📊 Market Report.
💼 As we reminded you yesterday in our daily report, the most important event today is the presentation of Nvidia’s results, a company with more than 3.1 trillion dollars of market capitalisation, which could undoubtedly cause earthquakes in the stock markets. Today we have published a video report on what to expect in this company, studying its projects, analysing its fundamental and financial information, and finally sharing a technical analysis of charts with key levels to watch. You can watch it at the bottom of this report.
🇬🇧 British consumer confidence held steady at a near 3-year high in August according to the GfK survey, bolstered by improving sentiment around personal finances and major purchases. Enthusiasm for major purchases rose to its highest since January 2022 while the outlook for personal finances also increased. This may be due to an interest rate cut in August boosting the housing market and hopes of further reductions, though the BoE has signaled a gradual approach. Investors see less than a 30% chance of another BoE cut in September, with economists forecasting one more reduction in November.
🇺🇸 US consumer confidence also came in stronger than expected, providing an optimism that could cool the euphoria of rate cuts, remembering that good macroeconomic data can make the Fed doubt the urgency of a rate cut. The Consumer Confidence ratio came in at 103.3 versus 100.9 expected and above the 101.9 of the previous period. Not only is it not weakening, it is outperforming previous periods.
🤖 The industrial transition of the 21st century. Just as in the 1980s Western countries underwent a transition from industry to services, so now AI is causing a transition from service industry to something else we have yet to see. The Philippines, one of the leading call centre countries, with BPO as a leading company, announced that it will cut 30% to 40% of its workers, replacing them with AI to handle customer calls and chats. The future no longer needs humans.
🛢️ Bloomberg has shared a very interesting article on fixed income and the oil market. Veteran commodities analyst Jeff Currie from Carlyle Group sees an increased risk of an oil price spike. High interest rates have spurred a “carry trade” where hedge funds and physical oil players slashed up to $100 billion in oil futures positions and inventories in favor of US money markets for higher returns. According to Currie, falling US interest rates could bring that diverted capital back into the oil market. When that capital returns, it could tighten oil supplies and push prices sharply higher if demand remains resilient.
📈 China’s industrial profits grew faster in July at 4.1% year-on-year, up from 3.6% in June, suggesting improving momentum for the economy. The high-tech manufacturing sector led gains with a 12.8% rise in profits for the seven-month period, buoyed by industries like batteries and semiconductors. However, weak domestic consumption and a volatile external environment continue weighing on the recovery, with imports and loans contracting.
🚗 BYD, China’s top-selling automaker, expects overseas deliveries to account for almost half of its total global auto sales in the future. BYD is setting up production hubs around the world to overcome punishing tariffs faced as a Chinese automaker exporting to key markets. The company is already producing electric vehicles in markets like Japan, Thailand, India and Europe to avoid additional costs from import tariffs. BYD’s plans suggest it aims to become a truly global automaker rather than relying mainly on its large domestic Chinese market.
📈 Market View:
📊 Dow Jones touched its all-time highs yesterday, surpassing 41300 points. SP500 remains strong, but still more than 50 points off its highs at 5700 points, while Nasdaq 100 continues to weaken away from the 19900 points reached last week, currently trading at 19590.
📉 The movements of these last two indices clearly show the nervousness ahead of the results of the giant Nvidia. If worse than expected, these results could pull the price towards the support zone in the $100 – $95 range. on the other hand, if they beat expectations, the price should be able to reach the recent highs at $140 and even surpass them.
💵 The dollar remains above 100 points on the DXY index. EURUSD in the 1.1130 area having reached 1.12 this week. The US 2 year bond continues to make positive progress, yields cool and fall to 3.85%, in line with the Fed’s stance.
🇪🇺 European markets rise strongly in today’s session, with the Dax40 approaching 18,850 points and within striking distance of its all-time highs around 19,000 points.
💰 Bitcoin retreated from 64,300 points and lost 60,000 points, now struggling to hold on to it. Gold remains strong at $2535 per ounce. Crude oil, after rebounding sharply at the start of the week, quickly falls back to $78.25 a barrel Brent. We briefly commented on the carry trade between US bonds and the oil market.
🌍 Geopolitics:
🗺️ Zelenskyy is preparing a plan to present to US President Biden and the two potential successors that includes Ukraine’s incursion into Russia’s Kursk region as well as other economic and diplomatic steps. The plan aims to force Russia to end the war in a way that is fair for Ukraine, but he did not provide further details. The offensive into Kursk has reduced calls for Ukraine to compromise, while it continues making gains in Donetsk.
🔍 The context of Pavel Durov’s arrest has now been clarified: Macron claims that the arrest of the CEO of Telegram is unrelated to free expression. Ukraine has expressed its appreciation for Durov’s arrest, with the expectation that he may provide relevant information on Russian activities on Ukrainian territory. The Wall Street Journal speaks of ‘Europe’s censorship problem’. ‘The EU’s discursive regime raises understandable doubts in the US about PavelDurov’s detention.’
