Morning Brew July 31 2024

Good Morning all,

The rotation into value continued yesterday, the Dow and the Russel gained , the S&P 500 and the Nasdaq fell.

Nvidia lost 7% in value yesterday, it is now valued at almost a trillion USD less than a just a short while ago. Merck and Procter and Gamble both disappointed in earnings and lost 9 and 5% respectively. After hours we saw Microsoft falling 3% on loser than expected earnings in the Cloud business while AMD could beat expectations and rose 7.6%. The Magnificent 7 have broken their 50 day moving average at yesterdays close and tech stocks declined further in the aftermarket..

This morning the mood is brightening on AMD, a bullish outlook by Samsung and hopes of stimulus in China after a disappointing PMI. The US500 is up 1.05%, Nasdaq, Nikkei and Hang Seng nearly 2%, GER40 and EA 50 0.3% and 0.9% respectively – let us hope the Fed delivers what traders are hoping for.

US Yields are at 4.14 and the USD Index is trading at 104.46. EURUSD is 1.0820, GBPUSD 1.2836 and USDJPY 153. The Bank of Japan raised interest rates to 0.25% on Wednesday and unveiled a detailed quantitative tightening plan, The yields on 10 year JGB rose to the highest in 15 years but the yen moves less than one oud have expected.

Gold and Silver were strong yesterday, Gold broke above 2400 again to now trade at 2419, Silver is 28.57, more than a full USD off the low and Copper held above the 400 to rise to 412.80 again. Rio Tinto stated it is looking to make an acquisition into copper. Ole wrote on gold : Record demand explains gold’s current resilience

We are looking at very busy days coming up that should help in clarifying the larger picture,

1. German Inflation came higher than expected yesterday, todays EU HICP will be very important for the ECB path. We are at -17 BPS for September and -50 bps by December.
2. FOMC – traders are currently full on a rate cut in September (-28 bps) and almost three cuts by December (-68 bps) Today’s meeting will confirm or dampen those expectations with significant impact.
3. Earnings: Meta is out today, Apple, Amazon and Intel will follow tomorrow.
4. Nonfarm Payroll out Friday to give the first large Post FOMC input.
5. Middle East tensions are high as Israel may have killed Hamas leader Ismail Haniyeh in Tehran and yesterday killed a senior Hezbollah leader in Lebanon in retaliation to the attack on Saturday.

Trade safely!

Wednesday Bank Of Japan EU Inflation, FOMC and Press Conference,

UBS, Boeing, Mastercard, TEVA, Meta, ARM, Qualcomm

Thursday Swiss Holiday, Global PMI,

Moderna, Amazon, Apple, Intel, Coinbase, Roku,

Friday US Nonfarm Payroll, Unemployment rate,

Exon Mobile, Chevron,