America’s Magnificent Seven Stocks Drop 5% in a Week

America’s Magnificent Seven Stocks Drop 5% in a Week: The American financial markets experienced a turbulent week,
with major company stocks suffering significant losses.
Investors eagerly await the earnings reports of technology giants at a critical time for Wall Street
.

 

Contents

Performance of the Technology Sector
Earnings Season
Performance of the Magnificent Seven
CrowdStrike Crisis
Analysts Expectations

 Investment Funds
Additional Analyses
Future Outlook

 

 

 

Performance of the Technology Sector

Technology companies led the losses in the “Standard & Poor’s 500” index,
heading towards its worst weekly performance since last April.
This period saw investors reducing their holdings of the winning stocks of 2024,
with expectations of market gains extending beyond the major companies due to the Federal Reserve’s interest rate cuts.

 

Earnings Season

Glenn Smith of GDS Wealth Management said, “Next week is crucial for the short-term trajectory of stock earnings,
as many giant technology companies will release their earnings reports.
A strong mix of high-tech earnings and declining inflation could turn the recent market downturn into a new phase of stock rallying.

 

Performance of the “Magnificent Seven”

The “Magnificent Seven” group of giant companies ended the trading week with a 5% decline.
The losses were more pronounced in chip manufacturing companies,
with an index closely following the performance of companies like
Nvidia and Intel dropping by 8.5%.
Despite investors pulling back from rotational trading, small companies rose by about 2% during this period.

 

CrowdStrike Crisis

Markets saw the collapse of Microsoft’s Windows systems globally
due to a failed software update by Crowd-Strike Holdings, a cybersecurity firm.
The “
Standard & Poor’s 500” index dropped to around 5,500 points, the tech-heavy Nasdaq 100 fell by 1%,
and the
Russell 2000 index of small companies declined by 0.5% after resuming trading.

 

 

 

 

Analysts Expectations

Strategists at Goldman Sachs expect the market to experience a corrective movement this summer due to weak economic data,
more cautious central bank expectations, and escalating political uncertainty ahead of the upcoming U.S. presidential elections.

 

Investment Funds

According to a team of analysts led by Michael Hartnett from Bank of America,
U.S. equity investment funds attracted about $45 billion in the week ending last Wednesday.
Small-cap funds received $9.9 billion of the invested funds, while large-cap funds gained $27.4 billion.

 

Additional Analyses

Hartnett mentioned that stocks might drop after the Federal Reserve cuts interest rates,
considering it a “buy on rumor, sell on fact” opportunity.
His team is also optimistic about bonds,
expect any new tariffs Trump imposes in the next 12 months to have a more deflationary than inflationary impact.

 

Future Outlook

Hedge funds, known as “smart money,” are preparing for the repercussions of the upcoming presidential election campaign.
They maintain cash liquidity and are ready for immediate deployment when stock volatility intensifies and prices fluctuate.

 

 

America’s  Magnificent Seven Stocks Drop 5% in a Week.

A Major Hit to U.S. Tech Stocks

A Major Hit to U.S. Tech Stocks: American tech companies face a significant challenge as the Biden administration
considers imposing strict restrictions on exporting chips to China, leading to a substantial decline in these companies’ shares worldwide.

 

Content

Major Stock Indices

Global Pressures on Chip Manufacturing Companies

Decline in Market-Capitalization Weighted Indices

Strict U.S. Restrictions

Performance of Major Indices

Bond Market Movements

Difficult Situation for Major Companies

Weak Technology Performance

One Path

End of the Typical Bullish Window

 

 

 

 

Major Stock Indices

In this context, major stock indices on Wall Street recorded significant declines,
The S&P 500 index dropped by more than 1%, while the Nasdaq 100 index fell by 2.5%.
The giants’ index wasn’t spared, dropping by 3.5%, and the 
Russell 2000 index of small companies declined by 0.6%.
Wall Street’s “fear gauge” – VIX – rose to its highest level since early May,
reflecting the anxiety and tension in financial markets.
These developments come at a sensitive time as investors await the Federal Reserve’s decision on rate cuts,
increasing the state of anticipation and instability in financial markets.

 

Global Pressures on Chip Manufacturing Companies

Chip manufacturing companies faced intense pressure from the United States to Europe and Asia.
Strong American companies like
Nvidia, Advanced Micro Devices, and Broadcom Inc. caused the closely watched semiconductor index to drop by 6%.
Across the Atlantic, ASML Holding NV shares fell by more than 10%, even after the Dutch giant announced firm orders.
These moves followed a decline in Tokyo Electron shares, which in turn led to a drop in Japan’s
Nikkei 225 index.


Decline in Market Capitalization Weighted Indices

Wednesday’s events repeated the recent trend of market-capitalization-weighted indices performing
much worse than mid-cap stocks due to the weakness of large-cap companies dominating these indices.
Since companies like 
Apple and Microsoft make up 7% of the S&P 500 index,
it is hard to offset the losses even when most index components rise, as happened today.

 

-Strict U.S. Restrictions

President Joe Biden’s administration informed allies that it is considering imposing strict restrictions
if companies like Tokyo Electron and ASML continue to grant China access to advanced semiconductor technology.
The United States is also considering imposing more sanctions on specific Chinese chip companies linked to Huawei Technologies.
Matt Maley from Miller Tabak + Co said, “This chip sector-related news is an unexpected event that can trigger sell-offs,
which in turn could be a catalyst for a tradable correction in the stock market,”
adding that the indices “have become significantly overbought.”

 

Performance of Major Indices

The S&P 500 index dropped by more than 1%, while the Nasdaq 100 index fell by 2.5%.
The giants’ index (the magnificent seven, i.e.,
Meta, Amazon, Tesla, Apple, Nvidia, Alphabet, Microsoft) dropped by 3.5%,
and the
Russell 2000 index of small companies declined by 0.6%.
Wall Street’s “fear gauge” – VIX – rose to its highest level since early May.
Among the few chip manufacturers that defied the sell-off were Intel and GlobalFoundries Inc.
The
Dow Jones Industrial Average rose for the sixth consecutive day, setting another record,
with financial stocks outperforming, boosted by strong results from U.S. Bancorp.

 

 

 

 

Bond Market Movements

The bond market saw small movements.
The Federal Reserve’s Beige Book showed slight economic growth and a slowdown in inflation.

The highlight speaker on Wednesday was Governor Christopher Waller,
who said that the Federal Reserve is close to cutting interest rates but has yet to reach that point.
The yen led gains among major currencies, rising by about 1.5%.

 

Difficult Situation for Major Companies

The Biden administration faces a delicate situation,
as American companies feel that export restrictions to China have unfairly punished them and are pushing for changes.
Meanwhile, allies need more reason to change their policies just a few months before the presidential election.
Strategists at Bespoke Investment Group said, “Usually, the impact of this kind of news isn’t long-lasting,
but in this case, we note that chip companies’ performance
has lagged the broader market over the past two weeks so far,”
adding, “So this is something to watch.”

 

Weak Technology Performance

The weak technology performance comes after a first half in which giants like Nvidia, Microsoft,
and 
Alphabet pushed the market upward,
extending valuations for these companies and leaving them in a more challenging position for the rest of 2024.

 

One Path

But can the market continue to advance without tech companies?
Jose Torres from Interactive Brokers said,
“Most of the stock gains this year came from a few companies
currently facing a direct threat from the political arena.”
He added, “The important question is whether the rest of the market,
which generally lacks exciting stories on a relative basis,
can compensate for the diminishing momentum in the magnificent seven’s stocks.”
At
Goldman Sachs, Scott Rubner says, “I’m not buying at lower prices.”
The tactical strategist bets that the
S&P 500 index has no path but downward,
as Wednesday, July 17, historically marks a turning point for stock index returns, citing data back to 1928.
What follows, he says, is August, typically the worst month for passive outflows from stocks and mutual funds.

 

End of the Typical Bullish Window

Jonathan Krinsky from BTIG says the market “is approaching the end of the typical bullish window,”
noting that sentiments remain complacent about surveys and transaction indicators.
Krinsky said, “Although the shift from large tech stocks to cyclical and small-cap stocks is encouraging,
it seemed somewhat forced over such a short period.”
He added, “Even if this rotation is long-term,
we likely won’t see that new leadership until we see a higher correlation correction,
then see what could result from it.”

 

 

A Major Hit to U.S. Tech Stocks

Mixed Performance of U.S. Indices

Mixed Performance of U.S. Indices: At the end of trading on Wednesday, U.S. markets’ indices showed mixed performance.
The
Dow Jones Industrial Average rose by 0.59% and recorded a new all-time high.
In contrast, the
S&P 500 Index fell by approximately 1.39%, and the Nasdaq Index dropped by about 2.76%.

 

Content:

Weak Growth in U.S. Production

Mixed Performance of U.S. Indices

Reasons for the Recent Strength of the Japanese Yen

 

 

 

Weak Growth in U.S. Production

Data released by the U.S. Federal Reserve for June showed that U.S. industrial production grew faster
than market expectations for the second consecutive month. Industrial production rose by 0.6% monthly,
compared to market expectations of only 0.3%.
The capacity utilization rate in the United States also increased to 78.8% in June,
higher than the market expectations of 78.6%.
It recorded 78.7% in May before being revised to 78.3%.

 

Mixed Performance of U.S. Indices:

At the end of trading on Wednesday, U.S. markets showed mixed performance in their indices.
The
Dow Jones Industrial Average rose by 0.59% and recorded a new all-time high.
In contrast, the
S&P 500 Index fell by approximately 1.39%, and the Nasdaq Index dropped by about 2.76%.

The communication, Oil & Natural Gas, and financial sectors saw gains.
In contrast, the technology, consumer services, and industrial sectors experienced losses,
leading to an overall decline in the general indices.

 

 

 

 

 

Reasons for the Recent Strength of the Japanese Yen:

In recent days, the U.S. dollar has seen a sharp decline against the Japanese yen.
This drop was due to repeated statements from members of the U.S. Federal Reserve suggesting a less aggressive monetary policy stance.

For instance, Federal Reserve member Waller mentioned that inflation data
has boosted confidence in the central bank’s ability to achieve its 2% inflation target.
He also indicated the possibility of slowing wage growth per this target.

Simultaneously, the Japanese yen received explicit support from statements made by Masato Kanda,
Japan’s Vice Minister of Finance for International Affairs.
Kanda warned about the yen’s depreciation and stressed that the relevant Japanese authorities
would not hesitate to respond appropriately if speculators caused excessive volatility in the foreign exchange market.

These statements from the Japanese official provided clear support for the yen against the dollar during the trading session.

 

Mixed Performance of U.S. Indices

U.S. Stocks Reach Record Levels Ignoring Trump’s Assassination Attempt

U.S. Stocks Reach Record Levels Ignoring Trump’s Assassination Attempt: U.S. stocks surged to all-time highs as market volatility expectations
failed after the assassination attempt on Donald Trump, which boosted his chances of reaching the White House.
Trump has chosen Ohio Senator J.D. Vance as his running mate for the presidential election
.


Contents

Jerome Powell’s Statements

A New Generation of Republicans

Major Stock Indices Rise

U.S. Bonds Rise

Analysts Reactions

Performance of Major Companies

Neil Dutta’s Comments

Greater Focus on Inflation Data

Electoral Impacts

Impact of the Assassination Attempt on Winning Chances

Republican National Convention

 

 

 

 

Jerome Powell’s Statements

Traders also closely monitored statements from Jerome Powell,
who noted that recent inflation readings had bolstered confidence and that the economy was performing “extremely well.”
He also pointed out that the labor market was heading towards better balance and that
the time lag between adopting monetary policy and its effects meant that the Fed could intervene before inflation reached 2%.
The Fed Chairman also clearly refused to signal any timing for interest rate cuts, stating that the policy was tight “but not overly so.”

 

A New Generation of Republicans

Vance, 39, is nearly four decades younger than the 78-year-old Trump.
He is a fresh voice contributing to the Republicans’ efforts and enhancing their appeal to the working class,
which previously formed a core base for the Democratic Party in battleground states like Michigan, Wisconsin, and Pennsylvania.

 

Major Stock Indices Rise

All major stock indices rose, with the S&P 500 achieving its 38th record high this year.
Trump Media & Technology Group Corp’s stock jumped by 30%.
The candidate’s chances boosted the positions of oil producers, weapons manufacturers, and private prisons.
His support for cryptocurrencies raised the value of Bitcoin and companies in the industry.
Tesla’s stock soared as Elon Musk endorsed Trump.
Solar energy and marijuana company stocks fell as Democrats became more supportive of these sectors.

 

U.S. Bonds Rise

Yields on 30-year U.S. bonds rose above those of 2-year bonds for the first time since January,
betting that Trump would adopt an expansionary fiscal policy if he won the U.S. presidential election in November. The dollar rose slightly.

 

 

 

 

 

Analysts Reactions

John Stoltzfus from Oppenheimer Asset Management said,
“We were shocked by the assassination attempt on former President Trump,
but we believe the markets will absorb the news quickly and without much fuss.
Shocking events do not deter investors; we expect them to remain focused on economic outcomes and earnings reports.”

 

Performance of Major Companies

The S&P 500 index rose to around 5630 points. The performance of major companies varied.
Apple shares peaked after Morgan Stanley classified it as the top pick.

Nvidia shares declined. The Russell 2000 index of small companies rose by 2%.
Goldman Sachs shares rose as earnings exceeded plans to reduce the pace of share buybacks.
Macy’s Inc. shares fell after the company ended acquisition talks.

 

Neil Dutta’s Comments

Neil Dutta from Renaissance Macro Research said,
“The only reason for not cutting interest rates in July is the illogical mindset followed by institutions when they say:
‘Well, we need to prepare the markets for that.’ I don’t understand it, but that is the case.”

 

Greater Focus on Inflation Data

Mark McCormick at TD Securities believes the markets are “less concerned with the elections”
and more eager to enjoy the decline in U.S. data surprises, especially the recent Consumer Price Index reading.

 

Electoral Impacts

Peter Boockvar from The Boock Report said, “Everyone is trading on their best Trump-related strategies—
but I think we’ve seen over the past century that stock market movements are more random than a president can impose.”

 

Impact of the Assassination Attempt on Winning Chances

According to PredictIt data, the chances of the potential Republican candidate,
who was shot during a rally in Pennsylvania on Saturday, winning a second term has increased following the attack.

 

Republican National Convention

The Republican National Convention in Milwaukee, held from Monday to Thursday,
marked the culmination of Trump’s control over the party. According to a post on the social media site X,
the former U.S. president told Fox News that he would announce his vice-presidential pick today.

 

U.S. Stocks Reach Record Levels Ignoring Trump’s Assassination Attempt

Rise of the Japanese Yen

Rise of the Japanese Yen: The Japanese Currency, the yen, surged against most major and minor currencies last week.
This was due to the decline in U.S. bond yields, which supported the yen gains.

The yen moved away from its 38-year low thanks to the intervention
of the Japanese central bank in the foreign exchange market to halt the excessive weakening of the local currency.

 

Contents

Decline in Gold Prices

Rise of the Japanese Yen

Expectations of No Significant Increase in British Inflation

 

 

 

 

Decline in Gold Prices

Global gold prices fell during Monday’s trading as investors awaited comments from Federal Reserve officials and upcoming economic data.
Federal Reserve Chairman Jerome Powell and other officials are scheduled to speak this week.
The forthcoming data includes U.S. retail sales, June industrial production, and weekly jobless claims.
If retail sales are weak, it could reinforce the need to cut interest rates, which could help gold prices.
If gold surpasses $2,450, it may reach new record levels.
The U.S. Department of Labor’s Bureau of Statistics reported a 0.2% increase in the Producer Price Index
in June after remaining unchanged in May, exceeding the expected growth of 0.1% amid rising service costs.


Rise of the Japanese Yen

The Japanese yen surged against most major and minor currencies last week.
This was due to the decline in U.S. bond yields, which supported the yen gains.
The yen moved away from its 38-year low thanks to the intervention of the Japanese central bank
in the foreign exchange market to halt the excessive weakening of the local currency.
The yen topped the list of winning currencies last week, achieving its best weekly performance since late April.
New buying positions accelerated, along with the covering of short positions.
Instead of the Japanese central bank’s low liquidity and momentum strategy,
it has adopted a new approach based on solid liquidity and accelerating momentum.
The sharp drop in long-term U.S. Treasury yields supported the gains of the Japanese currency,
as more extraordinary U.S. inflation data increased the likelihood of at least two Federal Reserve rate cuts this year.

 

Expectations of No Significant Increase in British Inflation

According to Reuters, Swati Dhingra, a member of the Bank of England’s Monetary Policy Committee,
said on Monday that it is unlikely that inflation in the UK will rise significantly again due to weak demand.
She emphasized the need for the Bank of England to reduce borrowing costs.
Dhingra stated, “Now is the time to start normalizing interest rates so
that we can finally stop pressuring living standards in the way we have been trying to reduce inflation.”
She added that she does not see any kind of consumption boom,
and if we are to start moderating from the extremely high interest rates we are currently at,
it will take some time for this to happen
so that we can ease it and feed it into the real economy.
Finally, Swati Dhingra from the Bank of England emphasized that demand is too weak to allow inflation to rise sharply.

 

Rise of the Japanese Yen

Important Economic News for the Upcoming Week

Important Economic News for the Upcoming Week: The upcoming week is expected to be filled with significant events  and Economic News for the financial markets,
with a series of prominent economic announcements and critical data releases anticipated.
Investors and traders prepare to analyze and react to these developments,
providing them with a better understanding of economic trends and potential market movements.
Below is a schedule of the most anticipated news and reports expected to influence market dynamics in the coming days

 

Content

Economic Calendar

Gold

Oil

Dow Jones

GBPUSD

EURUSD

USDJPY

 

 

 

Economic Calendar

Monday, July 15

19:00 USD: Federal Reserve Chair Powell’s Speech

Tuesday, July 16

15:30 CAD: Consumer Price Index (YoY) (June)

Wednesday, July 17

12:00 EUR: Consumer Price Index (YoY) (June)

Thursday, July 18

15:15 EUR: Borrowing Interest Rate (July)

15:15 EUR: ECB Interest Rate Decision (July)
Friday, July 19

15:30 CAD: Retail Sales (MoM) (May)

 

Gold

Gold rose approximately 0.75% during last week’s trading after mixed U.S. inflation data,
with the negative Consumer Price Index and positive Producer Price Index.
Markets are awaiting data on this week’s retail sales and unemployment claims.
Technically, prices remain above the support levels of 2387-2393, targeting the following resistance levels at 2433.

 

Oil

West Texas Intermediate (WTI) crude futures prices stabilized around $82.14 per barrel.
From a technical perspective, prices managed to hold above a critical support level of around $81.30,
facing resistance at $83.70, where it encounters selling pressure as the oscillation index reaches the overbought zone.
This suggests a possible retest before continuing the rise to resistance levels at $84.40 and then $87.65.
However, if prices drop and break the support level,
the likelihood of a decline to the pivotal support level at $78.25 and then the main support at $72.50 increases.

 

U.S. Dow Jones Index

The index rose strongly by approximately 1.75% during last week’s trading.
This week is relatively quiet regarding U.S. data, with markets awaiting retail sales and unemployment claims data.
Technically, the index formed a harmonic pattern; if it falls below 39815, it will decline to 39225.


GBPUSD

The pound rose strongly to near levels of 1.30 against the dollar after bouncing from the support level at 1.2715
and breaking through a significant resistance level at 1.2766, approaching a critical resistance level at 1.2860.
Increasing buying momentum supports a continued rise toward the primary resistance at 1.3140.
However, if it falls below the support level at 1.2860,
it will likely drop to the next support level at 1.2735 – 1.2615.

 

EURUSD

The pair rose strongly during last week’s trading by approximately 1.00% after mixed U.S. inflation data,
with the negative Consumer Price Index and positive Producer Price Index.
Markets await the European Central Bank’s interest rate decision and data on U.S. retail sales and unemployment claims.
Technically, the price reached resistance levels of 1.0895-1.0915, forming a harmonic pattern.
If it closes below 1.0895, it will decline to 1.0800.

 

USDJPY

The dollar dropped sharply to below 158 against the yen after bouncing from the resistance level 162.
It faced strong selling pressure supported by Japanese authorities but found support at 157.15.
If it breaks through the resistance level at 158.75, it will enhance its chances of rising again.
However, if it breaks the support level downward, it will signal a decline towards the support at 154.60 and 151.85.

 

Important Economic News for the Upcoming Week

U.S. Bank Stocks Stumble After Earnings Fall Short of Expectations

U.S. Bank Stocks Stumble After Earnings Fall Short of Expectations: The sector’s stocks struggle with overly high expectations for significant bank valuations.
The stocks of the largest U.S. banks have outperformed the broader market this year,
but this rise has halted due to results that disappointed investors.

 

Contents

Loss of Momentum

Results Insufficient to Maintain Momentum

Performance of Wells Fargo and Citigroup
Overly High Expectations

 

 

 

Loss of Momentum

Wells Fargo & Co. is headed for its worst decline on an earnings announcement day over three years after failing to achieve the expected net interest income.
Citigroup shares also fell, with a focus on expenses, even though its market revenues exceeded expectations.
Meanwhile, JPMorgan Chase & Co., whose shares saw the most significant drop a month after its results and stable guidance disappointed investors,
is set to recover some of those losses early in the session.

 

Results Insufficient to Maintain Momentum

In short, the results were insufficient to maintain momentum after a series of gains
led all stocks to rise more than 20% this year up until the day before yesterday’s close,
compared to the S&P 500‘s 17% gain. The moves were strong, especially considering yesterday’s broader market’s rise,
with about 425 stocks in the S&P 500 index posting gains.

Art Hogan, Chief Market Strategist at B. Riley Wealth, explained,
“The stocks of all three companies that announced results have risen significantly yearly.
This significant increase puts you where you have reached the maximum price range.”
The three stocks fell after the first quarter results announcement,

highlighting how profits increasingly pose a hurdle for the sector amid rising valuations.

 

 

 

Performance of Wells Fargo and Citigroup

Wells Fargo’s stock is the worst performer among index stocks during the trading session,
with shares falling as much as 7.6%, marking the most significant one-day decline since March 2023.
The giant lending institution warned in its earnings report that it will not be able to reduce costs
this year as quickly as expected after recording higher-than-expected expenses in the second quarter.
Citigroup’s stock also declined, ranking among the 10 worst performers in the S&P 500 index, dropping by 3.6%.

 

Overly High Expectations

The shares of the largest U.S. banks have seen significant gains in 2024 amid optimism about the Federal Reserve cutting interest rates,
the continued strength of the U.S. economy, and the potential easing of restrictive regulatory proposals.
While they remain significantly elevated despite yesterday’s session declines,
second-quarter results highlight the possible risks facing the banking group after heightened expectations.
Bank of America, Goldman Sachs Group, and Morgan Stanley will be in the spotlight early next week as they release their results.

 

U.S. Bank Stocks Stumble After Earnings Fall Short of Expectations

Asian Stocks Up Before U.S. Inflation Data

Asian Stocks Up Before U.S. Inflation Data: Asian stocks have significantly risen with the climb of the world’s largest technology companies,
leading to new global stock market highs ahead of the anticipated U.S. inflation data.

 

Content

Rise in Japan and Australia

Performance of Technology Companies

Calm Markets Amid Data Flow

U.S. Inflation Trend

Interest Rate Cut Expectations

Implications of China’s Decision

Jerome Powell’s Statements

Krishna Guha’s Perspective

Economic Reports in Asia

 

 

 

Rise in Japan and Australia

Stocks in Japan and Australia rose, reflecting the bullish wave experienced on Wall Street on Wednesday.
The S&P 500 and Nasdaq 100 indices increased by more than 1%, with global stock indices reaching new record levels.
The S&P 500 index has risen in the last seven sessions, marking its longest winning streak since November.

 

Performance of Technology Companies

The surge in U.S. stocks accelerated in the final minutes of trading, focused on companies like Nvidia and Apple.
The iPhone manufacturer announced plans to ship 10% more new devices this year after a challenging 2023.
Taiwan Semiconductor Manufacturing, the sole supplier of the most advanced chips for Nvidia and Apple,
reported that its second-quarter sales grew at the fastest pace since 2022.

 

Calm Markets Amid Data Flow

Mark Hackett from Nationwide stated that markets “remain remarkably calm despite the data flow this week,
including Fed Chairman Powell’s testimony before Congress over the past two days,
the upcoming consumer and producer price index reports, and the beginning of the earnings season.”

 

U.S. Inflation Trend

The U.S. core consumer price index, which excludes food and energy costs and is seen as a preferred inflation measure,
is expected to rise by 0.2% in June for the second consecutive month.
This would represent the smallest back-to-back increase since August,
a more acceptable pace for Federal Reserve officials.

Anna Wong from Bloomberg Economics said,
“The June CPI report appears to be another report that can be described as very good,”
adding that “it should bolster the FOMC’s confidence regarding the inflation path,
paving the way for the Fed to start cutting rates in September.”

 

 

 

Interest Rate Cut Expectations

Swap contracts are pricing in two rate cuts by the Federal Reserve in 2024,
with the first cut likely in September.
The U.S. dollar strength index remained largely unchanged today
despite gains in the yen, Australian dollar, and New Zealand dollar against it.

 

Implications of China’s Decision

In Asia, investors will examine the impact of the Chinese Securities Regulatory Commission’s decision
to tighten short-selling rules and high-frequency trading using
advanced algorithms in an attempt to eliminate improper arbitrage and maintain market stability.

 

Jerome Powell’s Statements

As Wall Street prepares for the consumer price index release, Jerome Powell
told Congress that the Federal Reserve does not need a sub-2% inflation rate
to begin cutting rates and that officials still have more work.
Powell noted that the labor market has “slowed significantly.”
Powell discussed “good ways to go” in reducing the balance sheet,
affirming that the commercial real estate market does not threaten financial stability.

 

Krishna Guha’s Perspective

Krishna Guha from Evercore believes that “the main takeaway from Powell’s testimony is that the
Fed’s risk assessment is changing in a way that, if supported and sustained by data,
will lead to a rate cut in September.”

 

Economic Reports in Asia

Today, it will be packed with economic reports from Asia, including Thailand’s consumer confidence index,
Japan’s machinery orders, monetary policy decisions in Malaysia and South Korea,
and new figures on the money supply and lending in China.

Australian and New Zealand bonds showed little change in early trading while oil prices rose.
Gold prices remained largely stable after climbing for the second consecutive session yesterday.

 

Asian Stocks Up Before U.S. Inflation Data

 

Gold Continues to Climb Ahead of U.S. Inflation Data Release

Gold Continues to Climb Ahead of U.S. Inflation Data Release: Gold prices are rising during today’s Thursday trading amid anticipation
of the release of June U.S. inflation data. The data will help investors determine the Federal Reserve’s future path
.

 

Content

International Energy Agency
UK GDP 

Gold continues to rise

 

 

 

 

The International Energy Agency announces a slowdown in oil demand in the second quarter.

The International Energy Agency announced a slowdown in global oil demand growth to 710,000 barrels per day
on a year-on-year basis in the second quarter of 2024, marking the slowest increase since the fourth quarter of 2022 amid a contraction in Chinese consumption.

 

UK GDP rises to 0.4% in May

The UK’s GDP increased by 0.4% in May after stabilizing in April.
The UK’s GDP grew by 0.9% in the three months ending in May.

 

Gold continues to rise amid anticipation of the U.S. inflation data announcement

Gold prices are rising during today’s Thursday trading amid anticipation of the release of June U.S. inflation data.
The data will help investors determine the Federal Reserve’s future path.

 

Gold Continues to Climb Ahead of U.S. Inflation Data Release

Bitcoin Price Drops Due to News of the Collapsed Mt. Gox Exchange

Bitcoin Price Drops Due to News of the Collapsed Mt. Gox Exchange: The largest cryptocurrency, Bitcoin,
has faced significant pressure due to concerns about potential sales by creditors of the collapsed Mt. Gox exchange.
In this article, we will review the impact of this news on Bitcoin and other cryptocurrencies and additional factors that have influenced market sentiment
.


Content

Bitcoin Price Drops

Impact of the News on Markets

History of the Mt. Gox Exchange

Concerns in the Digital Assets Market

Bitcoin’s Previous Performance

 

 

 

Bitcoin Price Drops Due to News of the Collapsed Mt. Gox Exchange

The price of Bitcoin fell by about 5% to trade at $54,400 at 9:25 AM on Monday in Singapore,
roughly $19,000 below the record level it reached last March.
Smaller cryptocurrencies like Ethereum, XRP, and the meme-favorite Dogecoin also declined.

 

Impact of the News on Markets

Sentiment was also affected by signs that the German government is disposing of confiscated Bitcoin holdings,
and global markets are acting cautiously as investors assess the results of Sunday’s legislative elections in France.

 

History of the Mt. Gox Exchange

Mt. Gox, based in Tokyo, was once the world’s largest Bitcoin exchange.
It was hacked in 2011 and declared bankruptcy in 2014.
The long-awaited return of cryptocurrencies to creditors may lead to a significant supply of the currency in the market.

 

 

Concerns in the Digital Assets Market

Chris Weston, Head of Research at Pepperstone Group,
wrote in a research note that the main concern in the digital assets market right now is determining the timing of expected large Bitcoin sales,
particularly from Mt. Gox creditors and the German government.

 

Bitcoin’s Previous Performance

Bitcoin’s price reached an all-time high in the first quarter of this year,
driven by demand following the launch of cryptocurrency exchange-traded funds (ETFs) in the U.S.
However, inflows to these funds have since declined,
and Bitcoin’s outperformance of other assets like stocks, evident at the start of 2024, is also rapidly decreasing.

 

Bitcoin Price Drops Due to News of the Collapsed Mt. Gox Exchange