Sekmadienis, 21 liepos, 2024
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Market Update: Tech Stocks Propel S&P 500 and Nasdaq, Bond Yields Soar, and Global Currencies React

On Monday, the S&P 500 and the Nasdaq surged by 0.7% and 1.6%, respectively, thanks to robust gains in the tech sector. Nvidia and Tesla took the spotlight, propelling the market upward. Nvidia saw an impressive 8.5% jump, boosted by HSBC raising its price target to $780 just ahead of the chip giant’s earnings announcement this Wednesday. Meanwhile, Tesla bounced back with a 7.3% gain after a challenging week marked by a significant 11% dip in response to price cuts in China.

Stocks

Palo Alto Networks, a cybersecurity company, showed remarkable strength, with a 14.8% increase in its stock price, following a forecast that exceeded expectations for billings. However, the Dow Jones didn’t share the same enthusiasm, finishing 0.1% lower. Johnson & Johnson weighed heavily, with a 3% drop, as the company disclosed plans to maintain a 9.5% stake in its newly separated consumer health unit, Kenvue.

This week, all eyes are on the annual Jackson Hole symposium and Federal Reserve Chair Jerome Powell’s speech on Friday. Powell’s words will likely provide further insights into the future trajectory of interest rates.

Money

The US 10 Year Government Bond Yield soared to a near 16-year high of 4.3518%, indicating growing expectations of higher interest rates. The dollar index remained robust at nearly 103.5, near its highest level in over two months. Investors are increasingly confident that Powell’s speech in Jackson Hole could signal an extended period of higher interest rates.

Fed Minutes Hint at Tightening

Recent minutes from the Fed’s July meeting revealed a focus on the potential for increased inflation risks, leaving room for further policy tightening. However, concerns about the economic consequences of pushing rates too far also surfaced.

China’s Central Bank Adjusts Rates

In contrast, China’s central bank lowered its one-year loan prime rate but kept the five-year rate steady. This move is seen as an effort to balance economic stability.

Currency markets saw the EUR rise and the GBP stabilize, while the AUD, NZD, and JPY weakened to nine-month lows. The Swiss franc stood at 0.87 per USD, holding firm despite a strong US dollar. This strength is supported by expectations that the Swiss National Bank will continue its rate-hiking cycle to manage inflation risks.

Lithium Carbonate Prices Decline

Lithium carbonate prices continued to drop in August, reaching their lowest point in three months. This decline is due to low demand from battery manufacturers and reduced consumer spending on electric vehicles in China.

Challenges for Electric Vehicle Producers

Chinese new-energy vehicle producers faced headwinds as input inventories piled up and government subsidies dwindled. Additionally, a challenging macroeconomic environment in China led to reduced consumer spending on electric automobiles, prompting some manufacturers to offer price cuts to meet sales targets.

In conclusion, the markets are in flux with tech stocks leading the charge, bond yields soaring, and global currencies reacting to various economic factors. Investors are eagerly awaiting Powell’s speech for further guidance on the future of interest rates.

Signals

TSLA position closes with 9.56% profit:

TSLA
TSLA

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