Markets are risk-on, cryptocurrencies are on a historic run, stock market news from companies and geopolitics
Latest stock market news
• The US stock market has been rotating from Growth to Value for the second day. And demand for long-term US government bonds has grown.
It is still unclear whether this is a tactical or strategic move. There were no objective reasons for panic. Therefore, for now it looks more like a capital flow from highly valued securities to lagging and cheap-looking ones.
Improving the breadth of the bull market is a good sign for a trend.
Bitcoin tested $124,000 this morning.
In a week, on August 22, Powell will speak in Jackson Hole, where he may dispel expectations of a Fed rate cut in September. People will be nervous.
• Markets are all in for risk, cryptocurrencies are on the rise, with Bitcoin joining global stocks in breaking a record high as a near-certain US interest rate cut boosts risk appetite and puts pressure on the dollar. The world's best-known cryptocurrency, Bitcoin, has a lot going for it: the prospect of lower interest rates, a more favorable regulatory environment and optimistic inflows from institutional investors.
Ether is not far behind, trading near its highest since November 2021, becoming the token of choice for those looking for more active income. Ether has gained 42% this year, outpacing Bitcoin's 32% gain.
• Asian shares took a brief breather after a meteoric rise this week. Japanese shares fell after hitting a record high, while tech stocks in Taiwan and South Korea retreated from recent highs.
• Investors are betting the Federal Reserve will resume cutting interest rates starting next month, with traders starting to even out the odds for a 50-basis-point cut after comments from Treasury Secretary Scott Bessent. “If we were to see those numbers in May or June, I suspect we could cut rates in June and July. So I think there’s a very high probability of a 50-basis-point rate cut,” Bessent said in a Bloomberg Television interview in September.
• Yen rises: US Federal Reserve Chairman Jerome Powell, who has been regularly criticised by US President Donald Trump, is expected to speak at a central bank research conference in Wyoming next week, with attention focused on his tone on the policy stance.
Bessent also said the Bank of Japan was likely to raise interest rates as it lagged in tackling inflation risks, leading to a sharp rise in the yen, which remains near its highest in three weeks.
• During the European session, investors will be focused on a range of economic data that will provide insight into tariff uncertainty and the impact of duties on the economy. While U.S. small business sentiment improved in July, more companies are citing “weak sales” as their top concern.
The measure rose to 11 in July, the highest since February 2021. Typically, when businesses worry about weak sales, unemployment rises.
• BofA reports near-record week of institutional buying.
Net institutional buying was the largest since September last year and the 10th largest on record, dating back to 2008.
• JPMorgan believes that US Treasury yields will continue to decline.
Historically, when the Fed resumes its easing cycle after a pause, yields tend to decline in the following months, JPM.
• Indian stocks have gone from being the most attractive Asian stock market to the least attractive for global asset managers in three months
Amid the escalation of the trade war with the US - BofA's August survey.
• Trump suggested that Goldman Sachs CEO David Solomon replace his economist, who has expressed doubts about the success of Trump's economic policies, or completely switch to the wave of DJ success (Solomon has such a hobby).
• Corporate America isn't worried about a recession, Bloomberg says.
S&P 500 CEOs mentioned an economic downturn fewer than 300 times during the latest earnings season, nearly the lowest level since 2001.
• Exxon Mobil (XOM, +1%) has entered into an exploration deal in Trinidad and Tobago, with potential investment of up to $21.7 billion if reserves are confirmed, in a strategy aimed at repeating the success of the Guyana project.
• Elbit Systems (ESLT, +6%) has received a $1.635 billion defense contract with a European country,
bringing the company's order book to $23.8 billion. The contract covers advanced artillery and reconnaissance systems.
• Hudbay Minerals (HBM, +15%) raised $600 million from Mitsubishi in exchange for a 30% stake in the Copper World project.
The deal gives financial flexibility and defers capital expenditures to Hudbay, enhancing its copper production prospects.
• Hilton Grand Vacations (HGV, +2%) placed 7 million shares in a secondary offering, simultaneously announcing a buyback of up to $40 million.
• Taiwan Semiconductor Manufacturing (TSM, -1%) will phase out 6-inch wafer production over two years, focusing on 8-inch wafers to improve efficiency. The move will not affect the company's financial targets.
• United States Antimony (UAMY, +5%) forecasts 2025 revenue of $40-50 million, based on strong demand and rising prices.
Discussions are underway with the U.S. Department of Defense.
• Rekor Systems (REKR, +4.5%) announced a large-scale deployment of its solutions at the Texas Department of Transportation, expanding its SaaS and data subscription model.
• CAVA Group (CAVA, -17%) plans to reach 1,000 restaurants by 2032, showing revenue growth of +20.3%.
New menu items are planned, in particular chicken shawarma.
• US copper stocks rise sharply (longest run since 1992) as traders rush to ship metal to US amid Trump tariffs - BBG
• Peter Thiel-backed cryptocurrency exchange Bullish (BLSH) raised $1.1 billion in its IPO, well above its target.
It listed at $37, well above the $32-$33 range,
giving the company a $5.4 billion valuation.
The stock opened at $90 but immediately fell to close at $68. It recovered slightly to $76 in the after-market.
This is the first blow to speculators who have become accustomed to easy profits on IPO stocks in recent years.
• Standard Chartered has raised its Ethereum (ETH) forecast
to $7,500 by the end of 2025 (from $4,000), while its end-2028 target has risen to $25,000 (from $7,500).
• Starlink has started providing satellite Internet services in Kazakhstan.
• Sam Altman's OpenAI invested in Merge Labs, a competitor to Musk's Neuralink - FT.
• US to embed hidden trackers in Nvidia, AMD, Dell and Super Micro AI chips
to track illegal shipments to China - Reuters
• Glassnode: Despite BTC trading at historically high levels, there is no strong “profit taking” in sight.
• Western zoomers are abandoning subscriptions to music services and switching to MP3 players.
The reason is that it’s simply cheaper: even a simple player with up to 64 GB of memory can store up to 12,000 of your favorite songs, it’s inexpensive, and most importantly, there are no expensive subscriptions.
• CSCO shares are neutral (-0.2%) this morning after the report.
Key events that could impact markets on Thursday:
- Economic events: Eurozone Q2 preliminary GDP, UK Q2 preliminary GDP.
Current Fundamental Reviews
• The White House nominated Donald Trump for the Nobel Peace Prize and published a list of foreign leaders who supported his candidacy
- Prime Minister of Armenia Nikol Pashinyan.
- President of Azerbaijan Ilham Aliyev.
- Prime Minister of Cambodia Hun Manet.
- President of Gabon Brice Oligi Nguema.
- Prime Minister of Israel Benjamin Netanyahu.
- Government of Pakistan.
- Foreign Minister of Rwanda Olivier Nduhiriehe.
• The Golden Dome missile defense system in the United States will receive 4 layers of protection.
According to Reuters, the system, developed by Trump's decision, will be equipped with:
- a space layer for detection, targeting for warning and tracking of missiles, as well as missile defense;
- three ground layers consisting of missile interception systems, radar arrays and, possibly, lasers.
• Trump: There has been a very unfair media campaign against my meeting with Putin.
Constantly quoting fired losers and truly incompetent people like John Bolton.
Russia is at least partially involved in the recent hack of a computer system that manages federal court documents,
including highly sensitive material that could contain information about sources and individuals accused of national security crimes, the NYT reports.
• China has imposed sanctions on two EU banks in response to restrictions over the war in Ukraine.
Beijing has banned any cooperation with Lithuanian banks Urbo Bankas and Mano Bankas and called on the EU to “correct its mistakes.”
• The US national debt exceeded $37 trillion for the first time in history.
• Modi will visit the US in September to attend the UN General Assembly.
However, the main purpose of the trip will be to meet Trump for trade talks — Indian Express.
• Japan - PPI inflation (July).
m/m = +0.2% (previously -0.1%).
y/y = +2.6% (previously +2.9%).
• German inflation figures.
MoM = 0.3% (expected 0.3%/ pop. 0.0%).
YoY = 2.0% (expected 2.0%/ pop. 2.0%).
• The IEA has raised its forecast for global oil supply growth in 2025 to 2.5 million barrels per day.
Following the latest increase in OPEC+ quotas (versus the previous 2.1 million bpd), it expects global crude oil refining volumes to approach a record 85.6 million bpd in August.
At the same time, the agency has lowered its forecast for global oil demand growth in 2025 to 680,000 bpd (versus 700,000 bpd previously) and for 2026 to 700,000 bpd (versus 720,000 bpd).
• US Treasury Secretary Bessent proposes extending export taxation to more industries, – FT.
/ This is a new type of corporate tax that could set a bad example for other countries and make the global economy less efficient by supporting big players at the expense of small ones.