended buyout talks with Arkhouse Management and Brigade Capital.

The prospect of a second term for Donald Trump sent shares of Trump Media & Technology Group (DJT.O) soaring 31.4%.

Cryptocurrency stocks also saw significant gains, with Coinbase Global (COIN.O), Marathon Digital Holdings (MARA.O) and Riot Platforms (RIOT.O) all rising between 11.4% and 18.3%.

Other stocks that would likely benefit from a possible second Trump term also saw gains, with gun maker Smith & Wesson (SWBI.O) and correctional facility operator GEO Group (GEO.N) up 11.4% and 9.3%, respectively.

Meanwhile, solar energy stocks fell as the prospect of a Trump election dampened expectations for U.S. renewable energy subsidies. Sunrun (RUN.O) and SolarEdge Technologies (SEDGO.O) fell 9.0% and 15.4%, respectively.

U.S.-listed Chinese stocks also fell on concerns about tighter trade restrictions under the new Trump administration. The iShares China Largecap ETF fell 2.2%.

On the New York Stock Exchange, gainers outnumbered losers 1.35-to-1; on the Nasdaq, gainers outnumbered losers 1.50-to-1.

The S&P 500 posted 65 new 52-week highs and four new lows.

The Nasdaq Composite Index posted 203 new highs and 33 new lows. Trading volume on U.S. exchanges totaled 11.07 billion shares, slightly below the 20-day average of 11.59 billion shares.

Long-term U.S. bond yields rose on speculation that Trump's policies will lead to higher government debt and inflation. Meanwhile, cryptocurrency stocks rose along with Bitcoin as Trump casts himself as a cryptocurrency advocate.

Investors expect a Trump victory to lead to further tax cuts and regulatory easing. The energy-heavy S&P 500 (.SPNY) gained 1.6%.

Traders are also betting on a second and possibly third rate cut by December.

The MSCI Global Equity Index (.MIWD00000PUS) rose 0.18 points, or 0.02%, to 828.73, while the STOXX 600 Index (.STOXX) fell 1.02%.

Bad news from British luxury giant Burberry, with a CEO replacement and dividend suspension, and a 14.3% revenue decline at Swiss watchmaker Swatch Group, raised questions about consumer confidence.

The dollar index, which measures the greenback against a basket of major currencies, was down 0.04% at 104.25, while the euro was down 0.01% at $1.0893. Against the Japanese yen, the dollar was up 0.02% at 158.04.

The dollar fell to 157.15 during Powell's speech, its lowest since June 17, before recovering.

Bitcoin was up slightly after earlier hitting a three-week high of $63,838.86.

The yield on 10-year U.S. Treasuries rose 4 basis points to 4.229%, while the yield on two-year Treasuries fell half a basis point to 4.4554%.

Oil prices were slightly lower as concerns about demand in China, the world's largest importer, offset support from OPEC+ supply cuts and ongoing tensions in the Middle East.

U.S. crude was down 30 cents at $81.91 a barrel, while Brent crude was down 18 cents at $84.85 a barrel.
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The main events by the morning: July 17

The return of Donald Trump to the White House may lead to the easing of sanctions against Russia. On the second day of the Republican congress, the ex-president spoke out against the sanctions, considering them detrimental to US international relations. In his opinion, such measures only alienate other countries.

Dedollarization is gaining momentum, affecting almost half of the world's countries. Over the current year, 6 more countries have joined the movement aimed at weakening the dominance of the dollar in the global economy. As a result, the number of countries participating in dedollarization reached 81. Of these, 50 actively oppose the hegemony of the dollar, and 31 countries switch to settlements in national currencies or restrict the use of the dollar in their domestic operations.

China and Brazil's plan to resolve the conflict in Ukraine is gaining supporters. The peace initiative of China and Brazil on Ukraine is receiving more and more support. Already, 50 countries and international organizations have joined the proposed settlement plan for the Ukrainian crisis. Chinese Ambassador to Russia Zhang Hanhui noted that within the framework of the initiative, it is planned to convene an international peace conference, which both sides of the conflict – Russia and Ukraine – are ready to join.

Russia and China are developing options for integrating payments through Mir cards. According to Chinese Ambassador to the Russian Federation Zhang Hanhui, this can help attract tourists from the Russian Federation, improve their conditions of stay, and also allow linking foreign bank cards to Chinese payment platforms.

Trump said Taiwan should pay for its protection. In an interview with Bloomberg Businessweek, the Republican candidate stressed that the United States currently acts as a kind of insurance company, while Taiwan does not provide anything in return.
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XAU/USD. Review and analysis

Today, the price of gold continues its decline.

The US dollar, recovering confidently from the previous day's four-month low and slowly rising, has become the main factor dragging the commodity down for the third consecutive day.

In addition, some profit-taking, especially after the recent rise of more than 6.5% since the beginning of the current month, further contributes to the decline. However, the potential for further decline is limited. Investors are likely convinced that the Federal Reserve will start lowering borrowing costs in September, with the possibility of two more rate cuts by the end of the year. This keeps the yield on US Treasury bonds defensive and limits the appreciation of the US dollar.

However, the tendency to avoid risk amid current market conditions could support gold as a safe-haven asset. Additionally, geopolitical tensions and demand from central banks should help limit significant declines in the price of non-yielding yellow metal.

From a technical perspective, any further decline will find decent support around $2413-2412, just before the round level of $2400. This is followed by a horizontal breakthrough point at $2390-2388, triggering technical selling in case of a decisive break. The precious metal will then accelerate its decline to test the 50-day simple moving average (SMA), which is currently near the $2358-2357 area. A sustained decline below this level will expose the 100-day SMA near the $2311 zone, with intermediate support around $2330.

On the other hand, the Asian session high of around $2445 now serves as an immediate obstacle, above which the yellow metal may rise to $2469-2470 – the high of the American session. Given that the oscillators on the daily chart remain comfortably in positive territory, bulls may attempt to retest the historical high around $2483-2484 and reach the psychological mark of $2500.
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Friday and Biden Weekend: Fiscal Week Outlook

Wall Street opened the morning with news that came as no surprise: President Joe Biden announced his withdrawal from the presidential race. The market reacted mutedly to the news, with Wall Street futures slightly higher, bond yields slightly lower, and the dollar virtually unchanged.

Biden has thrown his support behind his Vice President Kamala Harris, giving her a lead position for the nomination at the Democratic National Convention, which runs from August 19 to 22. It is also possible that the party may consider a virtual nomination before the convention.

According to online betting site PredictIT, the price for Donald Trump to win has fallen 5 cents to 59 cents, while the price for Harris has increased 13 cents to 40 cents. California Governor Gavin Newsom, another possible Democratic candidate, is still behind at 3 cents.

Goldman Sachs said in a report that it does not expect significant changes in the Democrats' fiscal and trade policies if Harris wins.

Back to Friday's events.

U.S. stocks continued to decline on Friday as chaos continued to rage around a global software outage, adding further uncertainty to an already volatile market.

Massive technology disruptions have hit industries including aviation, banking and healthcare after a software bug at Crowdstrike (CRWD.O) disrupted Microsoft's (MSFT.O) Windows operating system.

While the vulnerability has been identified and fixed, some services continue to experience technical difficulties.

Crowdstrike shares fell 11.1%, while rival cybersecurity companies Palo Alto Networks (PANW.O) and SentinelOne (S.N) rose 2.2% and 7.8%, respectively.

All three major U.S. stock indexes ended in the red, with the Dow Jones Industrial Average the hardest hit.

On a weekly basis, the Nasdaq and S&P 500 posted their worst performances since April, while the Dow, which had hit records earlier in the week, rose Friday to Friday.

"This tech disruption adds an element of uncertainty and weighs on the Nasdaq as a whole," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "But overall it won't have a huge impact. Some buying will be delayed. Plus, it's a summer Friday, and the downtime is making investors take a wait-and-see attitude."

The CBOE Volatility Index (.VIX), often seen as a gauge of investor anxiety, hit its highest since late April. Small-cap stocks in the Russell 2000 (.RUT), which had previously benefited from a decline in interest in Big Tech, ended the day slightly lower.

Nvidia (NVDA.O) was the biggest decliner among chip stocks. The Philadelphia SE Semiconductor Index (.SOX) was among the laggards, down 3.1%.

In addition, New York Federal Reserve President John Williams reiterated that the central bank remains committed to reducing inflation to its 2% target.

According to CME's FedWatch tool, the chances that the Fed will begin cutting rates after its September meeting are estimated at 93.5%.

The Dow Jones Industrial Average (.DJI) fell 377.49 points, or 0.93%, to 40,287.53. The S&P 500 (.SPX) fell 39.59 points, or 0.71%, to 5,505. The Nasdaq Composite Index (.IXIC) lost 144.28 points, or 0.81%, to 17,726.94.

Among the 11 major sectors in the S&P 500, energy (.SPNY) was the biggest decliner, while health care (.SPXBK) and utilities (.SPLRCU) were up.

The second-quarter earnings season ended in the first full week of August, with 70 S&P 500 companies reporting results. Of those, 83% beat analysts' estimates, according to LSEG.

Analysts now forecast that the S&P 500 will post 11.1% annualized earnings growth, up from the previous estimate of 10.6% on July 1.

Next week brings big earnings from Tesla (TSLA.O), Alphabet (GOOGL.O), IBM (IBM.N), General Motors (GM.N), Ford (F.N) and many more.

"Earnings season is just getting started, but the results are already impressive," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. "With a lot of big companies reporting next week, we want to hear how strong the consumer is and what the outlook for future economic growth is."

Eli Lilly (LLY.N) shares rose 1.0% after China approved its weight-loss drug tirzepatide. Meanwhile, Intuitive Surgical (ISRG.O) shares rose 9.4% on better-than-expected second-quarter results.

Travelers (TRV.N) shares fell 7.8% on weaker-than-expected net premium growth.

Netflix (NFLX.O) fell 1.5% in choppy trading after warning that third-quarter subscriber growth would be weaker than last year.

Oilfield services company SLB (SLB.N) rose 1.9% on strong second-quarter earnings.

Declining stocks outnumbered advancing ones on the NYSE by a 2.11-to-1 ratio; on the Nasdaq, decliners outnumbered decliners by a 1.91-to-1 ratio.

The S&P 500 posted 27 new 52-week highs and four new lows, while the Nasdaq Composite posted 50 new highs and 99 new lows. Volume on U.S. exchanges totaled 10.54 billion shares, below the 11.72 billion average over the past 20 trading days.

Last week saw a significant investor shift away from big tech companies to smaller companies and banks, resulting in a loss of about $900 billion in the S&P 500 tech sector.

The pullback was not surprising, given that giants like Alphabet (GOOGL.O), Tesla (TSLA.O), Amazon.com (AMZN.O), Microsoft (MSFT.O), Meta Platforms (META.O), Apple (AAPL.O) and Nvidia (NVDA.O) have accounted for about 60% of the S&P 500's gains this year.

That situation has set the stage for strong second-quarter results, including from mega-caps like Tesla and Google parent Alphabet.

Expectations are high, with full-year earnings expected to rise 17% in tech and 22% in communications.
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Hot forecast for EUR/USD on July 23, 2024

Without any economic or political news, the market has literally come to a standstill. Today's situation is somewhat similar, as aside from the secondary housing market data, the economic calendar is almost empty. Moreover, housing reports have a feeble impact. However, according to multiple statements, US President Joe Biden may address the nation today. He is expected to officiallyendorse Kamala Harris as the Democratic Party candidate. It seems that the incumbent vice president will be the one to challenge Donald Trump. The key point here is that the Democratic Party has quickly settled on its candidate, which significantly reduces political risks. This could potentially support the dollar.

The EUR/USD pair has stalled just below the 1.0900 level, while the corrective cycle from the lower range of the psychological level of 1.0950/1.1000 remains intact.

On the 4-hour chart, the RSI indicator is moving in the lower area, indicating an increase in the volume of short positions on the euro.

As for the Alligator indicator in the same time frame, the lines are intertwined, meaning that the upward cycle is slowing down.

Outlook
To support the bearish bias, the quote must settle below the 1.0860 level. In this scenario, the euro could move towards the 1.0800 level. The bullish scenario will come into play if the price returns above the 1.0900 level.

Complex indicator analysis suggests a correction in the short-term and intraday time frames.
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Tech Profits Fail to Save Wall Street from Declines

Wall Street's major indices ended the session marginally lower on Tuesday, erasing modest intraday gains in the final minutes of trading as investors looked to fresh earnings reports from Alphabet (GOOGL.O) and Tesla (TSLA.O).

The so-called "Magnificent Seven" companies reported results after the market closed, posting positive financial results for the second quarter.

Tesla surprised analysts with an unexpected revenue gain, delivering more cars than expected on the back of price cuts and incentives. Meanwhile, Alphabet beat revenue estimates, helped by higher digital ad sales and strong demand for its cloud services.

However, ahead of the earnings call, Tesla shares fell 2%, while Google's parent company rose 0.1%.

The tech giants' financial results are critical to understanding whether they can sustain their record growth in 2024 or whether U.S. stocks are overvalued. Investors are also concerned about whether the shift away from mega-caps to less-efficient sectors will continue.

The Russell 2000 small-cap (.RUT) rose 1% on the day.

"We're focusing on earnings because that's what's going to be the story this week and next, and the market's reaction to those numbers will be very telling," said Jack Janasiewicz, chief portfolio strategist at Natixis Investment Managers.

Speaking about the shift in focus in smaller-cap stocks, the expert added: "The jury is still out on this and we need more evidence that this is sustainable, which again comes down to earnings."

Big-cap stocks initially supported the markets on Tuesday, with all three benchmark indexes in positive territory. However, while the likes of Apple (AAPL.O), Microsoft (MSFT.O) and Amazon.com (AMZN.O) rose between 0.3% and 2.1%, the overall market rally slowed in the afternoon, leading to a slight decline in the final results.

Stock markets were also under pressure from disappointing earnings from big-name companies.

United Parcel Service (UPS.N), a leading indicator of the health of the global economy, fell 12.1% after earnings fell short of expectations amid weaker delivery demand and rising labor costs. UPS shares ended the day at their lowest in four years.

General Motors (GM.N) fell 6.4% despite reporting strong second-quarter results and raising its full-year profit forecast. Comcast (CMCSA.O) lost 2.6% after disappointing revenue data.

NXP Semiconductors (NXPI.O) fell 7.6% after reporting third-quarter revenue that missed expectations, dragging the Philadelphia SE Semiconductor (.SOX) index down 1.5%.

Spotify (SPOT.N) jumped 12% after reporting record quarterly profit that slightly beat analysts' expectations. Coca-Cola (KO.N) also rose 0.3% after raising its full-year sales and profit forecasts.

Of the first 74 S&P 500 companies to report quarterly results this season, 81.1% beat estimates, according to LSEG.

Yanasevich noted that while it's too early to draw definitive conclusions, the current earnings call shows that companies that miss expectations are suffering greatly, even if their results are generally positive. High market prices and expectations don't always guarantee significant stock gains.

"If your results don't meet expectations, the punishment may be more severe given current market conditions," he added.

The S&P 500 (.SPX) fell 8.67 points, or 0.16%, to 5,555.74. The Nasdaq Composite (.IXIC) fell 10.22 points, or 0.06%, to 17,997.35. The Dow Jones Industrial Average (.DJI) lost 57.35 points, or 0.14%, to 40,358.09.

Eight of the S&P's 11 major sectors ended the day in the red, with energy (.SPNY) the worst performer, down 1.6% as U.S. oil prices fell to a six-week low.

Trading volume on U.S. exchanges totaled 10.45 billion shares, below the 20-day average of 11.33 billion.

The Federal Reserve's core consumer spending index, the benchmark inflation gauge, is due out Friday. The yield on the benchmark 10-year Treasury note fell 0.9 basis point to 4.251%.

"The market is now at a stage where we need real results to confirm the rally," said Wasif Latif, chief investment officer at Sarmaya Partners.

The MSCI World Share Index (.MIWD00000PUS) was down 0.06% at 816.37. On Wall Street, all three major indexes gave up their morning gains to end lower, led by losses in energy and utilities.

The pan-European STOXX 600 (.STOXX) was up 0.13%, led by gains in tech. In Asia, the MSCI Asia-Pacific Index outside Japan (.MIAPJ0000PUS) ended 0.30% higher at 566.92.

"We have seen a strong rally this year, with a lot of positives already built into it, including earnings and rate cuts," Latif added.

Vice President Kamala Harris will campaign in the battleground state of Wisconsin on Tuesday after winning the majority of delegates to the Democratic National Convention, strengthening her position as the party's presumptive nominee.

The U.S. dollar was broadly stronger, while the yen extended gains against the greenback for a second straight day.

The dollar index, which tracks the dollar against a basket of major currencies, rose 0.14% to 104.45. The euro was down 0.37% at $1.0849, while the yen gained 0.9% against the dollar to 155.63 yen per dollar.

Crude oil prices fell about 2% to a six-week low on rising expectations for a Gaza ceasefire and growing concerns about Chinese demand. Brent crude futures were down 1.7% to settle at $81.01 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 1.8% to settle at $76.96 a barrel.

Gold was up, with spot prices up 0.43% to $2,407.87 an ounce. U.S. gold futures were also up 0.43% to settle at $2,402.40 an ounce.

Bitcoin, which had earlier risen on expectations that a potential Trump administration would be more lenient on cryptocurrency regulations, was down 3.60% to $65,698. Ethereum was also down 0.48% to settle at $3,473.
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US Election: How Uncertainty Impacted Markets and Trillions of Dollars Escaped from Stocks

"Markets have a strong aversion to uncertainty, and with the polls close to 50-50, it's as uncertain as it gets," said Ross Yarrow, managing director of U.S. equities at investment bank Baird.

Wall Street's S&P 500 (.SPX) fell 2.3% on Wednesday, its biggest one-day loss since December 2022, as Big Tech, which accounts for a significant portion of U.S. and global indexes, fell. The decline continued Thursday morning, spreading to European markets.

Investors, wary of further selling, have turned to small-cap stocks, UK assets and gold as possible safe havens.

Of particular concern to global markets is the possibility that competition for votes on big spending plans could lead to potential turmoil in the US debt market, weighing on global stocks and bonds whose value depends on long-term Treasury yields.

The 30-year US Treasury yield rose above the two-year yield last week as big investors began to shy away from long-term US credit risk as the budget deficit widened to nearly $2 trillion.

Emerging market stocks and bonds have come under pressure from President Trump's proposed tariff hikes, said Adam Norris, a multi-manager at Columbia Threadneedle. Higher tariffs are having a negative impact on the economies and currencies of exporting countries.

Stock market volatility (.VIX) has started to rise from its lows as traders shift between stock sectors based on the changing election odds.

Tech stocks from the U.S. to Amsterdam have felt the pressure after Trump proposed earlier this month to cut U.S. support for Taiwan, a key link in the chip supply chain.

Meanwhile, the Russell 2000 index of U.S. small-caps (.RUT) has risen on expectations that Trump's growth policies will favor domestically focused companies over global tech giants.

The rotation could end, however, if tech or consumer stocks heavily dependent on Chinese supply chains rise as Trump falls in the polls.

Benjamin Mehlman, chief investment officer at Edmond de Rothschild Asset Management, expressed caution on European exporters due to potential tariff risks if Trump wins, preferring to invest in smaller, less global European companies.

Now on to global financial news.

More than $3 trillion has been pulled out of global equities in recent days.

Stock markets plunged into a multi-trillion-dollar slump on Thursday as a slide in global tech stocks sent investors seeking refuge in traditionally safe havens like bonds, the yen and the Swiss franc.

Europe's biggest bourses opened the day down more than 1% as traders in Europe and Asia reacted to the Nasdaq's worst day since 2022 (.IXIC) on Wednesday following disappointing earnings reports from giants Alphabet and Tesla.

Chinese stocks, iron ore and oil prices also extended their losses after a surprise move by China's central bank to cut long-term interest rates added to concerns about the world's second-largest economy.

The sell-off in stocks has increased bets on interest rate cuts around the world, with futures pointing to a 100% chance of Federal Reserve easing in September. A sharp rise in market volatility (.VIX) added pressure on carry trades, sending the U.S. dollar down 0.7% to 152.78 yen on Thursday.

MSCI's broadest index of global shares (.MIWD00000PUS) fell 1%, while Japan's Nikkei (.N225) fell 3.3%, partly due to an 11% plunge in Nissan Motor (7201.T) after the company reported a 99% drop in quarterly profit.

Taiwan (.TWII) markets remained closed for a second day due to a typhoon.

Chinese blue-chip stocks (.CSI300) fell 0.9%, while the Shanghai Composite Index (.SSEC) also fell 0.9%, hitting a five-month low.

Hong Kong's Hang Seng (.HSI) fell 1.7%, unhelped by Beijing's latest round of economic easing.

On Wall Street, the Nasdaq (.IXIC) lost nearly 4% as weak earnings results from Alphabet and Tesla dented investor confidence in the already lofty valuations of Big Tech stocks.

The decline added to recent market volatility, with the Wall Street Fear Index (.VIX) hitting a three-month high. Investors sought safety in cash and highly liquid short-term debt as two-year U.S. Treasury yields fell to their lowest in nearly six months on Wednesday.

"There are a lot of factors weighing on equity markets right now," said Jeff Yu, senior currency and macro strategist at BNY Mellon in London.

He also pointed to declining auto sales in the US, Europe and Japan, as well as recent interest rate moves in China, as clear signs of weakening global consumer demand.

Another big factor was the strengthening of the yen, which rose more than 1% to its highest in 2 1/2 months, ahead of a Bank of Japan meeting next week to discuss whether to raise interest rates.

The Swiss franc also strengthened 0.5% to 0.88 per dollar, adding 0.7% overnight.

Shorter-term bonds extended gains, helped by comments from former New York Federal Reserve President Bill Dudley that the central bank should cut rates, preferably at its policy meeting next week.

The yield on two-year Treasury notes fell another 3 basis points to 4.3894%, after falling 4 basis points on Wednesday. Ten-year Treasury yields also fell 2 basis points to 4.2622% on Thursday.

In commodities, iron ore prices fell nearly 1% on lingering concerns about China's economy. Copper futures fell 1.2%, while oil prices remained near six-week lows.

Brent crude futures fell 0.5% to just over $81 a barrel, while U.S. West Texas Intermediate (WTI) crude also fell 0.5% to $77.23 a barrel. Gold prices fell 1% to $2,373.62 an ounce.
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Inflation data, tech gains lift Wall Street

Wall Street's major indexes closed higher on Friday as investors turned their attention back to Big Tech. That followed a massive sell-off earlier in the week, and positive inflation data bolstered confidence that the Federal Reserve could soon begin cutting interest rates.

While the S&P 500 (.SPX) and Nasdaq Composite (.IXIC) both posted gains, they failed to fully recover from their losses in the previous two sessions. Both indexes ended the week lower, marking their second straight weekly decline.

The Dow Jones Industrial Average (.DJI) ended the week higher, helped by gains in industrial conglomerate 3M (MMM.N). Shares of the company jumped 23%, their biggest daily percentage gain in decades, after the company raised the lower end of its full-year adjusted profit forecast.

Investors spooked by recent volatility are bracing for earnings from major tech companies, a Federal Reserve meeting and employment data to be closely watched next week. These events could determine the near-term trajectory of U.S. stocks after a period of wild swings.

A multi-month rally in Big Tech stocks stalled in the second half of July, triggering a sell-off. The S&P 500 and Nasdaq Composite indexes posted their biggest one-day losses since 2022 on Wednesday, following disappointing earnings reports from Tesla (TSLA.O) and Google parent Alphabet (GOOGL.O).

Five of the seven stocks in the so-called "Magnificent Seven" rose 2.7% on Friday. The exceptions were Tesla (TSLA.O) and Alphabet (GOOGL.O), whose weak results on Wednesday triggered a broad sell-off in the market. Both companies fell 0.2%, with Alphabet's shares hitting their lowest close since May 2.

The release of more earnings reports from the "Magnificent Seven" next week could have a significant impact on the near-term outlook for the market, as they will determine its future direction.

"What we see from Apple, Microsoft and Amazon.com next week will really determine whether the current stock rotation continues and which direction the market goes," said Greg Bootle, head of U.S. equity and derivatives strategy at BNP Paribas.

Market rotation refers to investors moving from high-growth stocks with high valuations to less valued sectors such as mid- and small-cap stocks.

This process appears to have accelerated in recent weeks, as small-cap indices such as the Russell 2000 (.RUT) and the S&P Small Cap 600 (.SPCY) hit their fourth weekly closing highs.

The Russell 2000 (.RUT) posted its third straight weekly gain, its best three-week performance since August 2022.

These small-cap, economically sensitive companies were supported on Friday by a modest rise in U.S. prices in June, highlighting weakening inflation and potentially opening the door for the Fed to begin easing policy as early as September.

The probability of a 25 basis point rate cut at the Fed's September meeting remained unchanged at about 88% following the release of PCE inflation data, according to CME FedWatch data. Traders continue to expect two rate cuts by December, LSEG data show.

"We do think the robust economic data is supportive of broader trading," said Adam Hetts, global head of multi-asset at Janus Henderson, noting that small-cap stocks have outperformed the S&P 500 by more than 10% over the past month.

The rise in trading activity has also helped lift cyclical sectors. All 11 sectors of the S&P 500 index rose on Friday, led by industrials (.SPLRCI) and materials (.SPLRCM).

On Friday, the S&P 500 (.SPX) rose 59.88 points, or 1.11%, to 5,459.10, while the Nasdaq Composite (.IXIC) rose 176.16 points, or 1.03%, to 17,357.88. The Dow Jones Industrial Average (.DJI) rose 654.27 points, or 1.64%, to 40,589.34.

Over the past week, the Dow has gained 0.75%, while the S&P 500 has fallen 0.82% and the Nasdaq has fallen 2.08%.

Among the companies that saw their shares rise on positive earnings reports were Deckers Outdoor (DECK.N), which jumped 6.3% after raising its full-year profit forecast, and oilfield services company Baker Hughes (BKR.O), which rose 5.8% after it beat second-quarter profit estimates.

Norfolk Southern (NSC.N) shares rose 10.9%, its biggest one-day gain since March 2020, after the rail operator posted quarterly profit that beat Wall Street expectations, thanks to strong pricing for its services.

Meanwhile, shares of medical equipment maker Dexcom (DXCM.O) plunged 40.6% after cutting its full-year revenue forecast, causing significant disappointment among investors.

Trading volume on U.S. exchanges totaled 10.92 billion shares, below the 20-day average of 11.61 billion shares.

While the S&P 500 is still just 5% below its all-time high and has gained nearly 14% this year, some investors are beginning to worry that Wall Street may be overly optimistic about future earnings growth. That could leave stocks vulnerable if companies fail to meet expectations in the coming months.

Investors are also looking ahead to comments from the Federal Reserve's meeting on Wednesday to see if policymakers plan to cut interest rates, something many market participants expect in September. Employment data due later in the week, including the monthly labor market report, could provide a clearer picture of how severe the labor market slump is becoming.

These events could have a significant impact on the future direction of the market, and investors will be watching closely to adjust their strategies and mitigate risk.

"This is a critical time for the markets," said Bryant VanCronkhite, senior portfolio manager at Allspring. "Investors are starting to question why they are paying such high prices for AI-related companies, while the market is worried that the Fed may miss out on a soft landing, causing significant volatility."

Recent weeks have shown a shift away from leading tech giants and toward sectors that have long been overlooked, including small-cap and value stocks like financial institutions.

The Russell 1000 Value Index has gained more than 3% over the past month, while the Russell 1000 Growth Index has fallen nearly 3%. The Russell 2000 Small Cap Index has gained nearly 9% over the period, while the S&P 500 has lost more than 1%.

Markets are currently fairly certain that the Fed will begin cutting interest rates at its September meeting, with a 66 basis point cut forecast by year-end, according to the CME FedWatch tool.

Expected employment data due later this week could change those forecasts. If the data shows the economy is slowing more quickly, the odds of a rate cut could increase. Conversely, if employment picks up, it could signal an economic recovery, which could in turn impact the Fed's decisions.
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XAU/USD. Review and Analysis

Today, the price of gold attracts some buyers on the decline but remains constrained within the broader trading range of the previous day, staying below the round level of $2400. A weaker tone in the stock markets and geopolitical risks stemming from conflicts in the Middle East are the main factors supporting precious metal prices. Increasing expectations of the start of the Fed's rate-cutting cycle keep dollar bulls on the defensive below the two-week high reached on Monday, benefiting the non-yielding yellow metal.

However, gold price growth will remain limited as traders prefer to wait for additional signals on the Fed's monetary policy path before making a firm decision on the short-term direction. Accordingly, attention will remain focused on the results of the two-day Federal Open Market Committee (FOMC) meeting, which concludes on Wednesday. Along with important U.S. macroeconomic data, including Friday's nonfarm payrolls (NFP) report, this will influence the dynamics of the U.S. dollar and, consequently, the XAU/USD pair. Therefore, it would be prudent to wait for some follow-up buying before confirming that the recent pullback from the all-time high has ended.

From a technical perspective, the overnight failure to gain acceptance above the round level of $2400 and the subsequent decline call for some caution before positioning for significant growth. Moreover, the oscillators on the daily chart have just begun to gain negative momentum, suggesting that the path of least resistance is likely downward. However, bearish traders will need to wait for a sustained break below the support at the 50-day simple moving average (SMA), currently around the $2358 level, before opening new positions.

Some follow-up selling below last week's swing low, around $2353, will confirm a negative outlook, dragging XAU/USD to the next relevant support at the $2325 level. The downward trajectory could extend further, potentially testing the round figure of $2300.

On the opposite side, momentum above the $2400 mark is likely to face some resistance around $2415 before last week's swing high in the $2432 level. A sustained break beyond this would indicate that the corrective decline from the all-time high has run its course, paving the way for additional gains. Gold prices could then rise to intermediate resistance at $2469-2470 and challenge the record all-time high in the $2483-2484 zone.
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Tech in stress: Stocks fall, chipmakers rise amid AI debate

US stock indices ended trading mixed on Tuesday, with the S&P 500 and Nasdaq falling under pressure from weak chipmakers and tech giants, while the Dow Jones Industrial Average showed a slight increase.

Microsoft missed expectations

Tech giant Microsoft, considered a leader in artificial intelligence, ended the day down 0.89%, reaching $422.92 per share. The company's shares fell another 5% in after-hours trading as quarterly results for its cloud service Azure fell short of analysts' forecasts.

Nvidia and other chipmakers are losing ground

Shares in Nvidia, a recognized leader among the beneficiaries of AI growth and the second-largest player in the S&P 500, fell 7.04% to $103.73 per share. The decline had a negative impact on other chip companies, leading to a 3.88% decline in the Philadelphia Semiconductor Index.

Expectations from the giants' reports

This week, investors are eagerly awaiting reports from giants such as Apple, Amazon, and Meta Platforms. Apple shares rose slightly by 0.26%, reaching $218.80, while Amazon lost 0.81%, falling to $181.71. Meta Platforms also showed a decline of 0.54%, ending the day at $463.19. Investors are concerned about the valuation of these companies against the backdrop of the current economic situation.

"A lot of people are wondering right now how to profit from investing in artificial intelligence," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.

Investors are choosing caution: high stock prices are in question

With expectations of a Fed rate cut growing, market participants are starting to question the fair value of stocks. "Companies are showing good financial results, but the main issue is how much their shares are worth. These are expensive securities, and investors should carefully evaluate their investments," the expert comments.

Indices: Dow Jones rises, Nasdaq falls

The Dow Jones Industrial Average (.DJI) rose 203.40 points, or 0.5%, to 40,743.33. At the same time, the S&P 500 (.SPX) fell 27.10 points, or 0.5%, to 5,436.44. The Nasdaq Composite (.IXIC) lost 222.78 points, or 1.28%, to end the day at 17,147.42.

Small Caps and Financials on the Rise

The Russell 2000 Small Cap Index (.RUT) rose 0.35%, while the S&P Value 500 (.IVX) rose 0.52%, helped by the Financials (.SPSY) index, which rose 1.19%. The gains are driven by a recent shift from more expensive stocks to less expensive ones, amid expectations that the Federal Reserve will cut interest rates this year, which is linked to slowing inflation.

Energy and financials lead, technology falls

The energy sector (.SPNY) rose 1.54%, the biggest gainer of all sectors. Financials also performed well, leading the S&P's list of 11 key sectors. Against this backdrop, the technology sector (.SPLRCT) fell 2.2%, the weakest on the day.

Continued sell-off: The impact of earnings

Last week's sell-off in mega-cap stocks, triggered by disappointing Tesla results and Alphabet's outlook for high spending, continues to weigh on the market. These events have heightened investor concerns, leading to a correction in stock prices and a decline in their appeal.

Market prepares for Fed decision: Expectations of rate cuts

Investors continue to hope for easing monetary policy from the US Federal Reserve. The policy meeting is on Wednesday, and the market is pricing in a small chance of a 25 basis point rate cut. However, according to CME's FedWatch tool, that scenario is looking very real at the September meeting.

Labor data expectations

Investors are focused on labor market data this week, culminating in the government's payrolls report on Friday. The Survey of Job Openings and Turnover on Tuesday showed 8.18 million job openings in June, beating economists' expectations of 8 million.

Failures and successes: The impact of corporate news

Among the companies whose shares fell, Procter & Gamble (PG.N) stood out, falling 4.84% to $161.70 after disappointing fourth-quarter sales data. Drug giant Merck (MRK.N) lost 9.81% to $115.25 after the company revised down its full-year profit forecast.

Cybersecurity was also in the spotlight, with CrowdStrike (CRWD.O) falling 9.72% to $233.65 on news of a compensation claim from Delta Air Lines (DAL.N) over the global cyber outage. Against this backdrop, shares of cybersecurity and cloud services company F5 (FFIV.O) rose 12.99% to $200.66 on a better-than-expected fourth-quarter earnings forecast.

Market Breakdown

On the New York Stock Exchange, advancing stocks outnumbered declining stocks by a 1.54-to-1 ratio. On the Nasdaq, the picture was less optimistic, with declining stocks outnumbering declining stocks by a 1.16-to-1 ratio. This reflects the current mood in the market, where investors continue to actively re-evaluate their portfolios amid uncertainty.

S&P 500 and Nasdaq: Highs and lows amid volatile market

The S&P 500 and Nasdaq Composite indices showed interesting results on Tuesday, with the S&P 500 hitting 73 new 52-week highs and one low, while the Nasdaq recorded 133 new highs and 126 lows. Trading volume on U.S. exchanges was 11.25 billion shares, slightly above the 20-day average of 11.19 billion shares.

Microsoft disappointment and the impact on the AI market

Microsoft's (MSFT.O) quarterly results were below expectations, wiping out about $340 billion in market value for the company and its rivals vying for leadership in artificial intelligence technology. Despite this, chipmakers such as Nvidia (NVDA.O) and others showed gains after Advanced Micro Devices (AMD.O) reported results.

The contrast between the chipmakers' gains and their biggest customers' declines highlights the disconnect in AI, with some investors wondering whether Wall Street's rally in AI has become too long-winded.

Expert Comment: Wealth Transfer in AI

Gil Luria, senior software analyst at DA Davidson, said: "Microsoft reported slower growth in its core cloud business but a significant increase in capital expenditures. This could be seen as a wealth transfer from Microsoft shareholders to Nvidia shareholders."

In its earnings call, Microsoft said revenue from its Intelligent Cloud division, which includes the Azure platform, rose 19% to $28.5 billion in the quarter ended June 30. However, that was below analysts' expectations of $28.7 billion, according to LSEG.

Thus, the current changes in market dynamics highlight the volatility and uncertainty in the technology sector, especially amid changes in demand for AI and cloud computing solutions.

AI Spending: Tech Giants Under Pressure

In the last quarter, Microsoft increased capital expenditure by 78% to $19 billion, including finance leases. This spending is related to the need to expand its global network of data centers to meet the growing demand for AI technologies.

Investors are looking forward to the results of significant investments in AI

Investors are very eager to see the results of significant investments in AI. Daniel Morgan, senior portfolio manager at Synovus Trust, said: "This has become a major concern. Stocks have risen strongly in the run-up to these reports." High expectations for tech companies have led to a jump in their share prices, which is now causing concern among investors.

High Stakes and Rising Costs

Rising AI costs added to concerns after Alphabet announced a significant increase in capital expenditures to support its generative AI technology. The higher-than-expected spending has raised concerns among investors who are concerned that the cost of building AI infrastructure could be higher than expected profits.

Amid high expectations for tech giants, analysts are forecasting that S&P 500 tech companies will increase their combined profits by nearly 10%, according to LSEG I/B/E/S.

Market Correction: Nasdaq Under Pressure

However, concerns about skyrocketing AI costs that aren't being matched by similarly strong revenues have dragged the Nasdaq down 8% from its record high close on July 10. This reflects the overall market sentiment, with investors continuing to closely monitor the tech sector, balancing expectations for strong revenues with the reality of the costs of developing new technologies.

Tech Stocks: Slip and Slip Ahead of Earnings

Ahead of Microsoft's earnings, the Nasdaq has slipped more than 1%, reflecting investor caution. Other major tech stocks have also come under pressure amid the decline. However, despite the overall negative backdrop, AMD has posted a 6% gain, thanks to an upbeat third-quarter revenue outlook based on strong demand for its AI chips.

Contrary trends: chipmakers on the rise

Among other AI-related chipmakers, Broadcom (AVGO.O) posted a 1.4% gain, while Intel (INTC.O) and Qualcomm (QCOM.O) also increased their market value, gaining almost 1% each. This suggests that despite the overall decline in the tech sector, the chipmaker segment continues to attract investor interest.

AI: Reality and Challenges

Rishi Jaluria, an analyst at RBC Capital Markets, noted: "We are still in a difficult macroeconomic environment. AI is indeed a significant factor, but it requires significant investment, which is clearly reflected in the capital expenditure numbers." This highlights the current challenges that companies face in the context of global economic uncertainty and the high costs of developing advanced technologies.
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Hot forecast for EUR/USD on August 1, 2024

The results of the Federal Open Market Committee meeting implied a significant rise in the dollar, but it never happened. The market continues to stagnate despite statements from Federal Reserve Chair Jerome Powell. He explicitly mentioned the need to begin easing monetary policy. However, he did not specify when this process would start. Although there is no doubt that interest rates will be lowered as early as September, the market was generally prepared for this development. Furthermore, according to preliminary estimates, inflation in the eurozone accelerated from 2.5% to 2.6% instead of slowing down to 2.3%. This creates a precondition for the European Central Bank to slow down the pace of interest rate cuts, contributing to the single European currency's strength. In other words, these factors somewhat balanced each other out.

Today, the focus will be on events unfolding in Europe. First, investors expect another interest rate cut from the Bank of England, which will support the U.S. dollar. Second, the eurozone is expected to see a sharp increase in the unemployment rate from 6.4% to 6.9%. Due to the scale of the change, this is likely to have the most significant impact. Therefore, despite Powell's statements yesterday, there are all the prerequisites for further strengthening of the dollar.

Despite a rich flow of information, the EUR/USD pair has not shown any speculative activity. The quote has formed a characteristic stagnation around the local low of the corrective cycle, as the support level of 1.0800 serves as a support.

On the 4-hour chart, the RSI indicator is moving in the lower area of 30/50, indicating that the bearish sentiment persists in the market.

Regarding the Alligator indicator on the same time frame, the moving average lines point downward, corresponding to a downward cycle.

Expectations and Perspectives
Subsequent price fluctuations within the 1.0800/1.0850 range are possible in this situation. When the price breaks out of either boundary of the established range, a major spike in speculative activity is expected.

Complex indicator analysis points to a stagnant phase in the short-term and intraday periods. The indicators are unstable.
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The Week Ahead on Wall Street: Economic Fears and Last Week

Buying Opportunities in a Falling Market

Despite the sell-off, some market participants saw a buying opportunity. Jonathan Golub, a strategist at UBS, noted in a note to clients that the market historically performs best when the VIX index widens, presenting a short-term investing opportunity.

Bearish Sentiment Prevails

Declining stocks outnumbered advancing stocks by nearly three to one on the New York Stock Exchange, 2.92 to 1, while the Nasdaq saw a 4.52 to 1 ratio. The S&P 500 posted 62 new 52-week highs and 15 new lows, while the Nasdaq Composite posted 34 new highs and 297 new lows.

Trading Volume and Earnings Expectations

Trading volume on U.S. exchanges reached 14.75 billion shares, well above the 20-day average of 11.97 billion shares.

Eyes on Earnings to Come

Investors will be watching earnings reports from giants like Caterpillar and Walt Disney next week, which will provide important insight into the health of the consumer and manufacturing sectors. Healthcare leaders including Eli Lilly are also expected to report, providing insight into the health of the pharmaceutical sector and its prospects.

Strengthening Safe Havens

With concerns mounting, investors have been flocking to safe haven bonds and other assets. The yield on the benchmark 10-year Treasury note fell to 3.79%, its lowest since December. This indicator moves inversely to bond prices, indicating increased demand for safe havens.

Stable Sectors in Popularity

Amid economic uncertainty, sectors traditionally considered stable have attracted increased attention. Investors have flocked to these areas in an attempt to protect their capital and minimize potential losses.

Sector Performance: Healthcare and Utilities on the Rise

Over the past month, the healthcare sector has posted a 4% gain, while utilities have risen more than 9%. These sectors have become safe havens for investors amid economic uncertainty. At the same time, the Philadelphia SE Semiconductor Index (SOX) has fallen nearly 17%, led by sharp losses in popular names like Nvidia and Broadcom.

Looking Ahead: Profit Taking or the Beginning of a Correction?

Some investors believe that the current data may simply reflect a desire to take profits after the market's significant rally in 2024. This approach does not exclude the possibility of further growth, but also indicates the possible beginning of a correction, especially in sectors that previously showed a confident rise.
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Nasdaq in the red: weak bond auction, tech companies fall

Tech sector under pressure
The U.S. stock market closed lower on Wednesday, with the Nasdaq index losing 1%. The main reason was a decline in tech stocks, exacerbated by weak interest in the 10-year Treasury auction, which caused investor jitters amid volatile trading.

Morning gains turn to losses
Trading started on a positive note with tech giants rising, but both indexes began to lose ground as the day progressed. Investors, still jittery from the recent global sell-off in equities, added to the sell-off after a weak Treasury auction sent the market lower.

Red Zone: All Indexes Die
All three major indexes ended the day in the red, with losses widening just before the close. The tech-heavy S&P 500 (.SPLRCT) fell 1.4%, becoming the biggest drag on the benchmark index.

Recession Worries
Investors are worried about a possible U.S. recession, as well as weaker forecasts from major U.S. companies. These factors are weighing on the market.

Day's Results: Big Losses
The Dow Jones Industrial Average (.DJI) fell 234.21 points, or 0.6%, to 38,763.45. The S&P 500 (.SPX) lost 40.53 points, or 0.77%, to 5,199.5. The Nasdaq Composite (.IXIC) fell 171.05 points, or 1.05%, to 16,195.81.

Expert Opinions
Lindsey Bell, chief strategist at 248 Ventures in Charlotte, North Carolina, said investors may also have been taking profits after stocks rebounded Tuesday.

Big Losses
The Nasdaq and S&P 500 each lost at least 3% on Monday, underscoring the volatility of the current market environment.

Impact of Comments from Japan
Stocks received some support Wednesday after Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said the central bank has no plans to raise rates amid volatile financial markets.

Nikkei surges after decline
Japanese stocks rose on the news. The Nikkei (.N225) rose 1%, extending a 10% rebound that began on Tuesday after a sharp decline on Monday. The Nikkei's sudden 12.4% decline triggered a global decline in equities as investors turned away from risky assets.

Japan rate hike fallout
The Bank of Japan's surprise rate hike on July 31 to a level not seen in 15 years triggered a sell-off in global markets. Investors began unloading their yen positions in a carry trade, sending the low-yielding Japanese currency, which is typically used to buy high-yielding assets, sharply higher.

Disappointing Corporate Results
Walt Disney Shares Slide
Walt Disney (DIS.N) shares fell 4.5% after the company warned of "moderate demand" for its theme parks in coming quarters.

Super Micro Computer Slide
Super Micro Computer (SMCI.O) shares tumbled 20.1% after the company reported lower-than-expected quarterly adjusted gross profit. Rival Dell Technologies (DELL.N) also fell 4.9%.

Market Expectations
Federal Reserve Eyes
Investors are eagerly awaiting further comments on monetary policy from the Federal Reserve, with particular attention focused on an event in Jackson Hole, Wyoming, where Fed Chairman Jerome Powell is scheduled to speak.

Trading Activity
Trading volume on U.S. exchanges on Wednesday was 12.93 billion shares, slightly above the 20-day average of 12.63 billion shares.

Declining Stocks Prevail
Declining stocks outnumbered advancing stocks on the New York Stock Exchange (NYSE) by 1.48 to 1. On the Nasdaq, the ratio was even more pronounced, with decliners outnumbering advancing stocks by 2.08 to 1.

Highs and Lows: Market Trends
S&P 500 and Nasdaq Performance
The S&P 500 posted 16 new 52-week highs and 9 new lows. The Nasdaq Composite posted 34 new highs and 195 new lows, putting the tech sector under significant pressure.

External Factors
Oil Price Rise
Oil prices rose on a bigger-than-expected draw in U.S. crude inventories and a possible escalation in the Middle East. However, investors continue to voice concerns about weak demand in China.

S&P 500 Volatility
Daily Performance
After a morning rally on Wednesday, the S&P 500 began to lose ground around midday and then fell further after the 10-year U.S. Treasury auction.

Profit Taking
Bell also noted that some investors are using short-term stock gains to take profits, adding to the volatility in the market.

MSCI falls, STOXX 600 rises
The MSCI World Share Index (.MIWD00000PUS) fell 0.35 points, or 0.05%, to 770.64, after hitting a session high of 783.83. Meanwhile, Europe's STOXX 600 (.STOXX) ended the day up 1.5%, reflecting positive momentum in European markets.

FX Markets: BoJ Statements React
Yen Falls
The Japanese yen weakened after the Bank of Japan's rate hike announcements, somewhat reassuring investors worried about the volatility of the Japanese currency. The yen strengthened sharply against the dollar on Monday amid concerns about a possible U.S. recession, sending markets falling broadly.

Strengthening dollar
The US dollar strengthened 1.75% against the yen, reaching 146.83. The dollar index, which tracks the greenback against a basket of currencies including the yen and the euro, rose 0.2% to 103.19. The euro, meanwhile, fell 0.08% to $1.0921.

Bond yields: An analysis of supply and demand
US Treasury yields rise
US Treasury yields rose after weak demand at a $42 billion auction of 10-year notes. Companies rushed to place their debt amid growing risk appetite. Traders are closely monitoring supply and awaiting more economic data to assess the health of the US economy.

Specifics
The 10-year Treasury yield rose 7 basis points to 3.958%, up from 3.888% late Tuesday. The 30-year yield also rose, adding 8.1 basis points to 4.2579%.

These moves highlight the current market sentiment, with investors seeking to balance risk and return amid economic uncertainty.

Two-Year Yields Decline
The two-year Treasury yield, which closely tracks interest rate expectations, fell 0.2 basis points to 3.9827%, down from 3.985% late Tuesday. The move reflects a slight softening in investor expectations for future Federal Reserve action.

Energy Markets: Oil Prices Rising
Oil Prices Strengthening
Energy markets are seeing a significant rise in oil prices. US crude oil rose 2.77% to $75.23 per barrel. Brent crude prices also rose, rising 2.42% to $78.33 per barrel. These changes come amid concerns about depleting reserves and a possible escalation of conflicts in the Middle East.

Precious Metals Market: Gold Prices Fall
Gold Price Decline
Precious metal prices declined. Spot gold lost 0.2% to $2,384.59 per ounce. US gold futures also fell, falling 0.05% to $2,387.80 per ounce. These changes may be related to fluctuations in currency markets and changing investor sentiment.

Results and Prospects
Markets continue to show volatility in response to changes in economic indicators and geopolitical risks. Investors are closely monitoring developments, trying to adapt their strategies to the new conditions. Interest rate expectations and rising oil prices play key roles in shaping market sentiment.
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New round of gains: Nasdaq, S&P 500 up 2% on US unemployment report

US stocks rally: S&P 500 and Nasdaq jump more than 2%
US stock markets surged higher on Thursday, with major indices including the Nasdaq and S&P 500 ending the day up more than 2%. The gains were driven by an unexpected drop in jobless claims, which eased concerns about a possible sharp slowdown in the labor market.

Rebound Across Sectors
All sectors of the S&P 500 gained, with the biggest gainers being technology (.SPLRCT) and communications services (.SPLRCL). Small-caps also saw strong gains, with the Russell 2000 (.RUT) up 2.4%.

Eli Lilly Rises
Among the top gainers was pharmaceutical company Eli Lilly (LLY.N), which soared 9.5% after the company raised its full-year profit forecast and sales of its popular weight-loss drug Zepbound topped $1 billion for the first time in a quarter.

Positive Labor Market Data
A larger-than-expected decline in jobless claims gave markets a boost.

Impact of Reports and Recession Fears
Last week, the US employment reports for July raised concerns about a possible recession, leading to a sharp decline in stocks. Traders also noted an unwinding of positions in the carry trade, a strategy in which investors borrow money from low-interest-rate economies to invest in high-yielding assets.

The market continues to react to macroeconomic data, and investors will be closely watching new data in the coming weeks to assess the state of the economy and possible prospects.

Dow Jones, S&P 500 and Nasdaq ended the day on a solid rise
US stock indexes ended the trading day with significant gains. The Dow Jones Industrial Average (.DJI) rose 683.04 points, or 1.76%, to 39,446.49. The S&P 500 (.SPX) rose 119.81 points, or 2.30%, to 5,319.31. Meanwhile, the Nasdaq Composite (.IXIC) rose 464.22 points, or 2.87%, to end the day at 16,660.02.

Volatility Declines: Wall Street Calms Down
The Cboe Volatility Index (.VIX), often called Wall Street's fear gauge, declined Thursday, suggesting that sentiment is stabilizing. However, experts caution that the current gains do not necessarily mean the market has bottomed out.

"Once volatility starts to rise, it takes a while for it to calm down," said David Lundgren, chief market strategist and portfolio manager at Little Harbor Advisors. He also added that the current growth does not guarantee an immediate continuation of the rise, but if we look at the three- to six-month horizon, the probability of above-average returns is quite high.

End of the earnings season: Investor expectations
As the second-quarter earnings season comes to an end, investors are eagerly awaiting the final results. There were some disappointments at the start of the reporting period, but the market remains focused on the latest data.

Under Armour surprises the markets
One of the most significant events of the day was the sudden rise of Under Armour (UAA.N) shares by 19.2%. The company pleased investors with a surprise first-quarter profit, which was the result of successful efforts to reduce inventory and promotions.

Trading activity: Moderate recovery
Trading volume on U.S. exchanges amounted to 11.98 billion shares, slightly below the average of 12.60 billion over the past 20 trading days. However, the market remains active, and participants continue to closely monitor further economic indicators and corporate reports.

Advances outnumber decliners on the New York Stock Exchange (NYSE) 3.59 to 1. The same was true on the Nasdaq, where for every decliner, there were 2.76 gainers. The S&P 500 has posted 7 new highs in the past 52 weeks, but also 4 new lows. Meanwhile, the Nasdaq Composite has posted 32 new highs, but 183 new lows.

Global Markets Strengthen on Better Unemployment Data
A closely watched global stock index jumped more than 1% on Thursday, helped by lower-than-expected U.S. jobless claims data. The results eased recession fears and helped lift Treasury yields and the dollar.

Oil Market Rises as Supply Concerns Outweigh Demand
Oil futures prices rose for a third straight day, led by rising supply risks in the Middle East, offsetting demand concerns that earlier this week sent prices to their lowest since early 2024.

Jobless Claims Drop Sharply in 11 Months
The Labor Department reported Thursday that initial claims for federal unemployment benefits fell by 17,000 to a seasonally adjusted 233,000 in the week ended Aug. 3. That was the largest decline in 11 months and below economists' forecast of 240,000.

Data Focus Amid Market Volatility
These jobless claims data are especially important following Friday's weaker-than-expected July jobs report, which triggered a slump in financial markets on Monday that affected not only the U.S. but also global markets. Amid such volatility, investors continue to watch economic data closely to gauge future market developments.

Markets on Edge: Investors Unwind Carry Trades
The recent market selloff was driven in part by investors unwinding their carry trades, a strategy that involves using cheap borrowing in Japan to buy dollars and other currencies that are then invested in higher-yielding assets. The unwinding of such trades sent Japanese stocks down 12% on Monday, followed by a 3% decline in the S&P 500 (.SPX).

Volatility Ahead: Uncertainties Rise
Experts warn that there could be more volatility ahead, and it won't just be driven by the seasonal weakness that is typical in August and September. Heightened geopolitical tensions in the Middle East, the upcoming US elections and economic data that the Federal Reserve will be watching closely are creating a high degree of uncertainty in the market. "The market doesn't like uncertainty, and we are in that period now," says Irene Tankel, chief US equity strategist at BCA Research.

European and global indices: modest gains amid volatility
While US markets faced turbulence, Europe's STOXX 600 index (.STOXX) closed with a modest gain of 0.08%. The MSCI Global Equity Index (.MIWD00000PUS) also showed positive dynamics, rising 11.40 points, or 1.48%, to 782.10.

FX: Dollar strengthens amid global uncertainty
In currency markets, the dollar index, which tracks the greenback against a basket of major global currencies including the yen and the euro, rose 0.09% to 103.20. The euro, by contrast, weakened slightly, falling 0.04% to $1.0917. Against the Japanese yen, the dollar strengthened 0.3% to 147.13.

Record volatility: Global markets on edge
Before Thursday, the global equity index had posted 16 days of gains or losses of more than 1% this year, while the S&P 500 had recorded 32 such moves. This highlights the record volatility that markets have seen this year, and investors should brace for more volatility in the coming months.

U.S. Treasury yields continue to rise on positive economic data
U.S. Treasury yields continued to rise on Thursday, helped by jobless claims data that bolstered confidence that the U.S. economy can avoid an imminent recession. The data supported expectations for economic resilience, pushing yields higher. In addition, weak demand at the 30-year bond auction added to the yields' upward movement, continuing a trend that began amid similarly weak selling of 10-year notes the previous day.

Yields Rising: Key Indicators
The yield on the 10-year U.S. Treasury note rose 2.1 basis points to 3.988%, up from 3.967% at the close of trading on Wednesday. The yield on the 30-year note also rose, adding 1.6 basis points to 4.2775%, up from 4.261% the previous day. Meanwhile, the yield on the 2-year note, which often reflects expectations for future interest rates, rose 2.9 basis points to 4.0297%, up from 4.001% the previous day.

Oil Markets: Oil Prices Continue to Rise Strongly
Energy markets also saw gains. U.S. crude oil rose 1.28%, or 96 cents, to $76.19 a barrel. European benchmark Brent crude settled at $79.16 a barrel, up 1.06% from the previous day.

Gold Shows Strong Gains
In the precious metals market, gold prices also continued to rise. Spot gold prices rose 1.78% to $2,423.87 an ounce. U.S. gold futures also showed positive dynamics, rising 1.25% to $2,420.50 an ounce.

Economic confidence boosts demand for assets
Rising Treasury yields and stronger oil and gold positions indicate continued optimism in the markets despite some economic concerns. Investors continue to seek assets that can protect them from potential volatility, and current economic data only strengthens their confidence in the resilience of the U.S. economy.
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S&P 500 Erases Losses: Week in Review and Wall Street Scenarios for Next Week

Markets Stabilize: S&P 500 Ends Week Little Changed
The S&P 500 stock index showed solid gains on Friday, managing to almost completely recoup losses suffered earlier in the week amid recession fears and a curtailment of global yen-financed trade. The market remained almost flat for the week, despite sharp fluctuations.

Technology Pulls Market Up
Technology was the biggest contributor to the S&P 500's gains on Friday, proving to be the engine that pulled the market out of the negative territory. Meanwhile, the Cboe Volatility Index, known as Wall Street's "fear gauge," fell sharply after a sharp jump earlier in the week.

Monday's swings and recession fears
The market had a particularly bad start to the week, with a sharp drop on Monday continuing the sell-off that began the previous week. Investors were spooked by a weaker-than-expected July employment report, raising concerns about a possible recession. In response, many began to close their carry trades linked to the Japanese yen.

Investors looking for a foothold
"Investors are trying to determine whether the market has bottomed out," said Robert Phipps, managing director at Per Stirling Capital Management in Austin, Texas. He said the market is in a period of high uncertainty, and participants are actively looking for signals for further action.

Fed Offers Confidence
The Federal Reserve said Thursday that slowing inflation is setting the stage for a possible rate cut in the future. However, they said any decisions would be based on current economic data, adding to the uncertainty.

Waiting for More Data
It's been a volatile week, with investors eagerly awaiting more data on inflation, corporate earnings, and presidential polls. These could be key factors in determining the direction of U.S. stocks and helping to smooth out the current market turbulence.

Market Volatility: U.S. Stocks on a Swing
The quiet months in U.S. stock markets have suddenly given way to bouts of volatility. Sharp price movements became a new reality for investors in August, driven by a string of worrisome economic data that coincided with the completion of a major deal financed by the Japanese yen. The deal triggered the biggest selloff in stocks this year. Despite recent recovery efforts, the S&P 500 remains 6% below its all-time high set last month, though it has rebounded from a dramatic plunge earlier in the week.

Recovery May Take Time
While the past few days have brought relief in the form of rising stocks, experts warn against expecting calm to return to markets anytime soon. Historical data on the Cboe Volatility Index, also known as Wall Street's "fear gauge," shows that periodic spikes in volatility can last for months. On Monday, the index posted its biggest one-day gain, indicating a high degree of anxiety among investors.

Wall Street's Fear Gauge: Echoes of Anxiety
The Cboe index measures demand for options, which provide protection against sharp market swings. When the index closes above 35, as it did on Monday, it takes about 170 trading sessions on average for the market to return to calmer levels. This is in line with the index's long-term median of 17.6, signaling significantly less anxiety among market participants.

New Test: Inflation Data
A new potential test for the market is on the horizon. On Wednesday, U.S. consumer price data will be released. If inflation shows too sharp a decline, it could fuel concerns that the Federal Reserve has made a mistake in leaving interest rates high for too long. This could lead to further market instability as investors worry that tight monetary policy will push the economy into recession.

U.S. stocks, which have been going through periods of ups and downs, are in a state of heightened anxiety, and there are no signs that this situation will change quickly. Investors continue to watch the new data closely, hoping for stability that so far seems out of reach.

Market ends week with minimal changes
Friday's trading ended with a slight increase in the main indices, which allowed them to compensate for some of the weekly losses. The Dow Jones Industrial Average added 51.05 points, which corresponds to an increase of 0.13%, and reached 39,497.54. The S&P 500 index rose by 24.85 points, or 0.47%, closing at 5,344.16. The Nasdaq Composite also showed positive dynamics, increasing by 85.28 points, or 0.51%, and ended trading at 16,745.30.

Weekly results: small losses against expectations
Despite the positive end of the week, the indicators for the week as a whole were in the negative. The S&P 500 fell 0.05%, the Dow Jones lost 0.6%, and the Nasdaq Composite slipped 0.2%. The current market situation reflects the nervousness of investors who are waiting for more signals from the Federal Reserve.

Waiting for the Fed's decision: What's next?
Michael James, managing director of equities at Wedbush Securities, notes that the market will remain in a state of heightened uncertainty until the next Federal Reserve meeting on September 17-18. The main focus of traders is on whether the Fed will decide to cut interest rates by 25 or 50 basis points. According to CME Group, the probability of a 50 basis point cut is estimated at 51%, while the probability of a softer 25 basis point cut is 49%.

Investors Await Inflation Data
In addition to the Fed's decisions, investors are eagerly awaiting consumer price and retail sales data for July, due out next week. These figures could provide a clearer picture of whether the U.S. economy will avoid a hard landing and provide direction for the market going forward.

Yearly Gains: Tech on the Rise
Despite recent wobbles, all three major indexes have continued to post strong gains since the start of 2024, helped by strong earnings from major tech companies and optimism around artificial intelligence. Stocks have shown strong gains early in the year, helping the market stay positive amid the overall turbulence.

Investors continue to watch the events unfold, awaiting more economic data and policy decisions to see where the market will head in the near future.

S&P 500 and Nasdaq Continue Strong Gains
The S&P 500 and Nasdaq have both posted impressive gains to end the year, up about 12% each since Dec. 31. The recent selloff in stocks has made tech stocks more affordable on a price-to-earnings basis, bringing them back into the spotlight.

The Day's Winners: Take-Two and Expedia
Friday's trading was marked by gains for individual stocks, particularly in the tech and entertainment sectors. Video game publisher Take-Two Interactive Software jumped 4.4% after forecasting higher net bookings in fiscal years 2026 and 2027. Meanwhile, online travel agency Expedia rose 10.2% after reporting quarterly earnings that beat analysts' expectations.

Trading Activity: What's Happening on the Stock Markets?
Trading volume on U.S. exchanges on Friday was 11.13 billion shares, slightly below the 20-day average of 12.59 billion. Advancing stocks outnumbered declining stocks on the New York Stock Exchange by a 1.39-to-1 ratio. However, the situation was slightly different on the Nasdaq, with decliners outnumbering gainers by a 1.14-to-1 ratio.

New Highs and Lows: Who's Leading the Way?
The S&P 500 posted 15 new 52-week highs and just three new lows, while the Nasdaq Composite was more mixed, with 52 new highs and 159 new lows. The data reflects continued uncertainty in the market despite the overall gains in the indices.

Market Expectations: Rate Cuts on the Horizon?
Futures markets are increasingly biased toward the Federal Reserve cutting its benchmark interest rate by 50 basis points at its next meeting in September. The probability of this scenario is estimated at 55%, a sharp change from the 5% chance recorded a month ago.

Economic Risks: A New Reality
Slower wage growth confirms that economic risks in the U.S. are becoming more balanced, especially against the backdrop of lower inflation and slower economic activity, said Oscar Munoz, chief U.S. macro strategist at TD Securities, emphasizing that the current economic environment requires special attention and caution from investors and analysts.

The market remains in a state of anticipation, and the coming months will show whether U.S. stocks can continue their rally or face new challenges.

Corporate Earnings Do Not Send Clear Signals to the Market
Corporate earnings for the second quarter did not have a significant impact on the market, leaving investors in uncertainty. Charles Lemonides, head of hedge fund ValueWorks LLC, said the results were neither strong nor weak enough to provide a clear direction for the market.

Solid Results: S&P 500 Meets Expectations
The S&P 500 reported results that were, on average, 4.1% above analysts' estimates. That's close to the long-term average of 4.2% above expectations, according to LSEG. While the results suggest stability, they haven't significantly changed market sentiment.

Earnings to Watch: Walmart, Home Depot, Nvidia
Investors will be focused on earnings next week from giants like Walmart and Home Depot, which could provide insight into how U.S. consumers are coping with the effects of a prolonged period of high interest rates. Also expected by the end of the month is earnings from chip giant Nvidia, whose shares have already risen an impressive 110% year-to-date despite recent market wobbles.

Jackson Hole Meeting: Key Event for the Fed
The Federal Reserve's annual meeting in Jackson Hole, scheduled for August 22-24, will be a key venue for monetary policy discussions ahead of the Fed's September meeting. The event is attracting investors' attention because it could provide insight into the regulator's next steps amid ongoing economic uncertainty.

Volatility as a Signal to Action
Lemonides, an investment expert, believes that recent market volatility is a natural and healthy correction in a strong bull market. He sees it as an opportunity for strategic investing and recently began building positions in Amazon.com, betting on a recovery from the recent weakness in its shares.

Political Uncertainty Rises
The U.S. presidential race is also adding uncertainty to the market. According to an Ipsos poll released Thursday, Democratic candidate Kamala Harris leads Republican Donald Trump 42% to 37% in the upcoming November 5 election. Political instability will certainly be a factor in investor sentiment in the coming months.

Investors continue to monitor developments, waiting for new data and signals that will help determine the future direction of the markets.

Kamala Harris Enters the Presidential Race
Vice President Kamala Harris officially entered the presidential race on July 21, after President Joe Biden ended his campaign following a poor performance in the June 27 debate against Donald Trump. The decision significantly changed the political landscape, adding intrigue to the race.

Election Turbulence: Markets Anticipate More Twists
With three months to go until the November 5 election, investors are bracing for more surprises in what has already been a dramatic election year. According to JPMorgan analysts, the early stages of the campaign provided a clearer picture of the likely outcome of the presidential and congressional elections, but recent events have once again thrown the outcome into doubt.

Election Volatility: Experts' View
Chris Marangi, co-chief investment officer at Gabelli Funds, predicts that the presidential race will inevitably lead to increased volatility in financial markets. However, he believes that the expected rate cuts in September could cause capital to rotate into sectors of the market that have been lagging amid the dominance of Big Tech.

"We expect volatility to increase during the election period, but at the same time, we expect the market to continue to rotate as lower rates offset economic weakness," Marangi said.

Political and Economic Uncertainty: What's Next?
The election year has already become one of the most unpredictable in recent memory, and investors continue to closely monitor political events, trying to assess their impact on the economy and markets. As November approaches, volatility is likely to only increase, adding new challenges for all market participants.
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Awaiting CPI: How Wall Street is preparing for the next round of events

Wall Street ends trading session with mixed results as investors await key economic data
Wall Street ended trading mixed on Monday as market participants prepared for important economic data to be released this week. Investors are particularly focused on the upcoming U.S. consumer price data, which will determine the future course of the Federal Reserve's monetary policy.

Indexes mixed
The Dow Jones Industrial Average lost ground, while the benchmark S&P 500 and tech-heavy Nasdaq Composite ended modestly higher. Meanwhile, the Russell 2000 index of smaller companies fell 0.9%.

Popular rotation is losing momentum
"The recent trend of investors to switch to smaller companies like the Russell 2000, cyclicals and financials has already begun to wane," said James Abate, chief investment officer at Centre Asset Management in New York. He said current economic conditions are not conducive to sustained earnings and stock price growth.

Focus on Consumer Prices and Retail Sales
Investors are looking ahead to the U.S. consumer price index (CPI) this week, due on Wednesday. The data is expected to show inflation accelerating 0.2% in July from June, with the annual inflation rate remaining at 3%.

Market participants are also focused on reports from major retailers, which will help gauge current consumer demand.

Rate Forecasts: What the Market Expects
The consensus in the money market is that the Fed could cut interest rates by 25 or 50 basis points as early as September. According to CME's FedWatch tool, a total monetary easing of 100 basis points is expected by the end of 2024.

Investors Await Retail Sales Data: Potential Impact on the Economy
Investors will be focused on the US retail sales report for July on Thursday. While expectations point to a modest increase, any weakness in the data could reignite concerns about slowing consumer demand and even the possibility of a recession.

Walmart and Home Depot earnings under scrutiny
Big retailers like Walmart and Home Depot are also set to report earnings in the coming days. The results will be closely watched by analysts and investors as they provide an important indicator of the health of the consumer market amid rising unemployment.

Market Risks: Inflation and Consumer Sentiment
James Abate, chief investment officer at Centre Asset Management, warns that a surprise rise in inflation that exceeds expectations could seriously disappoint the market. He says retail earnings are especially important now given recent signs of labor market trouble.

Indices mixed
The trading session ended mixed, with the S&P 500 up 0.23 points to 5,344.39 and the Nasdaq Composite up 35.31 points, or 0.21%, to 16,780.61. Meanwhile, the Dow Jones Industrial Average fell 140.53 points, or 0.36%, to close at 39,357.01.

Starbucks on the rise, KeyCorp attracts investors
Starbucks shares soared 2.58% after reports that activist investor Starboard Value, which holds a stake in the company, is pushing for measures aimed at boosting the coffee giant's stock.

KeyCorp also posted a strong gain of 9.1% after Canadian bank Scotiabank announced it had acquired a minority stake in the U.S. regional lender for $2.8 billion.

Hawaiian Electric's Future in Doubt
Meanwhile, Hawaiian Electric shares plunged 14.45% as the utility expressed concerns about its ability to continue operating amid mounting financial difficulties.

Equity Market: Declines Prevail, but Volatility Eases
Trading on the New York Stock Exchange (NYSE) and Nasdaq ended with decliners dominating. On the NYSE, the ratio of decliners to gainers was 1.46 to 1, while on the Nasdaq, the ratio was even higher at 1.54 to 1.

New Highs and Lows: Daily Stats
The S&P 500 posted 10 new 52-week highs and 7 new lows, while the Nasdaq Composite posted 51 new highs and 179 new lows. These figures show that despite the overall decline, there are still some growth points in the market.

Soothing Volatility: Markets Try to Stabilize
While volatility in the markets has eased significantly since last week, when U.S. stocks suffered a sharp decline, nervousness among investors may persist for some time. The panic flare-up appears to have died down, but history shows that markets can remain under pressure for months.

Cboe Volatility Index Returns to Normal
The Cboe Volatility Index, commonly known as the VIX and often referred to as the "fear index," has stabilized near 20 after hitting a four-year high last week. That's down from its recent peak of 38.57 on August 5. The rapid decline in the VIX is a sign that the sharp moves in the market were driven by short-term factors, such as the unwinding of highly leveraged positions, rather than fundamental issues related to the state of the global economy.

Bet on Stability: Short-Term Factors Dominate
Many market participants see the dissipation of fears as further confirmation that the recent collapse was driven by technicals, including the unwinding of leveraged positions and carry trades financed by the Japanese yen. Investors are confident that these factors are temporary and do not point to deeper structural problems in the global economy.

Markets Remain Tense: VIX Volatility as an Anxiety Indicator
Despite the recent decline in the VIX volatility index, history shows that markets can remain in a state of heightened anxiety for months after a sharp decline. Episodes where the VIX has risen above 35 are usually followed by a prolonged period of investor caution, which dampens the risk-taking that had previously fueled asset prices.

Volatility Takes Time to Normalize
According to experts, after the VIX reaches a level above 35, which is often associated with a high degree of anxiety among market participants, it takes about 170 trading sessions on average for the index to return to its long-term median of 17.6. This highlights that even after an initial calm, markets can remain volatile for a long time.

Investors Are Temporarily Calmed, But Anxiety Remains
J.J. Kinahan, CEO of IG North America and president of online broker Tastytrade, said: "Once the VIX stabilizes in a range, investors begin to feel more relaxed again. However, shocks like the current one usually linger in the memory for six to nine months, maintaining a heightened sense of caution."

The S&P 500's Long Rise
The recent turmoil in the U.S. stock market has come after a long period of stability and growth. The S&P 500 has risen 19% for the year, hitting a record high in early July. However, the rally has proven to be unsustainable: poor earnings reports from several major tech companies in July triggered a massive sell-off, sending the VIX rising from the low end of the tens of points to higher levels.

Unexpected BOJ Action Adds Volatility
The crisis deepened in late July and early August when the BOJ unexpectedly raised interest rates by 25 basis points. The move hurt carry traders who had borrowed cheaply in Japanese yen to invest in high-yielding assets such as U.S. tech stocks and Bitcoin.

Fast Fall and Rebound: Positional Risk Dominates
Mandy Xu, head of derivatives research at Cboe Global Markets, said the sharp market decline followed by an equally rapid rebound suggests that the current gyrations are largely due to position unwinding and risk shifting among market participants.

Volatility Isolated: Equities and FX Under Pressure
Mandy Xu, head of derivatives research at Cboe Global Markets, stressed that recent spikes in volatility, such as the one seen on August 5, have been concentrated in equities and FX. She noted that other asset classes, such as interest rates and credit, have not seen a significant increase in volatility, suggesting that the current swings are limited.

Investor Jitters: Awaiting Key Data
With uncertainty still looming, investors have every reason to be nervous in the coming months. The biggest worry remains economic data due out of the US. The consumer price report due out later this week will be a key indicator of whether the economy is facing a short-term slowdown or heading for a more serious slowdown.

Political Tensions Add to Uncertainty
Political uncertainty is also adding fuel to the fire. With the US elections in November and tensions rising in the Middle East, investors remain on edge as they watch for developments that could significantly impact the market.

Awaiting Inflation and Retail Earnings Data
Investors will be focused on the CPI data due out on August 14. In addition, earnings reports from giants like Walmart and other major retailers this week could be key to shaping market sentiment. Mark Hackett, head of investment research at Nationwide, said these data could have a decisive impact on investor behavior.

Emotional reactions in the market: forecasts and risks
"It is not surprising that in light of recent events, investors may overreact to inflation data, retail earnings and retail sales," Hackett said. In the current emotional environment, any deviations from expectations could cause significant volatility.
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Wall Street Bulls: Weak PPI Data Pushes Market Higher

Indices Rise on Rate Cut Expectations

US stock markets posted solid gains on Tuesday, finishing at a nearly two-week high. The gains were driven by data showing slower PPI growth, bolstering expectations for a Federal Reserve rate cut as early as September.

Slow Producer Price Growth: What It Means for the Economy

US producer prices increased less than expected in July, according to new data. This was due to a decline in services costs, which offset the rise in goods prices. On an annualized basis, the producer price index (PPI) rose by 2.2%, which is lower than the 2.7% increase in June. This suggests that inflationary pressures continue to ease, which supports market optimism about possible monetary easing.

Expectations of rate cuts boost the market rally

Wall Street reacted positively to the data, betting on interest rate cuts soon. According to Paul Ashworth, chief North American economist at Capital Economics, while the modest 0.1% month-on-month increase in PPI and the flat core PPI may not seem like much, they are still in line with the Fed's target of inflation below 2% year-on-year.

Investors await new data

Market participants' attention is now focused on the upcoming consumer price data for July, which will be published on Wednesday, and retail sales data, expected on Thursday. These reports will help investors form clearer expectations about the Fed's further actions.

Michael James, managing director of equity trading at Wedbush Securities, noted that the stable PPI data confirms the effectiveness of the Fed's efforts to control inflation. He also emphasized that the likelihood of a rate cut in the near future is becoming increasingly real.

Thus, the market is optimistic about the prospects for monetary easing, which contributed to today's growth of indices.

Crucial inflation data

Ahead of the publication of the consumer price index, market participants are in a state of heightened anxiety. Economists and investors agree that any deviations in inflation indicators can significantly affect the dynamics of trading. "Any information we get tomorrow morning will have a significant impact on the market because everyone is very tense right now," analysts said.

Cut bets: The odds are rising

The chances that the US Federal Reserve will decide to cut rates by 50 basis points has risen to 55%, according to the latest FedWatch data from CME. That's a significant increase from less than 50% before the latest report. Traders are increasingly confident that the Fed will take such a step, given the current economic conditions and the need for monetary easing.

Market wobbles: Unpredictability continues

Uncertainty reigned in trading on Monday. The S&P 500 (.SPX) was little changed, showing a muted reaction to the latest economic news, while the Nasdaq (.IXIC) posted a small gain. This came after a week of mixed economic reports and an unexpected rate hike by the Bank of Japan.

The S&P 500 (.SPX) closed the day up 90.04 points, or 1.68%, at 5,434.43. The Nasdaq Composite (.IXIC) rose 407.00 points, or 2.43%, to 17,187.61. The Dow Jones Industrial Average (.DJI) also advanced 408.63 points, or 1.04%, to 39,765.64.

Sector Winners and Losers

Among the sectors, information technology (.SPLRCT) and consumer discretionary (.SPLRCD) were the top gainers. These sectors continue to attract investors amid robust demand and a positive outlook.

Meanwhile, energy stocks (.SPNY) came under pressure. The fall in oil prices, caused by OPEC's decision to revise down its 2024 demand growth forecast, was compounded by concerns about potential supply disruptions due to the ongoing conflict in the Middle East. This led to a decline in energy stocks despite the overall optimism in the market.

Thus, the market is eagerly awaiting tomorrow's inflation data, which could be decisive for the Federal Reserve's further actions and the indexes.

Russell 2000 on the rise

The Russell 2000 index, which measures the performance of small companies, showed a solid increase of 1.6%. The result highlights the positive sentiment of small business investors despite overall market volatility.

Starbucks' Historic Surge

Starbucks shares soared a record 24.5%, marking the company's biggest one-day gain ever. The gains came after Brian Niccol, formerly of Chipotle Mexican Grill, was named chairman and CEO of Starbucks. Investors were enthusiastic about the news, seeing it as an opportunity to further grow and strengthen the company's market position.

Chipotle Shares Slip

In contrast, Chipotle shares fell 7.5% following the appointment. The decline may reflect investor concerns about the company's future without Niccol, who has been instrumental in its success.

Home Depot: Mixed Results

Home Depot shares also rose 1.2% despite announcing a decline in full-year profit and an expected drop in same-store sales. The company was able to recoup early losses, indicating investor confidence in its long-term prospects.

BuzzFeed: Narrowing Losses Boosts Shares

BuzzFeed posted a stunning 25.9% gain after the company reported a quarterly report in which it narrowed its second-quarter net loss to $6.6 million from $22.5 million a year earlier. The gains encouraged investors, leading to a sharp jump in the stock.

Exchange Dominance: Gainers Lead the Way

On the New York Stock Exchange, gainers outnumbered decliners by a wide margin 4.36-to-1. On the Nasdaq, the ratio was 2.59-to-1, indicating that optimism was prevalent among market participants.

New Highs and Lows

The S&P 500 posted 17 new 52-week highs and three new lows, while the Nasdaq Composite posted 55 new highs and 128 new lows. The data highlights the mixed dynamics of the market, with some stocks peaking and others struggling.

Global Stocks Rise, Bond Yields Fall

The MSCI World Stock Index rose 1.5%, indicating that global markets are strengthening. Meanwhile, U.S. Treasury yields fell on expectations of monetary easing. The 10-year Treasury yield fell to 3.8484% and the two-year yield fell to 3.9398%, reflecting growing expectations of interest rate cuts.

The broad-based rally in stocks and the decline in bond yields underscores investor confidence in further monetary easing and a stabilizing economic environment.

STOXX 600 and Nikkei on the rise again

Europe's STOXX 600 index gained 0.5% and Japan's Nikkei jumped more than 3% after the holiday, providing a welcome break from the volatility of the past week. The recent volatility in the markets began with a sharp sell-off, fueled by a stronger yen and growing concerns about a possible recession in the US.

Yen Strengthens: New Round Against the Dollar

The yen has continued to strengthen, reaching 146.77 per dollar, representing a significant recovery from a seven-month high of 141.675 hit early last week. By comparison, the yen was at a 38-year low of 161.96 per dollar in early July, highlighting the scale of recent moves in the currency market.

Carry Trade Challenges: Unpredictable Japanese Policy

The Bank of Japan's rate hike last month following a series of foreign exchange market interventions has forced many investors to rethink their strategies. Popular carry trades, which use the yen as a low-interest currency to fund higher-yielding investments, have been particularly hard hit. This has led to significant market corrections as investors have begun to unwind their yen positions en masse.

Sharp Unwinding: Investors Pull Back Fast

As of August 6, leveraged funds, including hedge funds and asset managers, have unwound their yen positions at the fastest pace since March 2011. The rapid unwinding reflects market participants' concerns and attempts to minimize risk in a volatile environment.

Forward to the Future: The Yen Will Remain in Focus

Carsten Junius, chief economist at Bank J. Safra Sarasin, noted that the current dollar-yen exchange rate now better reflects the yield differential between the two currencies. However, he believes that further unwinding of the carry trade financed by the yen could further strengthen the Japanese currency by the end of the year. At the same time, he does not expect USD/JPY to fall significantly below 140.

Thus, with markets recovering and exchange rates continuing to adjust, investors will remain focused on the yen and the Bank of Japan's decisions, which could continue to influence global financial markets.

The Fed at a crossroads: upcoming decisions in question

This week, investors are awaiting the release of key economic data that could influence the Federal Reserve's (Fed) next steps. At the moment, forecasts are divided: some see the Fed cutting rates by 25 basis points, while others expect a more aggressive 50 basis point cut at the September meeting.

Traders are betting: a 100 basis point cut?

Amid speculation about what the Fed might do, traders are pricing in the possibility of a rate cut of as much as 100 basis points within a year. That scenario has gained traction after last week's weak payrolls data sent markets lower, although strong economic data from the US have eased fears of a slowdown.

Inflation in the crosshairs: Dollar weakness possible

Christina Clifton, senior economist at the Commonwealth Bank of Australia, said any sign of easing inflation pressures could push financial markets into anticipation of a sharp rate cut by the Fed. That could put the dollar under pressure as investors look to possible monetary easing.

Upcoming data: Inflation and retail sales

July consumer price index (CPI) data is due out on Wednesday, with monthly inflation forecast to rise to 0.2%. The data will be key to assessing the current state of the economy. Retail sales data is due out on Thursday, which could also have a significant impact on market expectations.

Bond stability and currency volatility

Eurozone bond yields remain largely unchanged as the data continues to stagnate. German 10-year yields, the region's benchmark, fell to 2.188%, off last week's low of 2.074%.

The dollar index, which tracks the U.S. dollar against six major currencies, fell 0.49% to 102.58. Meanwhile, the euro rose 0.6% to $1.09968 and the pound sterling rose 0.8% to $1.28670.

These moves in the currency market reflect the current mood of market participants, who are closely watching any signals from the Federal Reserve to anticipate the future direction of U.S. monetary policy.

Oil prices fall after sudden spike

Brent crude prices fell 1.9% to $80.78 per barrel, while WTI futures fell 2% to $78.46 per barrel.

Markets correct after wild start to week

Recall that Brent crude posted impressive gains on Monday, rising more than 3%, while WTI futures added over 4%. However, despite this rise, markets have returned to decline, indicating continued volatility in the commodity market.

Factors Affecting Price Fluctuations

Current oil price fluctuations are linked to a variety of factors, including expectations about global supply and demand, as well as geopolitical risks and economic data. These dynamic changes continue to cause sharp fluctuations in the market, forcing participants to be constantly prepared for sudden turns.
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EUR/USD. U.S. inflation slows to 2.9%. What does the pivotal report indicate?

The EUR/USD pair hit an 8-month price high on Wednesday, marking a level of 1.1048. For the second consecutive day, traders are trying to consolidate within the 1.10 figure, reacting to the inflation reports released in the U.S. On Tuesday, we received the Producer Price Index and the Consumer Price Index on Wednesday. Both reports were unfavorable for the U.S. currency, leading the U.S. Dollar Index to test the 101 figure again. To the disappointment of dollar bulls, inflation did not serve as a lifeline for the greenback. On the contrary, inflation reports have become an anchor for the dollar, both "in the moment" and (at least) in the medium term.

So, the overall CPI on an annual basis fell into the "red zone," coming in at 2.9% against a forecast of 3.0%. This is the slowest growth rate since March 2021. The index has decreased for the fourth consecutive month, indicating a clear trend. The core index, excluding food and energy prices, slowed to 3.2%. There is also a noticeable trend, as the indicator has been falling for four months.

The report's structure reveals that new cars have become 1% cheaper (down 0.9% in June), while used cars have dropped by 10.9% (following a 10.1% decline the previous month). The rate of price growth for transportation services slowed to 8.8% (after rising 9.4% in June), and clothing prices grew by 0.2% (down from 0.8%). Food prices remained unchanged at 2.2%. Energy costs increased by 1.1% (up 1% in June), but gasoline fell by 2.2% (previously down 2.5%).

The CPI report released on Wednesday adds to the overall picture, following earlier reports on the PPI and wages. On Tuesday, it was revealed that the overall PPI rose by only 2.2% year-over-year in July (forecast 2.3%). This is the first slowdown after five months of consecutive increases. The core PPI also fell into the "red zone," at 2.4% year-over-year in July (forecast 2.7%). The indicator had accelerated for the last three months, but growth rates slowed sharply in July.

In addition, the July Non-Farm Payrolls report indicated that average hourly earnings grew by only 3.6% (forecast 3.8%). This is the slowest growth rate since May 2021.

In other words, inflationary pressures in the U.S. continue to ease, and the market has reacted accordingly. According to CME FedWatch tool data, the probability of a 25-bps rate cut at the September meeting has risen to 54.5%, while the likelihood of a 50-bps cut is 45.5%.

The reaction of the EUR/USD pair was swift: the price surged nearly 150 pips over two days and is now trying to consolidate around the target level of 1.1050 (whereas before the release of inflation reports, the pair was drifting near the base of the 9th figure).

What do the latest figures indicate? Primarily, the Federal Reserve will begin to ease monetary policy in September. The only question is how much. The balance may tilt towards a 50-bps scenario after releasing the core PCE index for July (expected at the end of August) and August's Non-Farm Payrolls (to be published in early September). The outcome of these two releases will clarify how aggressively the Fed will ease monetary policy. However, the fact that the central bank will start easing monetary policy is not up for debate.

Meanwhile, the European Central Bank is puzzled by the latest inflation data in the Eurozone. To recap, the overall CPI in the Eurozone accelerated to 2.6% in July (from 2.5% in June), while the core CPI remained at the previous month's level, i.e., 2.9% (forecast was a decline to 2.8%). Inflation indicators also accelerated in Germany.

Inflation remained "stubborn" amid stronger GDP growth data for the Eurozone in the second quarter: the economy grew by 0.3% quarter-on-quarter and 0.6% year-on-year (growth has been recorded for three consecutive quarters). This situation suggests that the ECB might not rush into the next round of rate cuts—at least not in September. Such speculations have been increasingly heard in the market recently. The impending divergence between ECB and Fed rates supports EUR/USD buyers.

From a technical perspective, the pair on the H4, D1, and W1 timeframes is at the upper line of the Bollinger Bands indicator and above all lines of the Ichimoku indicator, which is showing a bullish "Parade of Lines" signal on the daily chart. Downward pullbacks are advisable for opening long positions. The main target for the upward movement is the 1.1100 level, which corresponds to the upper Bollinger Bands line on the MN timeframe.
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Growth on One Side, Challenges on the Other: Unexpected Financial News from the U.S. and Asia

Sustainable Growth: Wall Street Ends Thursday with Confident Gains
Wall Street's major indexes ended Thursday's trading session with significant gains, with the Nasdaq jumping more than 2%. The gains were helped by fresh retail sales data for July, which confirmed the stability of consumer spending, dispelling fears of a possible recession in the U.S. economy.

Consumer Confidence
Nine of the S&P 500's 11 key sectors advanced, led by consumer staples and information technology.

July's retail sales report showed a 1.0% increase, up sharply from a downwardly revised 0.2% fall in June. The data helped ease concerns about a potential economic slowdown caused by last week's rise in unemployment.

Retail Giants on the Rise
Walmart, one of the world's largest retailers, surged 6.58% after raising its profit forecast for the second time this year, as U.S. consumers flocked to its stores in search of affordable essentials.

Rivals were also on the rise, with Target up 4.35% and Costco up 1.69%.

Unexpected Unemployment Decline
Separate data also helped boost investor sentiment. The number of new U.S. jobless claims unexpectedly fell last week, adding to the market's strength.

"We are seeing the wall of worry begin to crumble as sentiment improves and fundamentals are driving risk appetite," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "Retail sales data beat expectations and inflation is in the low range, creating a favorable environment for equity prices to rise."

Treasury Bonds and Rates: Market Reacts to New Data
U.S. Treasury yields rose sharply after the release of new economic data. In particular, two-year and 10-year bonds showed gains, which is due to a change in trader sentiment. The probability of the Federal Reserve cutting rates by 25 basis points has now increased to 76.5%, compared to 65% before the release of the data.

Investors Await Powell Speech
Market participants are closely watching the latest economic data this week before Federal Reserve Chairman Jerome Powell delivers a key speech next week in Jackson Hole. That event could have a significant impact on the markets as investors await cues on the future of monetary policy.

Stock Markets Continue to Rise
The Dow Jones Industrial Average rose 554.67 points, or 1.39%, to close at 40,563.06. The S&P 500 gained 88.01 points, or 1.61%, to close at 5,543.22. The top gainer, the Nasdaq Composite, rose 2.34%, up 401.90 points to close at 17,594.50.

Individual Stocks Score
Cisco Systems posted a stunning 6.8% gain after announcing plans to grow first-quarter revenue above expectations and cut 7% of its global workforce.

Nike shares rose 5.07% after billionaire investor William Ackman announced a new stake, signaling renewed interest in the sportswear maker.

Ulta Beauty soared 11.17% after news that Warren Buffett's Berkshire Hathaway investment fund had acquired a significant stake in the beauty retailer.

Market Balance
Advancing stocks outnumbered declining stocks by a wide margin 3.22-to-1 on the New York Stock Exchange on Thursday. The same pattern was seen on the Nasdaq, where gainers outnumbered decliners by a ratio of 2.66-to-1.

New Record: S&P 500 and Nasdaq Riding a Wave
The S&P 500 posted 30 new 52-week highs and only one new low, while the Nasdaq Composite posted 76 new highs and 104 new lows. The numbers underscore a mixed market where companies continue to set new records despite continued volatility.

Global Trends: Europe and Asia in Focus
The situation in global markets is evolving rapidly. Past market turmoil caused by fears of a global economic downturn is quickly fading into the background. Recent data from the US has given investors confidence that the US economy is avoiding a deep crisis. This positive trend has helped calm markets and reduce fears of a possible recession.

Rates and forecasts: investors are lowering expectations
Investors are revising their expectations for further actions by the US Federal Reserve. Previously, the probability of the Fed cutting rates by 50 basis points was estimated at 55%, but now the market is showing only a 25% chance of such a significant reduction. This is due to the fact that the recent inflation report for July has allayed fears of drastic action by the Fed.

Japan's Nikkei and Yen Slip: Asian Markets Rise
In Asia, Japan's Nikkei Index stood out, jumping 3% on Friday to post its best weekly performance since April 2020. The index is on track to reclaim its record high despite recent wobbles.

The yen, on the other hand, remains under pressure, having fallen nearly 5% from a seven-month high last week.

It was last trading around 149 to the dollar. Despite the currency's apparent cheapness, volatility is forcing investors to rethink their yen exposure.

Expectations vs. Reality: What's Next?
With market sentiment shifting, investors remain cautious, although optimism about the US economy is keeping the tone positive. How the Fed will respond to the data remains a key question, and markets will be watching closely, especially as global economic uncertainty continues.

Futures and retail sales: what awaits European and US markets
Stock futures point to a positive opening in Europe and the US on Friday. Amid these expectations, investors are focused on UK retail sales data, which will be released in the morning hours in London. Forecasts suggest buyers will return to the market after an unexpected decline in June.

The Bank of England and rates: expectations for a cut
Economists and analysts continue to bet that the Bank of England may cut interest rates further this year. Such a decision is justified by easing inflation pressures and a deterioration in the economic outlook in the UK for the rest of 2024. Lower rates could support the economy, which faces new challenges.

Australia takes a different path: a bet on stability
While many central banks around the world are looking to ease monetary policy, Australia is going its own way. Reserve Bank of Australia Governor Michelle Bullock stressed on Friday that it is too early to talk about rate cuts. According to her, the country's core inflation remains too high and the bank continues to closely monitor potential risks to price increases.

Global Markets: Focus on Central Banks
The situation in global markets remains dynamic, with investors closely monitoring the actions of central banks. While the UK may be preparing for further rate cuts, Australia, by contrast, is maintaining a cautious approach. These divergent strategies reflect the different economic realities that countries face, and their possible impact on global financial markets will be in focus in the coming months.
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Growth on One Side, Challenges on the Other: Unexpected Financial News from the U.S. and Asia

Sustainable Growth: Wall Street Ends Thursday with Confident Gains
Wall Street's major indexes ended Thursday's trading session with significant gains, with the Nasdaq jumping more than 2%. The gains were helped by fresh retail sales data for July, which confirmed the stability of consumer spending, dispelling fears of a possible recession in the U.S. economy.

Consumer Confidence
Nine of the S&P 500's 11 key sectors advanced, led by consumer staples and information technology.

July's retail sales report showed a 1.0% increase, up sharply from a downwardly revised 0.2% fall in June. The data helped ease concerns about a potential economic slowdown caused by last week's rise in unemployment.

Retail Giants on the Rise
Walmart, one of the world's largest retailers, surged 6.58% after raising its profit forecast for the second time this year, as U.S. consumers flocked to its stores in search of affordable essentials.

Rivals were also on the rise, with Target up 4.35% and Costco up 1.69%.

Unexpected Unemployment Decline
Separate data also helped boost investor sentiment. The number of new U.S. jobless claims unexpectedly fell last week, adding to the market's strength.

"We are seeing the wall of worry begin to crumble as sentiment improves and fundamentals are driving risk appetite," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "Retail sales data beat expectations and inflation is in the low range, creating a favorable environment for equity prices to rise."

Treasury Bonds and Rates: Market Reacts to New Data
U.S. Treasury yields rose sharply after the release of new economic data. In particular, two-year and 10-year bonds showed gains, which is due to a change in trader sentiment. The probability of the Federal Reserve cutting rates by 25 basis points has now increased to 76.5%, compared to 65% before the release of the data.

Investors Await Powell Speech
Market participants are closely watching the latest economic data this week before Federal Reserve Chairman Jerome Powell delivers a key speech next week in Jackson Hole. That event could have a significant impact on the markets as investors await cues on the future of monetary policy.

Stock Markets Continue to Rise
The Dow Jones Industrial Average rose 554.67 points, or 1.39%, to close at 40,563.06. The S&P 500 gained 88.01 points, or 1.61%, to close at 5,543.22. The top gainer, the Nasdaq Composite, rose 2.34%, up 401.90 points to close at 17,594.50.

Individual Stocks Score
Cisco Systems posted a stunning 6.8% gain after announcing plans to grow first-quarter revenue above expectations and cut 7% of its global workforce.

Nike shares rose 5.07% after billionaire investor William Ackman announced a new stake, signaling renewed interest in the sportswear maker.

Ulta Beauty soared 11.17% after news that Warren Buffett's Berkshire Hathaway investment fund had acquired a significant stake in the beauty retailer.

Market Balance
Advancing stocks outnumbered declining stocks by a wide margin 3.22-to-1 on the New York Stock Exchange on Thursday. The same pattern was seen on the Nasdaq, where gainers outnumbered decliners by a ratio of 2.66-to-1.

New Record: S&P 500 and Nasdaq Riding a Wave
The S&P 500 posted 30 new 52-week highs and only one new low, while the Nasdaq Composite posted 76 new highs and 104 new lows. The numbers underscore a mixed market where companies continue to set new records despite continued volatility.

Global Trends: Europe and Asia in Focus
The situation in global markets is evolving rapidly. Past market turmoil caused by fears of a global economic downturn is quickly fading into the background. Recent data from the US has given investors confidence that the US economy is avoiding a deep crisis. This positive trend has helped calm markets and reduce fears of a possible recession.

Rates and forecasts: investors are lowering expectations
Investors are revising their expectations for further actions by the US Federal Reserve. Previously, the probability of the Fed cutting rates by 50 basis points was estimated at 55%, but now the market is showing only a 25% chance of such a significant reduction. This is due to the fact that the recent inflation report for July has allayed fears of drastic action by the Fed.

Japan's Nikkei and Yen Slip: Asian Markets Rise
In Asia, Japan's Nikkei Index stood out, jumping 3% on Friday to post its best weekly performance since April 2020. The index is on track to reclaim its record high despite recent wobbles.

The yen, on the other hand, remains under pressure, having fallen nearly 5% from a seven-month high last week.

It was last trading around 149 to the dollar. Despite the currency's apparent cheapness, volatility is forcing investors to rethink their yen exposure.

Expectations vs. Reality: What's Next?
With market sentiment shifting, investors remain cautious, although optimism about the US economy is keeping the tone positive. How the Fed will respond to the data remains a key question, and markets will be watching closely, especially as global economic uncertainty continues.

Futures and retail sales: what awaits European and US markets
Stock futures point to a positive opening in Europe and the US on Friday. Amid these expectations, investors are focused on UK retail sales data, which will be released in the morning hours in London. Forecasts suggest buyers will return to the market after an unexpected decline in June.

The Bank of England and rates: expectations for a cut
Economists and analysts continue to bet that the Bank of England may cut interest rates further this year. Such a decision is justified by easing inflation pressures and a deterioration in the economic outlook in the UK for the rest of 2024. Lower rates could support the economy, which faces new challenges.

Australia takes a different path: a bet on stability
While many central banks around the world are looking to ease monetary policy, Australia is going its own way. Reserve Bank of Australia Governor Michelle Bullock stressed on Friday that it is too early to talk about rate cuts. According to her, the country's core inflation remains too high and the bank continues to closely monitor potential risks to price increases.

Global Markets: Focus on Central Banks
The situation in global markets remains dynamic, with investors closely monitoring the actions of central banks. While the UK may be preparing for further rate cuts, Australia, by contrast, is maintaining a cautious approach. These divergent strategies reflect the different economic realities that countries face, and their possible impact on global financial markets will be in focus in the coming months.
More analytics on our website: bit.ly/3VobLUv

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Hot forecast for EUR/USD on August 19, 2024

The EUR/USD pair ended the past week with a relatively rapid rise. This movement again indicates strong enthusiasm among traders for long positions in the euro.

In the 4-hour chart, the RSI technical indicator is moving in the upper range of 50/70, which suggests an increase in long positions.

Regarding the Alligator indicator in the same time frame, the moving average lines point upwards.

Expectations and Prospects
Stabilization of the price above 1.1050 is necessary to strengthen the current uptrend. In this scenario, moving to the local high of 2023 is possible. Otherwise, the movement within the 1.0950/1.1050 range will likely continue for some time.

The complex indicator analysis suggests an uptrend cycle in the short-term and intraday periods.
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Gold breaks records

The price of gold continued its growth on Tuesday, reaching a new record amid expectations of monetary easing by the world's leading central banks and increased demand for safe assets amid geopolitical tensions.

Gold futures on the Comex exchange rose 0.3% in August, reaching $2,563.6 per ounce. Since the beginning of the year, the price of precious metals has increased by 21.5%.

Signals of a decrease in inflation in the United States, along with a deterioration in the labor market, have increased expectations that the US Federal Reserve will soon begin to lower interest rates. Currently, the market forecasts a rate cut of 100 basis points by the end of the year. Three meetings of the American Central Bank are scheduled in 2024, and it is likely that at one of them the rate will be increased by 50 basis points instead of the standard 25 bp.

The slowdown in inflation is also observed in other large economies. For example, the central bank of Sweden on Tuesday lowered its key interest rate by 25 bps to 3.5% per annum. The regulator noted that the growth rate of consumer prices continues to slow down, approaching the target 2%. The Central Bank's management plans to cut the rate two or three times by the end of the year if the current inflation dynamics persists.
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Stocks Slow as Investors Brace for Big Fed, U.S. Labor News

Asian Stocks Fall on U.S. Data Expectations

Asian stocks fell on Wednesday, halting a strong rally in global stocks as they waited for important U.S. economic data. Bond yields and the dollar fell on expectations of interest rate cuts ahead of policymakers.

S&P 500 Ends Gain

The S&P 500 (.SPX), which had been on track for eight straight sessions of gains, was down 0.2% overnight. MSCI's broad index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) also lost 0.5%. Meanwhile, U.S. and European index futures showed modest gains, up around 0.2%.

Hang Seng and JD.com under pressure

Hong Kong's Hang Seng (.HSI) fell 1%, helped by a sharp 10% drop in JD.com (9618.HK) shares after its largest shareholder, Walmart, decided to sell a significant portion of its stake.

Japan's Nikkei struggles with resistance

Japan's Nikkei (.N225) fell 1% at the open, hitting resistance at 38,000 after recently rebounding from its early August decline. However, the index had partially recovered by midday, paring its losses to 0.3%.

Experts predict possible changes

The recent sell-off in stocks has bottomed out, with recession fears replaced by hopes for a softer slowdown, according to Bank of Singapore analyst Mo Siong Sim. However, he notes that markets need confirmation before they can stabilize, and that confirmation should come from new data.

US data on the horizon

Investors will continue to focus on preliminary US employment data due out later on Wednesday. The data is expected to be revised downwards, which could put pressure on interest rates. The Federal Reserve minutes are also expected to be released, which analysts believe will confirm the regulator's appetite for easing.

Index expectations and their impact on global markets

Investors will be closely watching the publication of both US and global purchasing managers' indices on Thursday. These data promise to have a significant impact on markets, shaping future expectations for economic growth and monetary policy.

Dollar Loses Ground as Gold and Yen Rise

The dollar's weakness has served as a catalyst for a sharp rise in gold prices, which have reached new records. Against this backdrop, the Japanese yen has strengthened to 145.67 per dollar, up 1.6% on the week and an 11% rebound from its 38-year low last month.

The Euro and Rate Cut Prospects

The euro has been on a strong run, up nearly 3% since early August. At $1.1132 in Asian trading, the euro hit its highest since December last year, indicating an attempt to break key chart levels.

Interest rate futures point to a strong chance of the Federal Reserve cutting its benchmark rate by 25 basis points next month, with a one-third chance of a 50 basis point cut. Investors are pricing in a rate cut of nearly 100 basis points this year and expecting a similar cut next year.

Dollar under pressure: further weakness likely

Rabobank strategist Jane Foley says the dollar's recent weakness is likely due to rising expectations for easing from the Federal Reserve. However, she warns that these hopes may be overdone, with the risk of a short-term decline in EUR/USD below $1.10.

A look ahead to upcoming speeches and regional currencies

Investors are also looking ahead to Fed Chairman Jerome Powell's speech at the Jackson Hole Symposium on Friday, which could provide further clues as to where the Fed is headed. Meanwhile, the Australian and New Zealand dollars have shown solid gains, reaching $0.6747 and $0.6157 respectively, reflecting their positive momentum amid global economic developments.

US Bonds and Commodities: Strong Positions

Equity markets continued to be supported by bonds, with the US 10-year Treasury yield falling to 3.81% and the two-year yield holding steady at 3.99%. These figures suggest cautious optimism among investors awaiting economic data.

Commodities Resilience and China's Response

Commodities prices stabilised. Brent crude futures settled at $77.12 a barrel, indicating a recovery from recent wobbles. Iron ore in the Dalian market also hit a local bottom, helped by reports that China plans to allow local governments to buy unsold homes. The move is aimed at supporting the housing market, an important signal for the global steel market, where China plays a key role.

Impact of Chinese construction on global markets

Steel markets are sensitive to any developments in the construction industry in China, the world's largest consumer of the metal. Following the news from China, shares of major miners such as BHP, Rio Tinto and Fortescue Metals were stable in Australian markets, reflecting investor confidence in a recovery in demand.

Gold holds close to records

Gold prices remain close to the record highs set on Tuesday, hovering around $2,516 an ounce. The precious metal remains an attractive asset for investors amid global economic uncertainty.

Asia's central banks: decisions awaited

In emerging markets, attention is focused on central bank meetings in Thailand and Indonesia on Wednesday. Although neither country is expected to cut rates before the US Federal Reserve, their decisions could have an impact on regional markets.

Chinese Stocks Under Pressure After Walmart News

The yen continued to strengthen, reaching 145.5 per dollar, which, along with weak sentiment in Japanese stock markets, put pressure on stocks. At the same time, news that Walmart plans to sell its stake in JD.com sent shares of the Chinese online retailer sharply lower in Hong Kong, despite the company's recent upbeat earnings report.

Obama Back on the Frontlines: Endorsing Kamala Harris

Former US President Barack Obama returned to the national political stage on Tuesday evening to throw his support behind Kamala Harris in her tight presidential race against Republican Donald Trump. The move underscores the importance of the election and Obama's determination to ensure a Democratic victory.

Awaiting Data: The Importance of Fed Minutes

Investors are eagerly awaiting the release of Federal Reserve minutes and revisions to US labor market data on Wednesday. According to Goldman Sachs, the number of revised payrolls could fall by 600,000 to 1 million, which could create a false impression of weakness in the labor market. This data will be key to further analysis of the economic situation in the country.

Labor market under close scrutiny

Of particular importance is the upcoming US labor report, which will be released on September 6. It will be closely watched, since the situation in the labor market is now the main focus of economic policy, against the backdrop of falling inflation. It is this report that will be decisive in determining the further actions of the Fed and their impact on financial markets.

Rate markets are pricing in a decline: the dollar is under pressure

Interest rate futures are fully priced in the Fed's 25 basis point rate cut in September, with about a 30% chance of a deeper cut of 50 basis points. These expectations are putting pressure on the dollar, which is showing weakness in almost all areas.

Gold and the Euro: New Horizons

Gold continues to set records, surpassing $2,500 an ounce, reflecting its status as a safe haven in uncertain times. Meanwhile, the euro has reached $1.11, unfamiliar territory for the currency and a sign of new trends in the currency markets.

Risks on the Horizon: The Importance of Powell's Speech

However, not all analysts share the market's optimism. There is a risk that the labor market data could be stronger than expected, or that Fed Chairman Jerome Powell, speaking in Jackson Hole on Friday, will not show enough flexibility in his rhetoric. These factors could significantly change the mood in financial markets and force investors to revise their expectations.

Fear and Greed Index: From Panic to Stability

The CNN Fear and Greed Index, which measures sentiment in the stock, options and credit markets, has risen from extreme anxiety to neutral in a short period of time. This recovery suggests that investors are slowly starting to calm down after the recent turmoil.

Investors on Hold: Confirmation of the Favorable Outlook

Despite the improved sentiment, market participants remain cautious and await new economic data that may confirm or refute current forecasts. Investors are seeking clarity before diving back into risky assets, preferring to first make sure that positive trends are sustainable.

This period of waiting and analysis highlights not only the importance of data, but also the instability that still hangs over the markets, requiring caution and sober calculations from financial players.
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Holding their breath: Wall Street awaits Fed decision, other big global events

Investor expectations: Stocks frozen, await Fed decision
Global stock markets paused their gains on Wednesday, stabilizing after a long rally that took them to recent record highs. Investors are awaiting confirmation that the US Federal Reserve will decide to cut interest rates, in line with their expectations.

The minutes of the Fed's July 30-31 meeting show that officials are leaning toward lowering rates at the upcoming September meeting. Fed Chairman Jerome Powell is expected to reiterate the central bank's commitment to easing policy at its annual conference in Jackson Hole, Wyoming, on Friday. The move comes after the bank successfully quelled the worst surge in inflation in 40 years.

Oil and Gold: Contrasting Trends
Oil prices fell while gold held its high, hovering near the record highs it hit on Tuesday, as the dollar weakened amid expectations of interest rate cuts.

Wall Street and Global Markets: Steady Gains
On Wall Street, the indices showed modest gains, with the Dow Jones Industrial Average (.DJI) up 0.13% to 40,889, the S&P 500 (.SPX) up 0.42% to 5,620, and the Nasdaq Composite (.IXIC) up 0.57% to 17,918.

The MSCI All Country (.MIWD00000PUS) also showed positive dynamics, adding 0.4% and almost reaching its July record. Since the beginning of the year, it has gained an impressive 13.9%.

European Markets: New Peak on the Horizon
The STOXX (.STOXX) index of 600 leading companies in Europe rose 0.3%, moving closer to its all-time high set on June 7.

Market Volatility: Investor Sentiment Under Pressure
World stocks have been volatile this month, as investors worried about U.S. employment data, which has heightened fears of a possible recession in the world's largest economy.

However, the pessimism has since given way to hopes for a soft landing, which investors see as an opportunity thanks to the expected cut in U.S. interest rates, which could begin as early as September.

Labor Market: Key Factor for the Fed
The U.S. Labor Department reported on Wednesday that job creation was significantly lower than initially expected for the period through March. The news has heightened the Federal Reserve's concerns about the health of the labor market, which in turn affects monetary policy going forward.

"The labor report confirms the futures market's assessment that the Fed is likely to cut rates at its September 18 meeting," Quincy Crosby, chief global strategist at LPL Financial, said in an email.

Futures and Bonds: Rate Cut Expectations
Futures markets have already priced in the likelihood of a 25 basis point rate cut next month, as well as a one-in-three chance of a 50 basis point cut. A 100 basis point cut is expected this year, with another 100 basis points expected next year.

U.S. Treasury yields also fell. The benchmark 10-year note shed 2.3 basis points to 3.795%, down from 3.818% late last night. The yield on two-year bonds, which is more sensitive to interest rate expectations, fell by 6.9 basis points, reaching 3.9305% from 4% late Tuesday.

Waiting for a decision: markets frozen
Thus, global markets continue to wait. Investors are focused on the upcoming Fed meeting in September, where the further course of monetary policy will be decided. Any new data on the state of the US economy could significantly affect this course, and therefore, global financial markets.

No Recession Scenario: The Fed's New Approach
Global markets find themselves in a unique situation where the prospect of a significant rate cut is not accompanied by recession risks. This is in stark contrast to five of the last seven rate-cutting cycles, when lower borrowing costs were accompanied by an economic slowdown, according to Ross Yarrow, managing director of U.S. equities at investment bank Baird.

"If we can get to a point where the Fed cuts rates, inflation comes down, and employment stays high, that would be a very positive outcome," Yarrow said. He added that such an environment could create a positive outlook for equity markets to continue to rally.

Asian Markets: Mixed Performance
Asian markets were less optimistic. The MSCI Asia-Pacific Ex-Japan Index (.MIAPJ0000PUS) fell 0.3%. In Hong Kong, the Hang Seng Index (.HSI) fell 0.7%, with JD.com (9618.HK) contributing significantly to the decline, falling 8.7% after Walmart (WMT.N) decided to sell its large stake in the company.

Japan's Nikkei (.N225) also fell 0.3%, pausing its recovery at 38,000, which had become resistance after the August collapse.

FX and Gold: Dollar Under Pressure
The weaker dollar helped gold, which neared record highs, while strengthening the yen, which has returned to 145.135 per dollar from a multi-year low hit last month.

The euro also strengthened, gaining about 3% in August to reach $1.115, its highest since December last year.

Gold and Oil: Mixed Movements
Gold prices continued to hover around $2,510 per ounce, remaining close to the record highs reached on Tuesday. At the same time, oil prices went down again: US crude oil fell by 1.69% to $71.93 per barrel, while Brent fell by 1.49% to $76.05 per barrel.

Looking Ahead: What's Next?
Overall, markets remain awaiting further actions by the Fed and their impact on the global economy. Whether the US economy can avoid a recession amid rate cuts remains an open question, but current investor sentiment is increasingly leaning towards an optimistic scenario.

Retail Sector on the Rise: JD Sports' Success
The retail sector showed strong growth, leading the leaderboard amid a significant increase in JD Sports (JD.L) shares. The UK sportswear retailer rose 5.3% after reporting a strong improvement in core sales in the second quarter, spurring investors.

Energy under pressure as oil prices fall further
The energy sector was among the laggards, falling 0.6% as oil prices fell for a fifth straight session. Investors are concerned about a possible slowdown in global oil demand, putting pressure on companies in the sector.

Key data ahead: PMIs and consumer confidence
Markets are focused on the upcoming flash purchasing managers' index (PMI) data for France, Germany, the UK and the eurozone, due between 07:15 and 08:30 GMT. These figures will help to gauge the current state of the region's economies.

Eurozone consumer confidence data is also due out today at 14:00 GMT. Later in the day, US PMI and initial jobless claims data will be released, which could have a significant impact on the market.

Key Market Moves: Aegon and Deutsche Bank
Among individual stocks, Aegon (AEGN.AS) was a notable loser, falling 4% after the Dutch insurer reported a decline in its key capital generation figure for the first half of the year. This caused concern among investors and led to a sell-off.

Meanwhile, Deutsche Bank (DBKGn.DE) shares rose 2.5% after the bank reached a settlement with more than half of the plaintiffs who had accused it of underpayment. The progress was welcomed by the market, which was reflected in the bank's share price rising.

Looking Ahead: Key Data Expectations
Investors continue to closely monitor upcoming economic data, which could be key indicators for future market developments. Particular attention will be paid to the PMI and consumer confidence indicators, which will provide an indication of the current state of the European economy and may influence sentiment in other regions.
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Fed Makes Move: Rate Cut Sparks Sharp Rise in Wall Street Stocks

US Stocks Rise Sharply as Fed Chairman's Comments Hint at September Rate Cut
US stock markets posted significant gains on Friday as Federal Reserve Chairman Jerome Powell reiterated market expectations for a possible rate cut in September.

Powell: Now is the time to cut rates
During a highly anticipated speech at the Jackson Hole Economic Symposium, Powell said now is the time to cut the federal funds target. He noted that concerns about rising inflation have eased, allowing the Fed to be more flexible in its monetary policy.

"We have not seen a deterioration in the labor market, and we do not want to see one," Powell said in a speech that many analysts took as a clear signal to cut rates at the Fed's upcoming meeting. If the decision is made, it would be the first rate cut in four years.

Experts are confident that the Fed is ready for decisive action
The market reacted to these statements immediately. Detrick, the director of one of the analytical companies, expressed the opinion that the September meeting will open a series of further rate cuts that could continue until the end of the year. According to him, the Fed has made it clear that it is moving to an active phase of monetary easing.

Market soars: growth leaders and historical records
After the publication of Powell's statement, all three major US stock indexes experienced a significant rise. Large-cap companies such as Nvidia, Apple and Tesla stood out in particular, with their shares showing the greatest growth.

Small-caps and regional banks did not stand aside either, with indices rising by 3.2% and 4.9%, respectively. As Detrick noted, the financial sector has reached historical highs, and this rise confirms that the economy does not have serious threats on the horizon that could weaken the positions of regional banks and financial companies.

A week on the rise: markets continue to grow
At the end of the week, all three major US indices recorded positive dynamics, supported by the best weekly gain this year, demonstrated last week.

Week of anticipation: what data will influence the Fed's decision
Ahead of the September meeting of the US Federal Reserve, where the key interest rate decision will be made, analysts are expecting the receipt of a number of important economic data.

The key ones will be the revised figures for the gross domestic product (GDP) for the second quarter from the Commerce Department and the report on personal consumption expenditures (PCE), which contains the PCE price index, the Fed's main indicator of inflation.

All S&P 500 sectors are in the green: real estate leads
All 11 key sectors of the S&P 500 index ended the trading session in positive territory. The real estate sector stood out in particular, showing the most significant gain, rising by 2.0%. This growth was provided by confident investments and positive market sentiment, which supported the overall upward trend.

Workday Surprises Market: Shares Soar on Good News
HR software company Workday (WDAY.O) beat market expectations for quarterly revenue. Moreover, the company announced its intention to buy back its own shares for $1 billion. The news caused a real boom in the market: Workday shares jumped by 12.5%, becoming the leader in growth on the Nasdaq exchange.

Ross Stores and Intuit: Contrasts in the Retail Sector
Discount retailer Ross Stores (ROST.O) also showed positive dynamics, rising by 1.8%. This happened after the company raised its profit forecast for the 2024 fiscal year, which strengthened investor confidence.

At the same time, shares of Intuit (INTU.O), known for its Turbo Tax product, fell by 6.8% after publishing a quarterly report that did not meet expectations. The disappointing results caused a sharp decline in investor interest in the company.

Markets on the move: Stocks continue to rise
On the New York Stock Exchange (NYSE), the number of advancing stocks significantly exceeded the number of declining ones — the ratio was 8.08 to 1. On the Nasdaq, the situation was also in favor of advancing stocks, where there were 3.68 advancing ones for every declining one. This trend confirms investors' confidence in the stability of the economy and the upcoming decisions of the Federal Reserve.

S&P 500 and Nasdaq continue to break records: the market is on the rise
The American stock market is once again showing confident growth, confirming the positive sentiment of investors. The S&P 500 index recorded 81 new 52-week highs, without recording a single new low. At the same time, the Nasdaq Composite noted 149 new highs and 51 new lows, which underlines the high activity in the market.

Trading Volumes and Indices: Steady Gains on Wall Street
Trading activity on U.S. exchanges showed good results, although the total volume of transactions amounted to 10.57 billion shares, slightly below the average of the last 20 trading days (11.88 billion). Despite this, the key indices continued to rise.

The Dow Jones Industrial Average rose by 1.14%, reaching 41,175 points. The S&P 500 added 1.15% and stopped at 5,634, very close to its all-time high. The Nasdaq Composite showed the biggest gain among the major indices, increasing by 1.47% and reaching 17,877 points.

European and Asian Markets: Mixed Results
European exchanges also saw gains. The broader STOXX 600 index rose 0.5% to hit its highest in three weeks. The gain also put the index on track to end a third straight week of gains.

In Asia, the picture was mixed, with stocks outside Japan down slightly, 0.1%, while Japan's Nikkei rose 0.4%. The gains were supported by positive investor reactions to inflation data and comments from Bank of Japan Governor Kazuo Ueda, who has signaled a willingness to raise interest rates if economic data and inflation are in line with expectations.

Global Trends: MSCI Reaches New Levels
The impact of recent events on the global economy was reflected in the rise in the MSCI World Index, which rose about 1.1%. Despite the recent turmoil in early August, the index has risen above its all-time peak reached in mid-July, signaling a recovery in global markets and investor confidence in the stability of the global economy.

Traders Raise Rates as Rate Cut Expectations Increase
Following Fed Chairman Jerome Powell's speech, traders have increased their expectations for a rate cut in September. Fed funds futures now offer a 37% chance of a 50 basis point cut, up from 25% the day before. A total of 106 basis points of rate cuts are expected by year-end.

Powell: Fed Policy Future Dependent on Data
Jerome Powell stressed in his speech that the Fed's policy direction is clear, but the timing and speed of rate cuts will be determined by economic data and changing risks. These statements were an important signal for the market, prompting investors to revise their forecasts.

Treasury Bonds and Currencies: Yields and the Dollar Fall
U.S. Treasury yields fell amid growing expectations for a rate cut. The 10-year yield fell 5.9 basis points to 3.803%, while the 2-year yield, which is more sensitive to changes in interest rate expectations, fell 9.7 basis points to 3.9132%. Amid these changes, German bunds remained steady, yielding at 2.226%.

There was also significant volatility in currency markets. The US dollar weakened, while sterling strengthened, reaching a more than two-year high. The euro also showed gains, rising to $1.1189, its highest in a year.

Japanese yen strengthens despite inflation data
The Japanese yen also strengthened, as the dollar fell 1.36% to 144.27 and comments from Bank of Japan Governor Kazuo Ueda indicated that he was prepared to raise rates if economic conditions were as expected. However, data released in Japan earlier showed that core inflation accelerated for a third month in a row, but the slowdown in demand-driven price growth does not yet indicate the need for an immediate change in interest rate policy.

FX Play: Dollar Weaker Amid Rate Cut Expectations
The currency market is always based on relative expectations, and the prospect that the Federal Reserve will soon begin cutting rates along with other major global banks has led to a weakening of the dollar, said Uto Shinohara, managing director and chief investment strategist at Mesirow in Chicago. According to him, the market is already pricing in future changes in Fed policy, which reduces the attractiveness of the dollar against other currencies.

Oil Market: Sharp Price Jump After Decline
Oil prices have jumped sharply by more than 2%, recouping earlier losses associated with a rise in U.S. crude inventories and a decrease in China's oil demand forecasts. This recovery demonstrates the volatility of the oil market, where everything from inventory data to demand expectations can cause significant changes in prices.

Gold Is Back on the Rise: The Price of an Ounce Nears a Record
Gold continues to strengthen its position, showing a gain of about 1.1%, reaching a price of $2,510 per ounce. This value is close to the record high, which was set just a few days earlier on Tuesday at $2,513 per ounce. Investors continue to invest in gold, seeing it as a safe haven asset in the face of economic uncertainty.
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Market Tectonics: Boeing and PDD Holdings Pull Down, Oil Stocks Rally Ahead

Tech Giants Slip as Market Awaits Nvidia's Quarterly Report
The S&P 500 ended lower on Monday, despite investors' growing expectations for Nvidia's upcoming quarterly report. The AI chipmaker saw its shares fall amid uncertainty surrounding its report, which is due out this week.

Meanwhile, investors are keeping a close eye on upcoming inflation data for clues about potential changes in the Federal Reserve's interest rate policy.

Nasdaq Slips, Dow Jones Surges
The tech-heavy Nasdaq also slipped, while the Dow Jones Industrial Average managed to stay afloat, helped by giants like Caterpillar and American Express. Despite the overall decline, the Dow ended the day with a small but positive gain, helped by a nearly 1% gain in those stocks.

Nvidia Expectations Are Peak
Nvidia, the leader in AI chips, is set to report its quarterly results on Wednesday. Investors are pinning their hopes on the company's results, which have risen an impressive 160% year-to-date, accounting for a significant portion of the S&P 500's 18% gain.

"Risky Investing in Focus"
"Nvidia is in the spotlight this week as a barometer for 2024 risk investing," analyst McMillan said. He stressed that Nvidia's success or failure could have a major impact on the market, given the company's importance in the AI sector.

Cautious Expectations
Still, there is growing anxiety among investors. Some fear that if Nvidia's guidance falls short of lofty expectations, it could derail the current rally in AI stocks like Microsoft and Alphabet.

"There is a concern that Nvidia could disappoint," warns Jake Dollarhide, CEO of Longbow Asset Management. "When the market finds confidence without considering the possibility of negative news, that's when the news comes."

Market Under Pressure: PDD Holdings and Tesla Slip
Shares in PDD Holdings, the U.S. unit of the Chinese company behind the popular Temu platform, have plunged nearly 29% after the company failed to meet investor expectations for its second-quarter earnings. The significant drop has raised concerns in an already tense market.

Tesla hit by new tariffs
Tesla also found itself in the spotlight, losing 3.2% of its market value. The reason was the unexpected move by Canadian authorities, who, following the example of the United States and the European Union, announced the introduction of a 100% tariff on the import of Chinese electric cars. This move could seriously affect Tesla's sales in the region and threaten its market position.

Stock indices: S&P 500 and Nasdaq in the red, Dow Jones afloat
The major stock indices ended the day in different directions. The S&P 500 index fell by 0.32%, stopping at 5,616.84 points. The tech-heavy Nasdaq suffered more, losing 0.85% and ending the session at 17,725.77 points. Meanwhile, the Dow Jones Industrial Average managed to stay in positive territory, adding 0.16% to close at 41,240.52.

Tech Down, Energy Up
Of the 11 sectors in the S&P 500, six ended the day lower. The information technology sector was the most pressured, falling 1.12%. Consumer discretionary was also under pressure, losing 0.81%. However, amid geopolitical tensions in the Middle East and related oil supply disruptions, the energy sector showed the opposite dynamics, jumping 1.11%.

Boeing Slips Amid NASA News
Boeing shares fell 0.85% after it became known that NASA has chosen SpaceX as the primary partner to return astronauts to Earth next year, choosing its vehicle over Boeing's Starliner.

Positive Signals from the Fed: Wall Street on the Rise
Stock markets rose on Friday, with the S&P 500 approaching its all-time highs. This happened amid statements by Federal Reserve Chairman Jerome Powell that it was time to lower borrowing costs. Powell emphasized that the reduced risk of inflation and stabilization of labor demand created the conditions for such a decision, which was a positive signal for investors.

Bets on a decrease: The market awaits the Fed decision
There is some expectation in the money market, with traders estimating the probability of a 25 basis point cut in September at 70%, and a 50 basis point cut at 30%. These forecasts are based on data from the FedWatch tool from CME Group, which closely tracks investor sentiment.

Inflation Indicators in Focus
Friday's July personal consumption spending data, a key measure of inflation for the Federal Reserve, could be a key factor in its policy outlook. The data could provide insight into the trajectory of the Fed's monetary easing, which could in turn impact market sentiment.

Corporate Earnings: Dell, Salesforce, and Other Giants
Investors will be focused on earnings this week from companies like Dell, Salesforce, Dollar General, and Gap. These reports could provide insight into the health of the corporate sector and provide additional guidance to the market.

Stock Market Balance
On the stock market front, the S&P 500 showed a modest 1.1-to-1 advantage over declining stocks. Overall, declining stocks outnumbered advancing stocks in the U.S. by 1.2-to-1, suggesting some volatility among market participants.

Volumes remain low
Trading activity on US exchanges was below average, with volumes of 9.5 billion shares compared to the average of 11.9 billion shares over the past 20 sessions. This may indicate that investors are taking a wait-and-see approach amid uncertainty about the Fed's future moves.

Global markets on hold
World stock markets also reacted to expectations of an imminent cut in US interest rates. Despite rising oil prices, caused by tensions in the Middle East, markets closed in the red. European stocks ended the day slightly lower, while London, closed for a public holiday, showed sluggish results. Japan's Nikkei also slid amid a stronger yen, ending trading down almost 0.7%.

Indices closed mixed: Dow Jones rises, Nasdaq falls
US stock indices ended the trading session with mixed results on Monday. The Dow Jones Industrial Average rose 0.16% to 41,240.52. Meanwhile, the S&P 500 lost 0.32% to end at 5,616.84 and the Nasdaq Composite fell 0.85% to end the day at 17,725.77. The MSCI World Index also fell 0.20% to end at 829.64.

Market Digests News: Reaction to Powell's Comments
Stock markets continue to react to a flurry of news, including recent comments from Federal Reserve Chairman Jerome Powell. "We saw a rally on Friday driven by Powell's comments and some strong durable goods orders data," said Ben MacMillan, principal and chief investment officer at IDX Insights in Florida. However, he added that historically, rate cuts often foreshadow weakness in the stock market because the cuts come for a reason.

Oil Futures Rise Amid Market Jitters
Brent crude futures ended the day up 3.05% to $81.43 a barrel. U.S. crude also posted significant gains, rising 3.5% to $77.42 a barrel. This reflects market volatility and investor anxiety amid global economic uncertainty.

Durable Goods Orders Beat Expectations
New data from the U.S. Commerce Department showed a sharp rise in orders for durable goods such as toasters and airplanes. These orders increased 9.9% in July, a significant rebound from a decline in June and beating analysts' forecasts. The surge signals a rebound in demand for U.S. manufactured goods.

Powell signals possible easing
Jerome Powell stressed at a symposium in Jackson Hole on Friday that the Fed is ready to ease monetary policy, noting the need to prevent further weakness in the labor market. His remarks drew interest from investors expecting lower interest rates to support the economy, but also hinted at possible challenges ahead.

European Central Bank remains cautious: Progress in tackling inflation, but risks remain
European Central Bank chief economist Philip Lane gave a cautiously optimistic assessment of the current situation at a symposium in Jackson Hole. According to him, the ECB has made significant progress in reducing eurozone inflation to its target of 2%, but stressed that it is too early to guarantee a final victory. The comment reflects the central bank's caution about the next steps in monetary policy.

Bond yields rise as market braces for rate hike
On the back of Lane's comments, the yield on the benchmark 10-year Treasury note rose 1.3 basis points to 3.82%. Two-year notes, which are more sensitive to interest rate changes, also rose 2.7 basis points to 3.94%. This suggests that markets are beginning to price in potential policy changes.

Market Expectations: Rates Under Closer Attention
Fed funds futures are fully pricing in a quarter-point rate hike at the Fed's upcoming Sept. 18 meeting, and are also offering a 39.5% chance of a more dramatic 50 basis point move. Investors are looking for 103 basis points of easing by the end of the year and another 122 basis points in 2025.

ECB Continues Rate Cuts
The European Central Bank has already started its easing cycle, cutting rates by 25 basis points in July. Two more such cuts are expected this year. Ben McMillan of IDX Insights expects the ECB to cut rates by 75 basis points this year, but he believes the market may adjust its expectations towards a less aggressive rate cut.

Key Economic Data on the Horizon
Key data on personal consumption and core inflation in the US are due on Friday, along with preliminary inflation data from the EU. These reports could be crucial for determining the direction of monetary policy in September, and most analysts expect them to support the idea of rate cuts.

Japanese Yen Strengthens Against Dollar
In the forex market, the Japanese yen strengthened to a three-week high against the US dollar, reaching 143.45 yen per dollar. However, the dollar then partially recovered its positions, increasing by 0.14% to 144.56 yen. This increase in the yen indicates increased investor interest in safe assets amid global economic uncertainty.

Dollar gains strength: index strengthens amid euro weakness
The dollar index, which tracks the exchange rate of the American currency against six major currencies, including the euro and the yen, showed a rise of 0.24%, reaching 100.84. At the same time, the euro weakened by 0.28%, falling to $1.1159. This movement reflects the strengthening of the dollar amid global economic uncertainty and demand for safer assets.

Gold continues to rise: investors seek safe havens
Gold prices continue to show steady growth, approaching their historical highs. Spot gold rose 0.31% to $2,518.27 an ounce amid increased demand for safe-haven assets. U.S. gold futures also showed positive dynamics, rising 0.28% to $2,515.50 an ounce. The gains highlight investors' desire to protect their capital amid instability in financial markets.
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Nvidia rally saves Wall Street, Asia shares fall on weak PDD Holdings, Nongfu Spring earnings

Wall Street Rises: Records Ahead of Nvidia Earnings
The S&P 500 ended slightly higher on Tuesday, while the Dow Jones closed at a record high. Investors are eagerly awaiting Nvidia's quarterly earnings report on Wednesday, which could shed light on where the market is headed. Additionally, economic data due later this week could provide further clues about a possible interest rate cut.

Tech Bigs in Focus
The tech sector has been mixed, especially ahead of earnings from Nvidia (NVDA.O), the semiconductor giant that has been at the center of Wall Street's recent rally in artificial intelligence stocks. Nvidia shares rose 1.5% to become the most traded stock on U.S. markets, according to LSEG.

Nvidia shares have risen an astonishing 159% since the start of 2024, making the company the leader in the AI tech race. With competition and costs rising among giants like Microsoft (MSFT.O) and Alphabet (GOOGL.O), investors are watching Nvidia closely for more data on the state of the industry.

Expectations are high: Nvidia in focus
"Nvidia has an extremely high bar to meet, not just in terms of its financials but also in terms of its vision for the future of AI. This could have a significant impact on the entire tech sector, which has recently seen a downturn," said Ross Mayfield, an investment strategist at Baird.

Apple and Amazon: Opposite Directions
Apple (AAPL.O) shares ended the session up slightly 0.4%, while Amazon (AMZN.O) shares fell 1.4%.

The S&P 500 Index rose 0.16% to close at 5,625.80, underscoring investors' cautious optimism ahead of major market events.

Nasdaq and Dow Jones: Steady Gains Amid Expectations
On Tuesday, the Nasdaq Index rose 0.16% to 17,754.82, while the Dow Jones Industrial Average edged up 0.02% to end the day at a record high of 41,250.50. This was the second straight day that the Dow Jones has set a new high, underscoring the market's resilience.

Tech and Finance: The Gainers
Of the S&P 500's eleven major sectors, six ended the day with positive dynamics. The leader was the information technology sector (.SPLRCT), which added 0.63%. In second place was the financial sector (.SPSY), which rose 0.48%. The results suggest that investors continue to bet on leading industries despite economic uncertainty.

Consumer Confidence and the Labor Market: Contrasting Signals
Data released on Tuesday showed that U.S. consumer confidence hit a six-month high in August. However, despite the optimism, consumers showed concerns about the labor market, especially after the country's unemployment rate rose to a nearly three-year high of 4.3% last month.

Awaiting Key Economic Data
Investors now turn their attention to Friday's release of personal consumption spending data for July, which could provide further clues about the possible pace of interest rate cuts. Ahead of that event, traders are actively speculating on the likelihood of the Federal Reserve cutting rates by 25 or 50 basis points in September, based on data from the CME Group's Fed Watch tool.

Economic Outlook: Recession Risks Rising
Meanwhile, UBS Global Wealth Management raised its chances of a U.S. recession to 25% from 20%, citing a weakening labor market. The move reflects growing concerns about a possible economic slowdown despite continued gains in stock markets.

Paramount Global: Slump as Deal Drops
Paramount Global (PARA.O) shares plunged more than 7% after Edgar Bronfman Jr. decided to drop his bid for the company. The move cleared the way for Skydance Media to take control of Shari Redstone's media empire, sending the stock sharply lower amid uncertainty about the future.

Tesla: Slump as Trade Barriers Rise
Tesla (TSLA.O) shares fell 1.9% after the Canadian government announced a 100% tariff on imported electric vehicles made in China. The measure will affect all electric cars coming from China, including those made by Tesla, raising investor concerns about a potential decline in demand in the region.

Super Micro Computer under pressure: Hindenburg Research steps in
Super Micro Computer (SMCI.O) shares fell 2.6% after Hindenburg Research said it had taken a short position in the AI-focused server maker. The announcement added to the tension around the company, sending its stock sharply lower, underscoring the influence of big players on market volatility.

Housing: High mortgage rates under pressure
The PHLX Housing Index (.HGX) fell 1.2% amid data showing single-family home prices fell in June. Rising mortgage rates continue to weigh on housing demand, raising concerns about the future of the sector.

Market balance: Declines dominate
Amid mixed economic data, decliners outnumbered advancers in the S&P 500 (.AD.SPX) by 1.1 to 1. However, the S&P 500 posted 50 new highs and just one new low, while the Nasdaq posted 62 new highs and 57 new lows, indicating continued uncertainty among investors.

Trading Volumes: Market Activity Declines
Trading volumes on U.S. exchanges were below average, with 8.6 billion shares traded, well below the 11.9 billion average over the past 20 sessions. This decline in activity may indicate that investors are waiting for more concrete cues to inform their decisions.

Global Markets: Nvidia Results Awaited
Global stock markets were poised for new records on Wednesday, but further developments depended on the upcoming results from semiconductor investor favorite Nvidia. Meanwhile, the British pound hovered near a 2.5-year high amid expectations that the U.K. could lag the U.S. in cutting interest rates.

Asia Pacific: Mixed Results
MSCI's broadest index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) fell 0.2%. Meanwhile, Japan's Nikkei (.N225) was unchanged, indicating that investors in the region are cautious amid global economic challenges.

Oil: Uncertainty on Chinese demand
After the recent surge in tensions in the Middle East, oil prices have come under renewed pressure. The main factor was growing concerns about weak demand from China, which has caused a pullback in prices. Brent crude futures are trading just below $80 a barrel, reflecting uncertainty in global markets.

Nvidia: A Game-Changing Giant
Nvidia's (NVDA.O) market value continues to soar, driven by its leading role in developing artificial intelligence hardware. Since 2019, the company's shares have risen a whopping 3,000%, and its market cap has reached $3.2 trillion. This makes Nvidia a key player whose moves affect the entire market.

Nvidia's Market Impact: Forecasts and Expectations
According to Capital.com analyst Kyle Rodda, Nvidia's results not only determine the future of the company itself, but also set the tone for the entire tech sector. "Nvidia's revenue outlook serves as an indicator of the level of investment in AI, as well as the prospects of other large tech companies," Rodda said.

Global Markets: Moderate Growth and Caution
The S&P 500 (.SPX) showed a slight increase of 0.2% in the latest session, but Asian futures remained stable. Nasdaq 100 futures fell 0.1%, while FTSE futures rose 0.2%, reflecting mixed sentiment in markets.

Hong Kong: Consumer stocks fall
In Hong Kong, the Hang Seng (.HIS) index fell 1.1%, led by declines in consumer stocks. Particularly hard hit was water maker Nongfu Spring (9633.HK), whose shares fell 12% after weak financial results. This came amid a negative outlook from discount online retailer PDD Holdings, adding to the negative sentiment.

Tabcorp: Biggest drop in 15 years
Shares in Australian gambling company Tabcorp suffered a sharp decline, falling 17% to their lowest in four years. This was the biggest decline since 2008. The collapse was triggered by the company's warning that rising compliance and other costs would mean it would miss its profit targets.

Asian Markets: Stability Amid Currency Swings
In Asia, debt and currency markets were broadly stable. However, the Australian dollar briefly jumped to its highest since January at $0.6813. The gain was fueled by slightly better-than-expected inflation data, which sparked short-term optimism among investors.

Global Currencies: Dollar Slips
In global markets, the dollar's weakness, fueled by expectations of a US rate cut, helped other currencies gain. With short-term US interest rates above 5.25%, investors were starting to speculate that this is where the biggest declines will occur. In Asia, the dollar steadied at 144.42 yen and also strengthened 0.3% to $1.1145 per euro.

Interest Rate Outlook: Is a Cut Imminent?
Interest rate futures are now pricing in the possibility of a 100 basis point rate cut in the US this year. Last week, Federal Reserve Chairman Jerome Powell reiterated the possibility of a cut soon, saying "the time is now." The statement supported investor expectations for looser monetary policy in the near future.

BoE: Cautious Approach, Strengthening Pound
Unlike the US, the Bank of England has remained cautious in its actions, making sterling the best-performing currency in the G10 so far this year, up 4.1%. Sterling hit its highest in more than two years on Tuesday, hitting $1.3269, before retreating to $1.3227 in Asian trading.

UK Inflation: A Persistent Threat
Rabobank senior strategist Jane Foley said in a note that UK services inflation remains "uncomfortably high," adding pressure on the Bank of England and keeping the pound high. This confirms the need for further measures to combat inflation risks in the country.

BoE rates: Caution above all
Experts believe that the Bank of England is likely to cut interest rates no more than once a quarter. This view contrasts with the outlook of the US Federal Reserve, which is expected to make four successive 25 basis point rate cuts from September to January. This approach reflects the Bank of England's caution in the face of economic uncertainty.

Bond markets: Narrow gap
The rates market was stable, with the 10-year US Treasury yield at 3.83% and the two-year yield at 3.87%. Notably, the gap between the two was the narrowest in three weeks, indicating a convergence of long-term and short-term yield prospects. This could signal a stabilization in investor expectations for future interest rate movements.

Bitcoin and Gold: Mixed Movements
Cryptocurrency markets came under severe pressure as heavy selling in New York sent Bitcoin down 4% to $59,450. Meanwhile, gold held its ground at $2,517 an ounce, showing resilience amid market volatility. The mixed movements highlight growing instability in the financial sector and investors' differing perceptions of safe haven assets.
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Blackwell Delay, Stock Drop: What's Happening at Nvidia?

Nvidia: Investor Expectations Were Not Met

Nvidia's (NVDA.O) quarterly guidance on Wednesday disappointed investors who had been counting on a continued run for the company, a symbol of success in generative AI. While Nvidia delivered impressive results, it was not enough to meet lofty market expectations.

The company's shares fell 6% in after-hours trading, dragging down other chipmakers. The report was a moment of truth for the tech sector, where even Nvidia's strong results have drawn mixed reviews. Despite impressive financials, including strong growth and profits, investors were left scratching their heads.

Strategy in Question

Carson Group chief market strategist Ryan Detrick noted that the problem was the scale of expectations. "The bit size this time was much smaller than we've seen in the past," he explained. Even the company's updated guidance failed to excite investors in the same way it had in previous quarters, he said. "Nvidia remains a standout with 122% revenue growth, but it appears the bar was set too high this earnings season," he added.

Guidance Underperforms

While Nvidia's revenue and gross profit guidance for the current quarter were close to analyst expectations, they failed to continue the trend of recent quarters in which the company has consistently beaten Wall Street estimates. This eclipsed even the impressive figures for revenue and adjusted profit in the second quarter, as well as the announcement of a $50 billion share buyback.

Nvidia has shown more than 200% revenue growth over the past three quarters, but each success puts more pressure on the company. As Wall Street continues to raise its targets, Nvidia now faces a challenge that is becoming increasingly difficult to overcome.

Nvidia is betting on Blackwell

Nvidia announced that it has begun shipping test samples of its new chips, codenamed Blackwell, to partners and customers. These chips have been finalized and are ready for market. The company expects their sales to bring in several billion dollars in the fourth quarter, which should support the current financial results.

However, even such ambitious plans could not save the market from a wave of sell-offs. Shares of chipmakers such as Advanced Micro Devices (AMD.O) and Broadcom (AVGO.O) fell almost 4%. Asian giants SK Hynix and Samsung also felt the impact, falling 4.5% and 2.8%, respectively, in Thursday morning trading.

Market on Edge: What Nvidia's Decline Means

Nvidia's fate largely determines the dynamics of the entire tech sector. The company's shares have soared more than 150% since the start of the year, adding $1.82 trillion to its market value and pushing the S&P 500 to new all-time highs. However, if the stock continues to slide after the close of trading on Wednesday, the company could wipe out as much as $175 billion in market value.

The outlook has raised concerns among investors about potential ROI issues in generative AI, with some beginning to question whether tech giants can continue to invest so heavily in the data centers needed to support AI without risking their bottom lines. These concerns have already begun to reverberate through the market, dampening the recent AI-related gains in stocks.

AI Giants: What's Next for Them?

Nvidia's biggest customers, such as Microsoft, Alphabet, Amazon, and Meta Platforms (a banned organization in Russia), are expected to spend more than $200 billion on capital expenditures in 2024. Much of that money is being spent on building AI infrastructure.

But even those investment plans haven't kept the tech giants' stocks from falling. They were down less than 1% in over-the-counter trading on Wednesday, reflecting growing tensions in the market. Whether Nvidia and other tech leaders can live up to investors' lofty expectations remains an open question.

Investors are starting to worry about the future of AI

The once-unshakable generative AI market is starting to raise more and more questions among investors. "The entire market is now kind of tied to Nvidia's success, and that's becoming increasingly worrisome," eMarketer analyst Jacob Borne said. It seems like any swing in Nvidia's performance could have a significant impact on the overall perception of the AI sector.

Regulators are ramping up the pressure

Nvidia is also facing increasing pressure from regulators. In its latest quarterly report, the company reported requests for information from regulators in the US and South Korea. The requests cover various aspects of Nvidia's business, including GPU sales, supply chain allocation, base models, and partnerships and investments in AI companies.

Previously, the company had only mentioned similar requests from regulators in the EU, UK, and China. In this context, it is particularly noteworthy that the French antitrust authority is preparing to charge Nvidia with alleged anti-competitive practices. US media have also reported that Nvidia is being investigated by US regulators for possible attempts by the company to tie its networking equipment to popular AI chips.

Profit outlook: high, but under pressure

Despite the challenges, Nvidia continues to deliver strong financial results. In the third quarter, the company expects adjusted gross margins of 75%, with possible deviations of 50 basis points. For comparison, analysts predict a slightly higher figure of 75.5%, which, however, is not much different from the second quarter, where Nvidia posted a profit of 75.7%.

Even taking these figures into account, Nvidia's gross margins remain significantly higher than those of its competitors. In particular, AMD showed an adjusted profit of 53% in the second quarter. The gap is due to the high prices of Nvidia's chips, which continue to lead in speed and performance. However, the question remains whether the company's strong performance can be sustained amid mounting regulatory pressure and growing investor anxiety.

Nvidia's Outlook: Falls short of lofty expectations

Nvidia is forecasting revenue of $32.5 billion for the third quarter, with a 2% margin of error, slightly above the average analyst estimate of $31.77 billion, according to LSEG. The company posted revenue of $30.04 billion in the second quarter, significantly beating expectations of $28.70 billion. Adjusted earnings per share were 68 cents, also above the 64 cents expected.

Impressive Growth in the Data Center Segment

One of the keys to Nvidia's success is its rapid growth in data center sales. In the second quarter, this segment brought in $26.3 billion for the company, up 154% year-over-year and well above the $25.15 billion forecast. Compared to the first quarter, revenue in this segment increased by 16%.

In addition, Nvidia continues to generate significant revenue from the sale of chips to gaming and automotive companies, which also supports the company's overall financial results.

The market reacts to forecasts

Despite such significant gains, shares of some other companies, such as Broadcom and Advanced Micro Devices, fell by about 2%, while Microsoft and Amazon fell by almost 1%. This is due to the general tension in the market caused by Nvidia's forecasts, which turned out to be less ambitious than investors expected.

If the downward trend in Nvidia shares that began on Wednesday continues on Thursday, it could be a serious blow to the company, although not as severe as the 11% drop recorded earlier this year.

Demand for AI Chips: High Expectations and Harsh Reality

Relentless demand for AI chips has allowed Nvidia to beat analyst estimates multiple times in previous quarters, driving investor expectations to new heights. However, today's more subdued forecasts have eclipsed even the company's impressive second-quarter revenue growth and strong adjusted profit, not to mention its massive $50 billion share buyback.

The question remains: Can Nvidia continue to meet rising market expectations, or will its financials face greater challenges in the future?

Over-Expectations: Nvidia Fails to Meet Market

Despite its impressive financial performance, Nvidia is facing a situation where even good results fail to meet investors' wildly high expectations. "They beat expectations, but when expectations are that high, it's hard to meet market expectations," says JJ Kinahan, CEO of IG North America and president of online broker Tastytrade. His words reflect the sentiment of many market participants who expected Nvidia to deliver on its promise.

Fall Volatility: Market Ahead of Unstable Season

A weak reaction to Nvidia's earnings report could set the tone for market sentiment heading into what has historically been a volatile fall. According to CFRA, the S&P 500 has fallen an average of 0.8% in September since World War II, making it its worst month of the year. The stats are adding to investor anxiety, especially in the context of the current market volatility.

Investors will also be focused on next week's U.S. employment report, which could shed light on whether the weakness in the labor market that rocked stock markets in early August has been overcome.

AI Rally: Is Confidence Losing?

The optimism surrounding AI technology has been fueled in large part by Nvidia's incredible run, which has helped fuel Wall Street's strength over the past year. However, confidence in the rally has begun to fade in recent weeks as earnings results have disappointed many investors.

Tech giants like Microsoft and Alphabet have been particularly hard hit, failing to meet high expectations. Investors have also expressed concern about the companies' significant spending on new AI technologies. This spending, aimed at maintaining their leadership in AI, has raised concerns about its impact on future profitability. Microsoft and Alphabet shares have remained under pressure since their earnings reports last month, reflecting growing skepticism in the market.

The market is heading into a potentially challenging period, where inflated expectations and historical volatility could weigh heavily on investors. Questions remain about whether tech leaders can continue to deliver on expectations, creating uncertainty heading into the fall.

Nvidia Outlook: Steady Growth Amid High Expectations

Nvidia provided guidance for its fiscal third quarter, expecting revenue of $32.5 billion, with a potential for variation of 2%. That number is well above the average analyst estimate of $31.8 billion, according to LSEG, and represents an impressive 80% growth compared to the same quarter last year.

Gross Margin: Ambitious Targets

The Santa Clara, California-based company is also targeting adjusted gross margin of 75%, with a potential for variation of 50 basis points. That's slightly below the average analyst estimate of 75.5%, reflecting the market's high expectations for the leading chipmaker.

Market reaction: Pre-earnings correction

Nvidia shares were down 2.1% on Wednesday ahead of its quarterly earnings report. However, despite this temporary dip, the company remains one of the leaders of the AI rally, with shares up 150% since the start of 2024. This phenomenon makes Nvidia one of the main beneficiaries of the current AI-driven boom on Wall Street.

Stock valuation: A comparative analysis

Interestingly, despite its impressive growth, Nvidia shares trade at a price-to-earnings multiple of 36 times earnings, below the average of 41 times over the past five years. Meanwhile, the S&P 500, which is often used to gauge major market trends, is trading at 21 times expected earnings, above the five-year average of 18 times. Nvidia's guidance continues to surprise and excite investors, but it also highlights the mounting pressure and high expectations for the company. Nvidia faces some tough quarters ahead, and the entire market will be watching to see if the company can meet and exceed the expectations it has set for itself.
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USD/JPY: Analysis and Forecast

During the Asian session today, following the release of the CPI (Consumer Price Index) data from Tokyo, the Japanese yen attempted to regain its recent gains against the U.S. dollar. The rise in inflation in Tokyo strengthens the Bank of Japan's aggressive monetary policy stance, which supports the yen and pressures the USD/JPY pair downward. However, during the European session, the dollar began to reclaim its strength.

The downward potential for the USD/JPY pair is limited as the U.S. dollar, following yesterday's stronger-than-expected economic data, is trying to maintain its recent gains. However, dovish comments from the Federal Reserve could restrain the further growth of the U.S. dollar.

Today, traders should focus on the U.S. PCE (Personal Consumption Expenditures) index for insights into the future direction of U.S. interest rates and potential trading opportunities.

From a technical standpoint, the pair is above the downward trendline, indicating a weakening of the bearish bias. However, the RSI (14-day Relative Strength Index) remains above 30, confirming the bearish trend.

Additionally, the USD/JPY pair may test the downward trendline at the 144.50 level.

A break below this level could see the pair move toward the seven-month low recorded on August 5, with further support at 140.25.

Regarding resistance, if the pair consolidates above the 145.00 level, it could open the path to 146.00, and a move into the 146.500 supply zone could increase the likelihood of a bullish trend.
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