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Nasdaq Wrap
The Friday session in New York saw US equities close out a feisty, volatile and disordered week of rotation on a positive note, the S&P 500 adding more than 1.1%.
Still. For the week, the S&P 500 ended 1.5% lower. The tech heavy Nasdaq got smashed by 3.8%.
The Dow Jones Industrial Average added 0.7%.
The week wrong-footed punters from the outset with a stunning twist, reminiscent and worthy of John Woo’s 1997 Travolta/Cage opus, Face Off, when Democrats swapped out the incumbent Joe Biden with unencumbered Kamala Harris.
And according to a Wall Street Journal poll released on Sunday, the all-new US presidential race is no longer a foregone conclusion, now that it features the nearly-nominee Kamala and the Republicans’ forever-nominee Donald Trump.
Mr Trump leads Ms Harris by 49% to 47%, as per the WSJ.
While the former president remains ahead of the current vice president by a good nose or perhaps an ear, the lead – much like the appendage – has been trimmed significantly.
The WSJ says that’s a sharp reversal of the growing six-point gap the fearless and earless assassination survivor was opening up Vs the hapless and diminished standing US president Mr Biden.
“(Kamala) Harris has made strides in reassembling the coalition that put Biden in the White House in 2020, one that had been fraying under the stress of unease about his physical and mental sharpness,” the Journal noted.
Meanwhile, on Saturday night in Nashville, crypto’s new official spokesman, Donald Trump promised the moon to screaming acolytes at the Bitcoin 2024 conference, saying he planned to make America “the crypto capital of the world.”
“I pledge to the bitcoin community, the day I take the oath of office, Joe Biden and Kamala Harris’ anti-crypto crusade will be over ,” Mr Trump said.
Proposed measures include sacking the securities watchdog boss (‘cos), creating a national BTC “stockpile” and, in turn, making BTC a “permanent national asset.”
The market response to Trump’s crypto-pumping dressed as policy will be fun to watch this week. Already, (as I glance at my inbox this morning) the top BTC-hoarding crypto analysts are tweaking their price predictions to the power of infinity.
So without telling anyone their business, might be wise to brace for more volatility this week.
As if to emphasise the rising stakes – four of the Seven which are Magnificent US tech companies report in the coming days.
Last week the tech lighter Nasdaq dropped more than 2.5%, as market participants digested less terrific quarterlies, the fresh Goldilocks US data drops, and busied themselves with the unkempt rotation out of mega tech.
Everyone’s new US bestie, the Russell 2000 small caps index jumped 3.5%.
As if to prove the point, the cunning and iconic maker of Post-it notes, 3M ended the final session up 23% – its biggest session since 1980.
US traders chewed over the fresh promises of looming US rate cuts in the shape of perky macroeconomic numbers and friendly inflation data.
The American economy grew at an annual rate of 2.8% in the June quarter, just smacking consensus of 2.0%.
Equally enticing for investors, the Core US PCE price index rose at a rate of 2.9%, down from the previous quarter’s 3.7% and a gentle beat on the expected 2.7%.
Initial US jobless claims dropped by 10k, largely as expected. while the Kansas City Fed’s manufacturing index fell into contraction.
The message?
Soft landings, falling inflation, easing interest rates, heaps of crypto, almost no China and utterly America First is still a going bet on Wall Street.
But it’s no stroll through Central Park.
The midweek selloff which beset the S&P500 and Nasdaq Composite quickly descended into the biggest single session losses for both indices since 2022.
The ungainly Wall St pivot into rate sensitive, cyclical and small cap stocks was a moveable feast last week and from here, quite unpleasant to watch. In after hours trade on Wednesday the panic-that-is-always-just-under-the-surface, surfaced when Tesla (TSLA) fell 13% and the usually unflappable share price of Google-parent Alphabet (GOOG) fell in a relative slump, losing 5% in its worst session of 2024.
Rotation or no, Microsoft (MSFT) and Amazon (AMZN) rose more than 1% each last week, but they’ll both have the chance – alongside fellow Mega Seven stocks Apple (APPL) and Meta (META) – to lose it all again when they report earnings this week.
In the past two weeks, hundreds of US-listed companies reported quarterly earnings.
As of Friday in New York, 41% of US S&P 500 companies have now reported June quarter earnings, but the results are looking a bit softer this time around with only 78.6% beating expectations which is above the norm of 76% but below the experience of the last reporting season.
Outside the Mega Seven earnings feast this week, New York welcomes a host of other big names open the books. Co’s like Intel (INTC) to McDonald’s (MCD) to Exxon Mobil (XOM) to name but three. (I’ll make a highlight reel below.)
How Wall Street will respond to any mega tech earnings let downs could dominate equity moves now anything other than outsized success suddenly looks like stretched valuations
The S&P500 will start the week only circa 5% short of its recent record high and 13% ahead, year to date. So investors and their stocks still have a lot to lose if some of these big US companies don’t knock this quarter out of the park.
Monday
McDonald’s (MCD), ON Semiconductor (ON)
Tuesday
Microsoft (MSFT), Procter & Gamble (PG), Merck (MRK), Advanced Micro Devices (AMD), Pfizer (PFE), Starbucks (SBUX), and S&P Global (SPGI).
Wednesday
Meta Platforms (META), Mastercard (MA), Qualcomm (QCOM), Arm Holdings (ARM), Boeing (BA), eBay (EBAY)
Thursday
Amazon (AMZN), Apple (AAPL), Intel (INTC), Block (SQ), DoorDash (DASH), Conoc Phillips (COP), Anheuser-Busch InBev (BUD), Roblox (RBLX).
Friday
Chevron (CVX), Exxon Mobil (XOM)
It’s another blockbuster week for Fed fans, with US markets currently pricing in a wee chance of a Wednesday rate cut, but half a week is a lifetime in US macroeconomics and presidential politics. According to Refinitiv, a September cut from the Fed is fully a go-go.
After the Fed decision comes the Fed presser.
Then the week over that way is largely about the US jobs market – not in anyway inconsequential and rather a key determinant for Fed Chair J. Powell and Friends when picking the path to lower interest rates.
Jolts jobs on Tuesday. ADP payrolls on Wednesday. Weekly jobless claims on Thursday. July non-farm payrolls on Friday.
MONDAY
Thailand Market Holiday
Taiwan Consumer Confidence (Jul)
United Kingdom Mortgage Lending and Approvals (Jun)
TUESDAY
Japan Unemployment Rate (Jun)
Australia Building Permits (Jun, prelim)
Spain Inflation (Jul, prelim)
Eurozone GDP (Q2, flash)
Eurozone Economic Sentiment (Jul)
Germany Inflation (Jul, prelim)
Mexico GDP (Q2, prelim)
United States S&P/Case-Shiller Home Price (May)
United States JOLTs Job Openings (Jun)
United States CB Consumer Confidence (Jul)
WEDNESDAY
South Korea Industrial Production (Jun, prelim)
Japan Industrial Production and Retail Sales (Jun)
Australia Inflation (Q2)
China (Mainland) NBS PMI (Jul)
Japan BoJ Interest Rate Decision
Japan Consumer Confidence (Jul)
Japan Housing Starts (Jun)
Germany Retail Sales (Jun)
Saudi Arabia GDP (Q2, prelim)
France Inflation (Jul, prelim)
Germany Unemployment Rate (Jul)
Taiwan GDP (Q2, advance)
Hong Kong SAR GDP (Q2, advance)
Eurozone Inflation (Jul, flash)
Italy Inflation (Jul, prelim)
United States ADP Employment Change (Jul)
Canada GDP (May)
United States Fed Interest Rate Decision
Brazil BCB Interest Rate Decision
THURSDAY
Switzerland Market Holiday
Worldwide Manufacturing PMIs, incl. global PMI* (Jul)
South Korea Trade (Jul)
Australia Trade (Jun)
Indonesia Inflation (Jul)
United Kingdom Nationwide Housing Prices (Jul)
Eurozone Unemployment Rate (Jun)
United Kingdom BoE Interest Rate Decision
United States ISM Manufacturing PMI (Jul)
FRIDAY
South Korea Inflation (Jul)
Australia Home Loans (Jun)
Switzerland Inflation (Jul)
Italy Industrial Production (Jun)
United States Non-Farm Payrolls, Unemployment Rate,
Average Hourly Earnings (Jul)
United States Factory Orders (Jun)
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