Wall Street is preparing for a busy corporate earnings week, with Microsoft, Meta, Apple, and Amazon all set to announce quarterly results. This week's earnings will help determine whether tech stocks can rebound from last week's slump. On Monday, the stock prices of these companies and Tesla rose, pushing the S&amp;P 500 and Nasdaq slightly higher.
<h2>Small-cap stock indices fell more than 1%, leading the decline, while the S&amp;P and Nasdaq edged higher. Chip stocks surged before plunging, with NVIDIA rising over 2.8% before closing down 1.3%, and Tesla closed strong with a 5.6% gain.</h2>
On Monday, July 29th, the U.S. stock indices showed mixed trends, with small-cap and blue-chip stocks weakening while tech stocks edged higher.
Major U.S. stock indices rose in early trading before diving into negative territory. The Russell 2000 small-cap index rose over 0.4% in early trading before plunging over 1.4% to close down 1.09%; the Dow Jones Industrial Average, closely tied to the economic cycle, rose nearly 0.23% in early trading before falling nearly 0.5% to close down 0.12%; the S&amp;P 500 rose over 0.5% in early trading before falling over 0.2% to close up 0.08%; the tech-heavy Nasdaq rose over 1% in early trading before turning slightly positive to close up 0.07%.
In the final trading session, small-cap indices led the decline, falling over 1%:
Regarding investment strategies:
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Goldman Sachs pointed out that last week, the hedge fund industry saw a record high net selling of the U.S. industrial sector.
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The &#34;Tech Big Seven&#34; all rose except for NVIDIA. Tesla surged nearly 6.6% in early trading and closed up 5.6%, Google A rose over 1.5%, Amazon rose 0.38%, Microsoft rose 0.34%, Apple rose 0.13%, Meta remained flat, while NVIDIA surged over 2.8% in early trading before accelerating downwards to close down 1.3%.
It is worth noting that Morgan Stanley has nominated Tesla to replace Ford as the preferred auto stock in the U.S. auto industry, believing that Tesla's stock has a 40% upside potential, but stating that Tesla's expectations for autonomous taxi services are &#34;too high.&#34; In response to this news, Tesla reversed its previous week's decline of 8.11% and closed up 5.6% on Monday.
In addition, Apple released the first version of iPhone AI (Apple Intelligence). Only developers who have paid the $99 annual fee can access the iOS 18.1 test. On July 29th, Apple stated in a technical paper that its artificial intelligence (AI) system, Apple Intelligence, relies on two AI models pre-trained on Google-designed cloud chips. Apple's decision indicates that in AI training, some large tech companies may be seeking and finding alternatives to NVIDIA's graphics processing units.
Aletheia Capital upgraded Apple from sell to hold. D.A. Davidson raised Apple's target price from $220 to $250
Chip stocks surged at the beginning of the session and then plummeted. The Philadelphia Semiconductor Index fell by 0.3%; the industry ETF SOXX dropped by 0.21%; and the NVIDIA 2x Long ETF fell by 2.78%.
Popular chip stocks saw Ambarella rise by 11.54%, marking the largest single-day increase in 2022; while KLA Corp fell by 1.22%, Qualcomm fell by 0.78%, TSMC ADR dropped by 1.19%, Broadcom fell by 0.93%, AMD dropped by 0.17%, Micron Technology fell by 1.43%, Intel dropped by 1.66%, and Arm Holdings fell by 5.07%.
AI concept stocks had mixed performances. Version 2.0 NVIDIA concept stocks, autonomous sidewalk robot delivery company Serve Robotics rose by 46.67%, Snowflake rose by 0.44%, CrowdStrike rose by 1.03%, BullFrog AI rose by 0.33%, while NVIDIA concept stock SoundHound fell by 6.64%, Palantir fell by 0.37%, Oracle fell by 0.5%, Dell fell by 2.08%, and BigBear.ai fell by 6.58%.
HSBC lowered its rating on Arm Holdings, expecting the company's stock price to drop by nearly 30%. Analyst Frank Lee downgraded the stock to hold, stating that despite high patent fees, the AI PC narrative is not as optimistic as previously expected. Although we are optimistic that the share of patent royalties for AI personal computers (CPUs) will increase from 5% to 10% of the average selling price, and the average selling price per core will also rise, the overall unit (total potential market) still lacks transparency.
Chinese concept stocks had varied performances. The Nasdaq Golden Dragon China Index fell by 0.13%. Among ETFs, the China Technology Index ETF (CQQQ) dropped by 0.61%. The China Internet Index ETF (KWEB) rose by 0.15%.
Among popular Chinese concept stocks, ZEEKR rose by 3.3%, Tencent Holdings (ADR) rose by 0.11%, Li Auto rose by 0.78%, JD.com rose by 0.18%, Bilibili rose by 1.27%, Baidu rose by 1.71%, Alibaba rose by 2.73%, while XPeng dropped by 3.17%, Pinduoduo fell by 2.45%, NetEase fell by 1.52%, and Nio fell by 0.9%.
Other stocks with significant changes due to yesterday's after-hours and today's pre-market earnings reports include:
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Ambarella Semiconductor rose by 11.54%. The earnings report showed that Ambarella's adjusted EPS for the second quarter was $0.96 (analyst expectations $0.92), revenue was $1.74 billion (analyst expectations $1.73 billion), and third-quarter revenue is expected to be $1.70 billion to $1.80 billion (analyst expectations $1.78 billion).
Lattice Semiconductor (LSCC) ADR fell by over 10.84% after the market closed. Lattice Semiconductor's adjusted EPS for the second quarter was $0.23, with analyst expectations at $0.24
Second-quarter revenue was $1.241 billion, analysts expected $1.302 billion. Estimated third-quarter revenue is $1.17 billion to $1.37 billion, analysts expected $1.417 billion.
Amkor Technology (AMKR) fell 6.33% after hours. Amkor is expected to have an EPS of $0.42-$0.56 in the third quarter, lower than analysts' expectations of $0.64. Estimated third-quarter net sales are $17.9 billion to $18.9 billion, analysts expected $18.7 billion.
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European stock markets reversed their gains from last Friday and early trading to close lower. Investors are focusing on the release of financial reports from several companies this week and the Bank of England's interest rate meeting:
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The pan-European Stoxx 600 index fell by 0.20% to 511.79 points. The Eurozone STOXX 50 index fell by 0.97% to 4815.39 points. Most sectors declined, with the automotive sector leading the way with a 1.35% drop. Automaker Stellantis fell by 3.33%, while the healthcare sector rose by 0.66%.
Germany's DAX 30 index fell by 0.53%. France's CAC 40 index fell by 0.98%. Italy's FTSE MIB index fell by 0.51%. The UK's FTSE 100 index rose by 0.08%. The enough AEX index fell by 0.28%. Spain's IBEX 35 index fell by 0.43%.
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Notable individual stock movements:
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Due to lower-than-expected profit growth in the first half of the year, shares of beer giant AB InBev fell by over 10%. The latest financial report shows that AB InBev's organic growth in the first half was 5.9% (analysts expected 7.89%), and the operating profit is expected to grow by 4%-8% for the full year.
Philips' US stocks rose by over 14% at one point due to better-than-expected second-quarter earnings. Philips' adjusted EBITDA for the second quarter was €495 million, exceeding analysts' expectations of €426.3 million.
European luxury brand stocks generally declined. Hermes fell by 2.36%, almost completely erasing the gains from last Friday; L'Oreal, Burberry, Richemont, LVMH, Hugo Boss fell by 1.55%-1.19%, Pernod Ricard fell by 0.61%, Kering fell by 0.42%.
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<h2>US Treasury yields expected to see the longest consecutive monthly decline in three years, the 10-year US Treasury yield gap widened by about 3 basis points, Yellen lowered the US Treasury's third-quarter financing expectations</h2>
At the close, the more interest rate-sensitive two-year US Treasury yield fell by 0.62 basis points to 4.3791%, trading in the range of 4.3565%-4.3997% during the session. The benchmark 10-year US Treasury yield fell by 2.92 basis points to 4.1647%, the US Treasury's financing expectations report was released at 03:00 Beijing time, and the decline widened again after hitting a daily low of 4.1492% at 20:41
Later this week, the Federal Reserve will release its interest rate decision statement.
The latest data from the U.S. Department of the Treasury website shows that the size of the U.S. federal government debt has reached $34.997 trillion, just a step away from the $35 trillion mark. According to the data from the U.S. Department of the Treasury, as of July 25th, the size of the federal government debt has approached the $35 trillion mark. Based on calculations by the Peter G. Peterson Foundation, distributing these huge debts among the American people is equivalent to each person owing nearly $104,000.
The U.S. Department of the Treasury has lowered its estimate for quarterly borrowing size, expecting a decrease in cash buffer by the end of the year. The U.S. Department of the Treasury has lowered its financing expectations for the July-September period to $740 billion, a move that aligns with the expectations of most bond traders, who previously expected $847 billion on April 29th. For this quarter (July-September), the Federal Reserve's move to slow down the pace of reducing U.S. Treasury holdings has eased the government's need to sell more bonds to the public. Borrowing is expected to be $565 billion from October to December. The year-end cash balance is expected to be $700 billion, a forecast closely watched by traders as it may have potential implications for the upcoming debt ceiling debate.
Bond markets were relatively calm on Monday, with long-term bonds performing well (30-year bonds down 3 basis points, 2-year bonds down 0.62 basis points).
<h2>Traders &#34;Ignore&#34; Escalation of Conflict between Israel and Hezbollah, U.S. Oil Falls Nearly 2% Below 200-Day Moving Average, Brent Oil Falls Below $80 for the First Time Since June 10th</h2>
WTI September crude oil futures closed down $1.35, a drop of nearly 1.75%, at $75.81 per barrel, falling below the 200-day moving average (currently at $76.73), approaching the June 7th closing price of $74.80. Brent September crude oil futures closed down $1.35, a drop of over 1.66%, at $79.78 per barrel. Brent oil fell below the psychological level of $80 for the first time since June 10th.
Pre-market European stocks briefly touched daily highs, with U.S. oil rising nearly 0.69% to break through $77.50 per barrel, and Brent oil rising over 0.75% to surpass $81.70 per barrel. Subsequently, oil prices continued to decline, with a slight rise in early U.S. stock trading, followed by a sharp drop during midday trading. When U.S. stocks hit new daily lows, U.S. oil and Brent oil fell by approximately 2.3% and 2.2% respectively, approaching $75 and $79 per barrel, with Brent oil nearing the June 10th low of $79.08 per barrel. Both then saw a slight rebound
Crude oil prices fell to a near two-month low as traders seemed unconcerned about the risk of escalating conflict between Israel and Iran-backed militia Hezbollah, with U.S. crude oil futures dropping nearly 2% on Monday. Last Saturday, a rocket from Lebanon caused casualties in the Israeli-controlled Golan Heights area. Israel attributed the attack to Hezbollah, but Hezbollah has denied the accusation. The Israeli security cabinet on the 28th authorized Prime Minister Benjamin Netanyahu to decide how and when to respond to the rocket attack by Hezbollah from Lebanon.
Helima Croft, head of strategy at Royal Bank of Canada, stated that the geopolitical conflict between Israel and Iran escalated oil prices this spring, but since the exchange of fire between Iran and Israel in April did not lead to a larger conflict or pose a substantial threat to energy supplies, the oil market's focus on Middle East conflicts has been relatively subdued. Nevertheless, as Hezbollah's interests in the region are crucial to Iran, a direct conflict between Israel and Hezbollah could serve as a catalyst for involving OPEC member Iran in the conflict.
U.S. August natural gas futures fell over 4.93%, to $1.9070 per million British thermal units. European benchmark TTF Dutch natural gas futures rose by 4.70%, to €33.975 per megawatt-hour, reaching as high as €34.303 intraday, approaching the July 2 peak of €36.500. ICE UK natural gas futures rose by 4.78%, to 79.850 pence per therm, nearing the July 1 peak of 83.150 pence.
Analysts noted that the heatwave in North Asia raised concerns about fuel supplies, with European natural gas futures rising by 4.7% to a one-month high.
<h2>Central bank meetings are intensive this week, with the U.S. dollar slightly rising and speculation about a rate hike by the Bank of Japan supporting the yen</h2>
The U.S. Dollar Index DXY, which measures against a basket of six major currencies, rose by 0.23% to 104.558 points, with an intraday trading range of 104.138-104.752 points.
The Bloomberg Dollar Index rose by 0.26% to 1260.34 points, with an intraday trading range of 1255.33-1262.15 points.
The offshore Chinese yuan (CNH) fell by 81 points against the U.S. dollar to 7.2716 yuan, trading overall in the range of 7.2587-7.2739 yuan intraday.
Of note, a report released by UBS Asset Management recently stated that a survey showed that central banks around the world are planning to further increase their positions in the euro and the yuan in the coming year, with 70% of respondents investing or considering investing in the yuan. Looking at the long term (10-year period), the average target allocation of respondents to the yuan as a percentage of total reserves is 5.0%
In Asian currencies, the US dollar rose 0.14% against the Japanese yen to 153.98 yen, with an intraday trading range of 153.02-154.35 yen.
It is worth mentioning that the Bank of Japan will unveil detailed plans for quantitative tightening (QT) on Wednesday, announcing the first plan to reduce bond purchases. Sources say Bank of Japan officials have no intention of surprising market participants with the way they reduce bond purchases, as they are well aware of external expectations. Currently, the market generally believes that starting next month, the monthly bond purchase amount will be reduced from the current 6 trillion yen to 5 trillion yen, ultimately halving within two years.
Regarding interest rate hikes, while only about 30% of Bank of Japan observers list a rate hike as a base scenario, almost no one rules out this possibility. Sources reveal that some Bank of Japan officials are open to the idea of raising rates this month when inflation is in line with expectations; others believe that staying put while waiting for more data to see signs of consumer spending recovery will also be an option. Swap market pricing shows that the likelihood of a 15 basis point rate hike by July 31 is about 50%, up from 25% a week ago.
Bank of America believes that if the Bank of Japan raises rates on Wednesday taken together with a hint of rapidly reducing bond purchases (e.g. reducing monthly bond purchases to around 3 trillion yen within a year), the market will see this as the Bank of Japan shifting towards a hawkish stance, betting on a faster rate hike pace. The yen against the dollar is expected to rise to 145-148 yen, reaching its highest level since January.
Hedge funds betting against the yen are experiencing their largest pullback since 2011. Data from the U.S. Commodity Futures Trading Commission shows that in the two weeks leading up to July 23, leveraged investors cut 56,639 yen net short positions, the largest since early 2011. While still short, these funds are now the least bearish on the yen since February.
<h2>The rise in the US dollar puts pressure on gold prices, traders focus on this week's Fed interest rate meeting</h2>
The rise in the US dollar is weighing on precious metal prices. COMEX August gold futures closed up 0.05% at $2,382.2 per ounce, while COMEX September silver futures closed up 0.07% at $28.040 per ounce.
Spot gold hit a daily high in early Asian trading, briefly surpassing the $2,400 per ounce level, rising nearly 0.68% intraday; US stocks maintained their gains in pre-market trading, then turned lower in early US trading, falling by over 0.7% to nearly $2,360, with gold prices slightly rebounding at the close; spot silver rose over 0.9% in early Asian trading, breaking above the $28 integer level, with US stocks falling by over 2.2% in early trading, approaching the $27 integer level, and silver prices slightly rebounding at the close.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/03b394cb-db5b-4ac4-94c1-c2b3f0db2aa0.png/query-aW1hZ2VWaWV3Mi8yL3cvNjQw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/03b394cb-db5b-4ac4-94c1-c2b3f0db2aa0.png/query-aW1hZ2VWaWV3Mi8yL3cvNjQw"/> The rise in the US dollar leads to a decline in gold prices
Analysis shows that the US dollar has appreciated by about 0.3%, reaching a new high in over two weeks, making gold more expensive for holders of other currencies. In the first half of 2024, the gold consumption of the world's largest gold consumer country decreased by 5.6%, attributed to a decline in gold jewelry demand. However, the purchase of gold bars and coins has surged.
Following rocket attacks on the Israeli-occupied Golan Heights, concerns about escalating geopolitical conflicts have intensified. As a safe-haven asset in times of geopolitical risks, the demand for gold has continued to be supported. According to the latest data from the World Gold Council, gold ETFs for investor storage saw a net inflow of 9.8 tons last week. Gold ETFs are expected to see a net inflow for the third consecutive month in July, totaling 39 tons. In another major gold consumer country, India, the demand for jewelry, gold bars, and coins is expected to increase by 50 tons in the second half of 2024 compared to the previous year due to the country lowering gold import taxes to the lowest level in 11 years last week.
London industrial base metals have mostly declined for several consecutive days. The economic indicator &#34;Dr. Copper&#34; fell by 0.93% to $9026 per ton. London aluminum dropped by 1.66% to $2250 per ton. London zinc fell by approximately 1.20% to $2637 per ton. London lead remained flat at $2068 per ton. London nickel rose by $43 to $15837 per ton. London tin fell by about 0.93% to $29296 per ton.
Recently, after reaching new highs, the price of gold experienced a sudden brake. Additionally, prices of metals such as copper, aluminum, and nickel have softened continuously since hitting interim highs in late May. A private equity investor in Shanghai mentioned that for risk-averse investors, it is advisable to wait for further gold price corrections before physical investments. For medium-term investments, attention should be paid to logic, and unless good at timing the market, ordinary investors should not buy too much at once and can consider multiple rounds of increasing positions. The investor further stated that gold stocks have stronger resilience than gold itself. Investors seeking higher returns can buy gold stocks or related funds, while those preferring low volatility can choose physical gold or gold ETFs

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The US stock indexes were restless while waiting for the earnings reports of major technology and chip stocks. The S&P 500 and Nasdaq both turned lower before the midday break, with gains narrowing towards the end of the session, and the Dow Jones Industrial Average reversed lower again. Chip stocks initially rose but then fell slightly, with NVIDIA dropping over 1%. Tesla rose by 5.6%. Crude oil fell below the 200-day moving average. Wall Street is gearing up for a busy corporate earnings week, with Microsoft, Meta, Apple, and Amazon all set to report quarterly results this week

- Wall Street gears up for a busy corporate earnings week with Microsoft, Meta, Apple, and Amazon set to report quarterly results. Tech stocks saw a boost on Monday, with Tesla leading gains, pushing the S&P 500 and Nasdaq slightly higher. Small-cap stocks dropped over 1%, while chip stocks initially surged but later declined, with Nvidia rising over 2.8% before ending down 1.3%.
- Notable highlights include Morgan Stanley favoring Tesla over Ford in the automotive sector, predicting a 40% stock price increase for Tesla. Apple introduced its iPhone AI version, and HSBC downgraded Arm Holdings, anticipating a nearly 30% stock price drop due to concerns over AI PC narratives.
- In Europe, stock markets closed lower, focusing on upcoming earnings reports and the Bank of England's interest rate meeting. Stoxx 600 and Euro STOXX 50 indices fell, with the automotive sector leading losses. Individual stocks like Heineken and Philips saw contrasting movements based on earnings performance. Bond markets remained relatively calm, with long-term bonds performing well, while oil prices dipped due to escalating Israel-Hezbollah tensions.

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After rising 1%, the Nasdaq briefly turned lower, with small-cap indices and NVIDIA falling more than 1%, Tesla rising 5.6%, and US oil falling below the 200-day moving average