Market Report.
💼 Interventionism in the US continues to advance, a new state economy more typical of socialism is emerging. Is the United States following the Chinese economic model?
🏛️ The Trump administration is not only intervening in the private sector, technology and potentially defence. The dismissal of Fed Governor Lisa Cook, replacing her with someone more in line with Trump’s views, will mean that four of the seven members of the FOMC will be favourable to Trump’s influence, which could effectively give Trump control of the Fed.
💰 Trump knows that the Fed’s power, as the central bank of a dollarised world, is brutal. Whoever controls the Fed will control the world’s stock market cycles. But in the wrong hands, it could produce a global financial shock or bring us an excessively bullish cycle. Exciting times indeed.
📈 Nvidia’s results demonstrate the continued strength of demand for its AI-focused products and infrastructure, despite some softness in its data center segment. According to CNBC, Nvidia’s growth is primarily fueled by its data center business, which utilises graphics processors (GPUs) and related products. The division’s revenue grew 56% year-over-year to $41.1 billion, falling slightly short of the StreetAccount estimate of $41.34 billion. Uncertainty about its sales to China may also be weighing on the stock.
💵 Nevertheless, Nvidia reported better-than-expected earnings and revenue for the quarter, and said sales growth this quarter will remain above 50%, signalling strong demand for AI infrastructure. Earnings per share was $1.05, beating estimates of $1.01. Revenue was $46.74 billion, topping the $46.06 billion estimate. Nvidia expects Q3 revenue of $54 billion, plus or minus 2%, higher than the $53.1 billion analyst estimate.
📊 What do the charts say? We will have to wait for Wall Street to open today to see the real impact, but the aftermarket responded bearishly, failing to break through the £190 barrier that we highlighted in our NVIDIA report on Tuesday. Our position was to remain on hold until certain price levels became clearer, and it seems to have been a prudent decision.
📉 Nvidia’s Chinese competitors saw a significant surge in their stock prices following the release of Nvidia’s earnings report: SMIC, a major Chinese chipmaker, gained 8.3% in trading. Cambricon Technologies, another Chinese chip company, saw its shares rise 7.1% after reporting that it had swung to profitability. The strong performance of these Chinese chipmakers pushed the STAR 50 Index of Chinese growth stocks up by as much as 5%.
📱 Apple is planning to invest about $2.5 billion to boost iPhone production in India, defying a request from U.S. President Donald Trump to reduce manufacturing in the country. According to Indian government sources, Apple will increase iPhone production in India from the current 40 million units per year to 60 million units. This expansion comes despite Trump telling Apple CEO Tim Cook that he doesn’t want the company to manufacture in India, preferring it to be done in the U.S.
🇮🇳 During Apple’s earnings call in May, Cook said the majority of iPhones sold in the U.S. will have India as their country of origin. While new U.S. tariffs of 50% on imports from India take effect this week, smartphones, computers, and other electronics are exempted from these tariffs. Apple exported $17 billion worth of iPhones from India last year and has a significant market share in the country’s domestic premium smartphone sector.
📈 With over 60 million iPhones expected to be sold annually in the U.S. by 2026, Apple will need to double its production capacity in India.
🇪🇺 The European Union has proposed eliminating all tariffs on United States industrial goods in response to President Trump’s demands.
⚔️ The war against Venezuela seems increasingly likely considering the US military movements in the Caribbean and the preparations of the Venezuelan defence. Is it really a war against the cartels or, once again, a war to seize resources from other countries?
🌐 Elliot Abrams, a Venezuelan Special Representative under the first Trump Administration, stated in public that a regime change in Venezuela is necessary to seize control of the oil: “One of the reasons we have…given licenses to Chevron and a number of service companies…is to make it easier in the recovery of oil production..after the regime is replaced.”
📰 President Donald Trump has called for George Soros and his son Alex to be charged under the Racketeer Influenced and Corrupt Organizations (RICO) Act. Trump alleges that Soros and his son have been funding violent protests and other activities that the President views as undermining his administration and conservative/nationalist movements.
🔍 According to Sam Antar, former Crazy Eddie CFO and now forensic accountant, described himself as “from Wall Street criminal to a fraud investigator” published the following: “We exposed how George Soros converts tax-deductible donations into political campaigns through a $34 million pipeline where Tides and Working Families Party coordinate to support candidates like Zohran Mamdani. Our investigation uncovered a $2+ billion tax-exempt network that systematically converted charitable donations into political power. The numbers tell the story.”
📊 Market View:
📈 The results from one of the largest companies on Wall Street have come out positive, but with certain disappointments. This is why American indices are yet to be convinced that everything is well. We will have to wait until the opening of Wall Street to gain a clear insight into the market sentiment.
📉 Both the mini S&P 500 futures and the Nasdaq 100 futures experienced some volatility last night following the publication of Nvidia’s report. At present, they remain at similar levels to yesterday, with mini S&P 500 futures trading at 6,495 points and Nasdaq futures at 23,595 points.
💵 The dollar experienced some strengthening during yesterday’s session, surpassing 98.60 points on its DXY index. This caused the EUR/USD pair to dip below 1.16 for a few hours, before recovering and currently sitting at 1.1640.
💧 Tensions with Venezuela may be causing volatility in the crude market. The Brent barrel approached $68.50 at the beginning of the week but has since retreated to the current $67.
🥇 Gold continues its advance from the levels forecasted last week in our report. At this moment, the futures for the precious metal are positioned at $3,450 per ounce.
💰 Finally, Bitcoin is making a strong recovery after reaching levels of $109,000 and is currently bouncing back towards $113,000.
