MHMarkets：August 8, 2023 - Fundamental Reminder

☆18：00 USD NFIB Business Optimism Index (JUL)

☆At 20:15, Philadelphia Fed President Harker will speak on the economic outlook, and investors need to pay attention to Harker's views on the Fed's next rate hike path with Fed Governor Bowman firing a hawk.

At 20:30, Richmond Fed President Paul Barkin will speak after previously saying the June inflation reading was a good sign and could indicate the economy can achieve a “soft landing”

At 24:00, The EIA will release its monthly short-term energy outlook, allowing investors to watch for any changes to the agency's outlook for the oil market in the second half of the year

The next day at 4:30, The U.S. will publish API Crude Oil Stock Change (AUG/04). Another big drawdown in API Crude Oil Stock Change, after a sharp 15.4 million barrels drop, could continue to boost the oil market.

Market Overview

Review of Global Market Trend

On Monday, possibly influenced by Fed Governor Bowman's eagle, spot gold rose to an intraday high of $1946.62 before falling back, losing the 1940 mark and barely holding the 1930 mark in U.S. trading before settling down 0.36 percent at $1936.49 an ounce. Spot silver plunged in U.S. trading and ended down 2.13 percent at $23.13 an ounce.

The dollar index rose and then fell, reaching an intraday high of 102.40 before paring some gains to end up 0.06 per cent at 102.07. In U.S. yields, the two-year Treasury yield failed to hold above 4.8% and ended at 4.777%; The yield on the 10-year Treasury note rose to an intraday high of 4.123% before closing at 4.097%.

After jumping high, crude oil turned downward. WTI crude reversed course after reaching an intraday high of $82.90, but recovered some of its losses in U.S. trading to end down 0.17 percent at $82.45 a barrel. Brent crude settled down 0.17 percent at $85.85 a barrel.

The Dow Jones Industrial Average closed up 1.16 percent, the Nasdaq gained 0.61 percent and the S&P 500 gained 0.9 percent. Vistagen, a drug company, soared 24-fold after announcing positive preliminary results for its drug for social anxiety disorder; Yellow, a century-old trucking company, lost more than 50% as it filed for bankruptcy protection. Berkshire Hathaway is at a record high, with a market cap of nearly $800 billion. Apple closed down 1.7%, snapping a five-session losing streak. The Nasdaq China Golden Dragon Index fell 0.8%, while Pinduoduo, Bilibili and Beike all fell more than 2%.

Major European stock indexes were mixed, with Germany's DAX30 closing down 0.01%, the U.K. 's FTSE 100 down 0.13% and the Euro Stoxx 50 up 0.11%.

Market Focus

1. Turkish media: Turkey will impose a quota on gold imports.

2. Adviser to the chief of the Ukrainian President's Office: Kyiv is opposed to any ceasefire in the current situation.

3. PayPal launched PayPal USD, a stablecoin denominated in U.S. dollars, for transfers and payments.

4. The US: has sent more than 3,000 troops to the Red Sea in response to Iran's “harassment and seizure of commercial vessels”.

5. Fed - Williams: Not yet determined on the need for further rate hikes, does not rule out a rate cut in early 2024, but depends on economic data, Bowman: Expects further rate hikes to be needed to reduce inflation to target, Bostic: Does not expect another rate hike in September, and does not expect a rate cut until the second half of next year.

6. The pharmaceutical company Vistagen announced positive initial results for its social anxiety drug, sending its stock up 24-fold, the century-old trucking company Yellow down more than 50% as it filed for bankruptcy protection, and Berkshire Hathaway hit a record high with a market value of nearly $800 billion.   

Geopolitical Situation

Assistance Situation

1. The German Ministry of Economic Affairs: Extension of guarantees for German investments in Ukraine.

2. U.S. Department of Defense: General Dynamics has completed the M1 tank for Ukraine, which is scheduled to be delivered in early fall.

3. The Ukrainian Foreign Minister called on the US Secretary of State to provide Kiev with long-range ATACMS missiles.

4. U.S. Media: The United States has approved the delivery of the first batch of Abrams main battle tanks to Ukraine.

5. U.S. Army procurement chief Doug Bush says the administration is preparing a new package of proposals for Congress to consider in the fall on aid to Ukraine.

Institutional Perspective

01

Goldman Sachs

Goldman Sachs: The macro backdrop has become more favorable for Asian equities, but the market is not fully pricing that in, which means stocks will continue to rally.

02

SOCIETE GENERALE

Societe Generale: Non farm payrolls are expected to increase by 190,000 in July, but any increase above 150,000-175,000 is strong growth. The unemployment rate will fall back to 3.5% and average hourly earnings growth will slow to a monthly rate of 0.3%.

03

MUFG

MUFG: Dollar is expected to see limited gains ahead of CPI data.

The dollar rebounded from Friday's losses after U.S. Non farm payrolls rose less than expected, but gains are expected to be limited as investors focus on key U.S. inflation data for July due on Thursday, MUFG currency economist Lee Hardman said in a note. “Last month's price action highlights how vulnerable the dollar will be to another sell-off if Thursday's US CPI report is weak,” he said. If the data again shows a sharp slowdown in core inflation, it will reinforce expectations that the Fed may stop raising interest rates.