The European Union has decided to hold off on the introduction of a digital tax levy scheduled for the end of this month, and will reassess the plan this fall. Just this past weekend, G20 finance ministers and central bank governors decided to move forward with global tax reform in order to set a global minimum tax rate for multinational corporations. But after the historic agreement reached over the weekend, the global tax deal pushed by the Biden administration will face a legislative test from the U.S. Congress, analysts say.
Markets are highly focused on the U.S. CPI and PPI inflation data for June released on Tuesday and Wednesday, as well as Fed Chairman Jerome Powell’s appearance before Congress for hearings on Wednesday and Thursday local time. Tuesday Morgan Stanley and Goldman Sachs and other large banks will be the first to open the U.S. second quarterly report, Wall Street’s expectations for this earnings season is high, if earnings soared more than 64% year-on-year, will be the largest increase since the end of 2009.
According to the New York Fed, consumer one-year inflation expectations rose to a record high of 4.8% in June, with three-year inflation expectations holding steady at 3.6%. New York Fed President Williams said the average inflation targeting mechanism does not mean rapid rate hikes, the Fed takes the goal of achieving full employment very seriously, it is important to anchor inflation expectations to the target, and U.S. bond yields fell due to panic over variant viruses.
U.S. stocks collectively closed at a new high for the second day in a row, European stocks also new highs, Tesla, Disney rose more than 4%, Doji fell nearly 9% to the lowest since the listing
Monday, July 12, the S&P 500 and the Dow opened lower and higher, the S&P broad market rose as high as 0.4% to a new intraday record high of 4386.68 points, the Dow rose as high as nearly 145 points, the first time in May to break through the 35,000-point round figure. The Nasdaq turned down after opening higher, then turned up and new highs.
As of the close, the three major indices collectively rose for two consecutive days and two consecutive days of new closing highs. The S&P 500 index closed up 0.35% at 4384.63 points, the Dow closed up 0.36% at 34996.18 points, the Nasdaq closed up 0.21% at 14733.24 points, the Russell 2000 small-cap index closed up 0.08%. By Monday, the S&P has four record highs this month, up more than 16% so far this year.
U.S. sector ETFs, financial sector ETFs closed up nearly 1.0% to lead, optional consumer ETFs rose about 0.7%, banking sector ETFs rose more than 0.5%, the network stock index, global airline industry, the three major ETFs of daily consumer goods are down more than 0.3%.
FAAMNG five star technology stocks were mixed after the EU suspended the digital tax. facebook rose 0.8%, amazon rose 1% after turning down, apple fell 0.4%, Microsoft fell 0.2%, but are close to the all-time high, Microsoft will acquire network security company RiskIQ. nifty opened 0.9% higher after once turned down, closed up 0.3% close to the high of the month, Google parent company Alphabet rose more than 1% to hit another closing high.
Among top tech stocks, Tesla closed up 4.4%, rising for three days to a two-week high since June 29, with shares at $680. Virgin Galactic, whose founder became the “first person in space tourism,” fell more than 17%, reversing a pre-market gain of more than 15%, the company applied for an additional common stock issue of up to $ 500 million, and some analysts believe that 2022 will officially open the era of commercial space travel.
Most chip stocks rose. Philadelphia Semiconductor Index rose more than 1%, up two days in a row and hit a new monthly high. Nvidia rose more than 2%, approaching an all-time high, and Internet cafe chain giant Netflix plans to join hands with Nvidia to open 30 e-sports hotels within the year. Intel rose more than 1%, AMD closed slightly lower after falling more than 1%. Listed in the United States TSMC rose 1.7%, the company reportedly will expand production capacity of large 28nm, is expected to expand 100,000 to 150,000 pieces per month. Broadcom rose as high as nearly 3%, reapproaching its all-time high and is in talks to acquire software company SAS Institute.
Stocks related to the economic recovery were lower, with commercial cruise stocks falling nearly 1% collectively and airline stocks turning higher before falling again, with Delta Air Lines, which reports earnings on Wednesday, down 2% at its deepest. Banking/financial stocks opened higher, JPMorgan Chase, Bank of America, Citigroup and BlackRock rose more than 1%, Goldman Sachs and Morgan Stanley rose more than 2%, Wells Fargo rose 0.6%, the above stocks reported earnings this week.
Disney rose more than 4% to lead the Dow and hit a two-month high, the movie “Black Widow” U.S. opening weekend three-day box office of $ 80 million, the most in North America after the epidemic, the company also harvested an additional $ 60 million in sales revenue through streaming Disney +.
Among new crown vaccine stocks, Pfizer rose as high as 1.6%, back above $40 for the first time in a month, closing up 0.4% as the company met with U.S. federal government health officials to discuss the need for vaccine booster shots as it prepares to seek U.S. authorization. Moderna closed up nearly 3% and hit an all-time high as the company began a study of the new crown pneumonia vaccine, mRNA-1273, targeting the pregnant women population. Johnson & Johnson shed nearly $2 briefly during the day and turned lower during the day as media said the FDA will warn the company of the risk of infectious polyangiitis with the New Crown vaccine.
Most popular Chinese stocks fell, with KWEB, the Chinese Internet index ETF, down more than 1%.
Alibaba closed down 0.2%, Jingdong, Baidu and Poundland all closed down 0.5% after falling more than 1%, Beili Beili closed up after falling nearly 2%, Tencent ADR fell more than 3%, Tencent Music fell more than 4% and Drip fell more than 7%. Tucson Future also turned down and closed down 1.5% in midday trading, while Highway Education and Dingdong Buyer both fell about 8% and Pupu Culture dropped over 17%. But Azure Auto stopped falling and turned up nearly 2%, and Ideal Auto rose more than 3%.
Douyu fell nearly 9%, dropping below $5 and hitting its lowest since its IPO, while Tiger closed down 1.6% to a five-week low after Douyu announced that it terminated its merger agreement with Tiger, respecting the decision of the State Administration of Market Supervision.
Multiple analysis pointed out that on the eve of this week’s heavy inflation data and the Fed chairman’s hearing, investors were mostly in wait-and-see mode on Monday, and the earnings season kicked off with less impact on this week’s market sentiment than the latter two weeks of the intensive earnings period, especially to focus on whether Powell hinted that tapering of bond purchases (taper) should be done sooner rather than later. Bank of America believes that in the economic recovery hit the top of the worry, if this earnings season is positive will increase investor confidence and promote funds to value stocks rotation again.
The pan-European Stoxx 600 index rose for two days and closed at an all-time high, closing up 0.69% and closing above 460 points for the first time, while the FTSE Pan-European Outperform 300 index also rose 0.7% to a new high. Real estate, financial services and utilities stocks rose more than 1%, travel was the only weak sector today, down 1.3%. All country-specific stock indexes closed higher, with Italy’s FTSE MIB index leading the way with nearly 1% gains.
Long-term U.S. bond yields rose 2 basis points, 30-year yields rose above 2%, European bond yields narrowed losses
10-year U.S. bond yields stopped falling and turned up on Monday, U.S. stocks had the deepest pre-market decline of 3 basis points to 1.326%, U.S. stocks turned up at lunchtime and up by up to 2 basis points, since July 6 for the first time since the breakthrough of 1.37%, last Thursday had fallen below 1.25% to hit the lowest in mid-February.
30-year U.S. bond yields also in the U.S. stocks before the market down 3 basis points, forcing 1.95%, U.S. stocks also turned up at noon and the highest up 2 basis points, the daily high once exceeded the 2% mark, recovering all the losses since last Wednesday, July 7.
Today, the U.S. Treasury auctioned $38 billion 10-year Treasury bonds, the bid rate of 1.3710%, the bid multiple of 2.39, the latter the lowest since April, analysis said the auction shows “mediocre demand.
Wall Street News mentioned that despite the good stock market, with concerns about slowing economic growth, since April this year, the global asset pricing anchor – 10-year U.S. bond yields continue to move down, and last Thursday once fell below the key technical level of 1.3%, representing inflation trading to the inflection point. Societe Generale believes that a rapid collapse of the stock market and commodity markets in the future cannot be ruled out.
The 10-year German bond yield was down 0.2 basis points at -0.295%, after weakening to -0.314% in early European trading. Yields on marginal countries such as Italy, Spain and Greece all fell by more than 1 basis point.
Economic concerns overwhelmed OPEC+’s positive temporary production increase, oil prices stopped two consecutive positive, U.S. oil fell nearly 2% in the session
WTI August crude oil futures closed down $0.46, or 0.61%, at $74.10 per barrel. Brent September crude futures closed down $0.39, or 0.51%, at $75.16/barrel.
U.S. oil WTI fell as much as $1.39 or 1.9% during the day to a daily low of $73.17. U.S. stocks were back above the $74 round figure by midday, narrowing the intra-day loss to 0.6%. International Brent oil prices fell as much as $1.32 or 1.7% during the day, with a daily low of $74.23. U.S. stocks were back above the $75 level at midday, narrowing intra-day losses to 0.5%.
Last week both oil prices fell about 1% cumulatively, but still hovered at their highest since October 2018, and even more collectively rose for six weeks in a row, mainly due to the fact that production will not be increased for now until the OPEC+ talks impasse is resolved, and U.S. gasoline demand is back at its highest level since 2018.
But analysts point out that oil prices have been in plummeting mode since last Tuesday after OPEC+ failed to reach an agreement to increase production from August to December, as well as failing to extend the overall production cut agreement for another eight months, with the market fearing that the negotiation impasse is a precursor to the dissolution of the production cut alliance and countries increasing production at will, while also expecting a slowdown in global economic growth.
U.S. Treasury Secretary Yellen issued a statement after the G20 finance ministers’ meeting over the weekend warning that the spread of the new crown Delta and other variants of the virus could threaten the economic recovery, and that the different pace of vaccination also poses risks, and that the U.S. is “very” concerned that the new crown variant strain could jeopardize the recovery.
Safe-haven demand pushes dollar higher, Thai baht near more than one-year low on epidemic fears, bitcoin falls below $33,000
The ICE Dollar Index (DXY), which tracks the exchange rate of a basket of six major U.S. dollar currencies, rose as much as 0.3% intraday to a daily high of 92.42, recovering most of its losses since last Friday, July 9, showing some market demand for safe-haven.
Analysis says that the market is extremely sensitive to any discussion of tapering bond purchases, especially CPI data and Powell testimony is extremely critical. If the high inflation lasts longer than expected, it may make the market believe that the Fed will tighten policy earlier and the dollar will strengthen further.
The euro fell more than 0.1% against the dollar, standing firm above 1.18. Sterling against the dollar was higher and briefly surpassed 1.39, British Prime Minister Johnson is expected to remove almost all remaining anti-epidemic restrictions in England from next week, so the market expects the Bank of England next year or interest rate hikes. The dollar rose 0.2% against the yen, standing above 110 and off one-month lows. The offshore yuan held up against the dollar above 6.48 yuan.
On the news front, ECB President Lagarde unexpectedly let slip over the weekend that the wording of the forward guidance on future policy will be adjusted at the July 22 meeting to reflect its latest strategy, and new stimulus may be introduced next year. The ECB’s current bond-buying program of 1.85 trillion euros will be in place “at least” until March next year.
The Thai baht fell another 0.5% against the dollar, close to a more than one-year low since mid-April last year, and has fallen about 5% against the dollar over the past month, showing that the market is concerned about the country’s tourism industry being dragged back down by the epidemic. The Bank of Thailand warned Monday that GDP may not meet official expectations as anti-epidemic measures hit economic growth. South Africa’s rand fell more than 2 percent against the dollar at one point, approaching a two-month low.
Bitcoin, the largest cryptocurrency by market capitalization, extended its losses to nearly 3 percent in late U.S. trading and fell below the $33,000 mark. Ether, the second-largest cryptocurrency by market capitalization, extended its decline to 4.7 percent and broke below $2,030 to its lowest in the month. Mainstream cryptocurrencies have fallen across the board in the past 24 hours.
Gold futures fall but stand steady at $1,800 for four days, while copper falls to new three-year highs and tin regains 10-year highs
COMEX August gold futures closed down 0.3 percent at $1,805.90 an ounce, retreating from a nearly one-month high but closing above $1,800 for the fourth straight session.
Spot gold fell as deep as nearly $17 or 0.9% during the day to a daily low of $1,791.70. The U.S. stock market regained above the key psychological round number of $1,800 at midday, narrowing losses to nearly 0.2%. Spot silver, on the other hand, rose as high as 0.8% to stand steady above $26/oz.
The Fed’s June FOMC unexpectedly showed hawkish signals, ahead of the interest rate hike point to 2023 and open discussions on tapering bond purchases, after which gold fell nearly 7% in the month, because the Fed rate hike will increase the opportunity cost of holding gold, Monday’s higher dollar also put gold prices under pressure.
Goldman Sachs latest research report is expected in the “world economy continues to recover, not interrupted + inflation continues to be controlled” the basic assumptions, gold prices will rise moderately to $ 2000, if the global recovery is not as expected or inflation is much higher than expected, gold prices are expected to rise significantly to $ 2200.
Most London base metals closed lower on Friday. LME copper futures closed down $110 at $9,409/mt, retreating from a three-week high; aluminum reapproached a two-week low, and nickel halted a three-month rally, retreating from a four-month high. However, lead rose slightly by $2, up three days in a row and hit a three-year high; Lun tin stopped two consecutive losses and closed sharply up $414, back to a ten-year high.