Weekly News 2023/08/14-2023/08/18

 U.S. stocks closed mixed on Friday. The Dow rose 25.83 points, or 0.07%, to 34500.66; the Nasdaq fell 26.16 points, or 0.20%, to 13290.78; the S&P 500 fell 0.65 points, or 0.01%, to 4369.71 points. All three major U.S. stock indexes recorded losses this week. The Dow fell 2.2% for the week, its biggest weekly drop since March. The S&P 500 fell 2.1%, its third straight weekly loss. The Nasdaq fell 2.6 percent, marking its third straight weekly loss for the first time since December. The market continues to focus on the US stock earnings report and the Fed's policy outlook.

On Thursday, the Dow closed below its 50-day moving average for the first time since June 1, which was seen by investors as a bearish signal. “I think the market is starting to reflect on the optimism theyve had since July, when a lot of people were saying the U.S. economy was going to have a soft landing,” said Michelle Cluver, senior portfolio manager at Global X ETFs.

The U.S. 10-year Treasury yield rose to its highest level since October 2022 on Thursday. Minutes of the Federal Reserve's July monetary policy meeting released on Wednesday said that central bank policy makers are still concerned about inflation, suggesting that further interest rate hikes are possible in the future.

Adami, an analyst at Private Advisory Group, said: “I have very good reasons to believe that interest rates will not continue to rise. There are many global events now having a confluence of effects. We are already at a level where interest rates have not been reached for a long time.” He added: “If the current upward trend in government bond yields continues, global stock markets will have some impact.”

 Moderna (NASDAQ: MRNA) disclosed on Thursday that preliminary clinical trial data confirmed that the company's new crown vaccine updated this autumn and winter showed a strong immune response against the latest dominant variant strain EG.5. Moderna's vaccine was developed against the XBB.1.5 variant, which belongs to the same family of Omicron variants as EG.5. The latest version of the vaccine is expected to be available for autumn vaccinations in the next few weeks, pending approval from relevant authorities.

Wall Street investment bank KeyBanc believes that Farfetch's (NYSE: FTCH) profit path is not clear, and its rating has been downgraded from “overweight” to “holding”. On Farfetch's earnings call, executives noted that luxury consumers in the US were less active, while similar macro dynamics were emerging in mainland China. CEO Jose Neves lamented that “the reality is that the recovery is not as strong as we expected when we announced our first-quarter results.”

On the news, according to a recent tweet by senior writer Tae Kim, Nvidia (NASDAQ: NVDA) can get up to 1000% of the profit for every H100GPU accelerator sold. In U.S. dollars, the market price of each high-performance computing (HPC) accelerator (the cheapest PCIe version) of Nvidia is about 25,000 to 30,000 U.S. dollars, which is roughly the cost of each of its chips and peripherals. Which is 10 times the cost of $3320.

On Friday, the shared office platform WeWork (NYSE: WE) announced a plan to combine 40 shares into 1, aiming to meet the Nasdaq exchange's requirement that the closing price be greater than $1. The joint stock plan will take effect after the market closes on September 1 this year, but this move will not help the company's financial situation.

 Bitcoin fell 10.44% this week to $26,324, according to CoinMarketCap data. The world's largest cryptocurrency by market cap has been trading below $30,000 since last Wednesday. Ethereum fell 9.16% this week to $1,678.

Chinese real estate developer Evergrande, with more than $340 billion in debt, filed for bankruptcy protection in the United States as part of a long-term restructuring deal with international creditors, sending bitcoin down to $25,409 on Friday, its lowest price in two months. Evergrande will default on its US dollar debt in 2021. The market also believes that the decline in Bitcoin is due to the sale of Bitcoin held by Musk's SpaceX, which wrote down the value of its Bitcoin holdings by $373 million last year and 2021.

“Bitcoins first key support level was the 200-day moving average at $27,200, but it failed to hold,” said Adrian Fritz, senior researcher at 21.co. The next major thing to watch Support will be around $25,000.

Coinbase, the largest cryptocurrency exchange in the United States, announced Wednesday that it has received regulatory approval to offer cryptocurrency futures trading services to eligible customers in the country.

Binance‘s announcement comes a day after Europe’s first spot bitcoin exchange-traded fund (ETF) listed on Euronext Amsterdam, nearly two years after it was first approved. Lucas Kiely, chief investment officer at digital asset platform Yield App, said the ETF listing could inspire other European countries to follow suit and put pressure on the SEC to speed up the approval process for pending ETFs. However, Jonas Betz, a crypto market analyst and founder of consulting firm Betz Crypto, doesn‘t think a European ETF will significantly boost bitcoin prices or speed up the SEC’s decision-making process.

 Gold prices were little changed on Friday, but were set for a third straight weekly loss, as recent upbeat U.S. economic data boosted bets that interest rates will remain elevated for longer.

Tim Waterer, chief market analyst at KCM Trade, said: “The dollar needs to turn bearish at some point before gold can rediscover its magic. How long gold will trade below $1,900 will depend on the support of high bond yields for the dollar how long will it last？”

Phillip Streible, chief market strategist at Blue Line Futures, said: “The problem with gold is that it has to compete with instruments that yield 4% to 5%, such as bonds, compared to which gold does not pay interest. Doesn't seem like an ideal asset class.”

Ole Hansen, head of commodity strategy at Saxo Bank, said in a note: “Gold may continue to face difficulties in attracting investor demand until something breaks down, either a credit event, or a weaker dollar, or the perception that the Fed The Open Market Committee (FOMC) has shifted its focus to cutting rates.”

Traders now expect the central bank to keep interest rates in a range of 5.25% to 5.5% through 2024, while awaiting guidance from next week's Jackson Hole summit.

The premium for physical gold in China jumped to its highest level since December 2016 this week as economic worries spurred fresh safe-haven demand. “We still expect policy easing to come from moderating inflation and rising unemployment, which should be supportive for gold,” Macquarie strategists said.

Spot silver rose 0.1% to $22.70 an ounce. Platinum rose 2.1% to $908.38 an ounce, while palladium rose 2.8% to $1,251.61, both set for weekly losses.

 Oil prices rose about 1% on Friday on signs that U.S. crude output was set to slow, but both benchmarks also snapped their longest weekly winning streak since 2023 as concerns over global demand growth intensified. Both indicators rose on Friday after industry data showed the U.S. oil and gas rig count, a leading indicator of future output, fell for a sixth straight week. Falling U.S. production could exacerbate an expected supply crunch for the rest of the year.

Production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies have fueled those concerns, at one point driving oil prices up for seven straight weeks since June. In the seven weeks, Brent rose about 18 percent, while WTI rose 20 percent.

Ed Moya, senior market analyst at Oanda, said this week that oil prices were under a lot of pressure as Wall Street became increasingly nervous about the economic outlook for large economies such as the United States. He also said that more and more traders realized that the prospect of a soft landing in the United States may not be conducive to containing inflation.

Upbeat U.S. economic data, including the latest weekly jobless claims and the latest monthly retail sales figures, point to a positive direction for the U.S. economy.

However, the direction isn't entirely positive for the Fed, as a tight labor market and higher spending could keep inflation elevated for longer, so expectations for more rate hikes will emerge among traders.

Still, supply concerns haven't gone away. Momentum indicators point to tight supply, ANZ analysts said in their latest report. Investors have begun increasing their bullish bets, with net-long positions reaching yearly highs.

 The dollar was flat on Friday but was on track for a fifth straight weekly gain, its longest winning streak in 15 months, as economic concerns and bets that U.S. interest rates will stay high fueled demand for safer assets.

The U.S. dollar index , which measures the greenback against six major currencies, was down 0.01% at 103.380, having touched a fresh two-month high of 103.680 earlier. For the week, the dollar was up 0.5 percent. “The dollar continues to rally as the U.S. economy fares better than expected, which has led markets to push back the time frame for possible Fed easing,” said Joe Manimbo, senior market analyst at Convera.

A weaker yen kept traders wary of the risk of intervention by Japanese authorities. The yen strengthened 0.38 percent to 145.29 yen, having touched a nine-month low of 146.56 on Thursday.

Last fall, the dollar surged above 145 yen, triggering the first intervention by Japanese authorities to buy yen in decades. The Aussie rose 0.04% to $0.640, having hit a nine-month low of $0.6365 on Thursday.

Among other currencies, sterling was down 0.05% at $1.2741 after British retailers reported a larger-than-expected fall in July sales. The euro was up 0.04 percent at $1.08745, having touched a six-week low of $1.0856 on Thursday.

Looking ahead to next week, Federal Reserve Chairman Powell's speech at the Jackson Hole central bank annual meeting may provide more clues to the outlook for monetary policy. The Bank of Korea will announce an interest rate decision, and South Africa will host a summit of BRICS leaders. In terms of data, the focus can be on the Purchasing Managers Index (PMI) of major economies.

OnePro Special Analyst

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