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Monday, August 19

Some of the largest macro moves in the market today include: USD/CNH -0.3%. Some of the largest moves among US mega-cap stocks include: Alphabet Inc (GOOG) +1.5%. Alphabet Inc (GOOGL) +1.4%. 

The upcoming Jackson Hole Symposium is a key focus for markets this week, with speeches from Fed Chair Jerome Powell and other central bank officials anticipated to provide insights into future monetary policy. This event follows recent data showing improved U.S. consumer sentiment but weaker housing starts in July.

Japan's core machinery orders rose by 2.1% month-over-month in June, exceeding market expectations and marking the first increase since March, which has influenced movements in Japanese equities as well as currency fluctuations involving the yen.

Global equity indices are experiencing mixed performance; European stocks have shown modest gains while Asian markets presented varied results amid concerns over Chinese demand impacting commodity prices such as oil and gold.

SPDR Gold Shares (GLD) [-0.6%]
Gold prices have declined since Friday, currently trading below 2,500. This follows a recent surge to all-time highs amid escalating geopolitical tensions and expectations of a Federal Reserve rate cut in September. The rejection of ceasefire terms by Hamas has heightened safe-haven demand for gold, as market volatility persists. Additionally, comments from Federal Reserve officials have expressed caution regarding monetary policy adjustments, which continues to support bullish sentiment surrounding gold investments. SPDR Gold Shares (GLD) has mirrored this movement, reflecting the broader trends in the gold market.

USD/JPY [-1.0%]
The USD/JPY has dropped significantly today, trading just above 146.00 amid expectations of a potential interest rate cut by the Federal Reserve in September. Dovish remarks from Fed officials have underscored a cautious approach to maintaining restrictive monetary policy. Concurrently, geopolitical tensions have intensified, particularly following Hamas's rejection of ceasefire terms discussed last week, adding to market volatility. The Japanese Yen has strengthened against major currencies, bolstered by positive economic data reflecting growth in Japan's GDP and Machinery Orders. Additionally, the USD/CNH has declined, reflecting broader market sentiment that may also be influencing the movement in USD/JPY.

EL |-2.3%|-767.1M
Estee Lauder Companies Inc reported adjusted earnings per share of $0.64 for Q4 2024, surpassing the consensus estimate of $0.27, with sales reaching $3.871 billion, exceeding expectations of $3.830 billion. Despite these positive results, the company issued a disappointing outlook for fiscal 2025, projecting adjusted earnings between $2.75 and $2.95 per share, significantly below the $3.97 estimate, alongside expected sales declines of 1% to 2%, attributed to weak consumer sentiment in China. Additionally, CEO Fabrizio Freda announced plans to retire at the end of fiscal 2025. Following these announcements, shares of Estee Lauder experienced a notable decline in premarket trading, with stock dropping significantly shortly after the earnings report was released.

AMD | +2.6% | +6.4B
Advanced Micro Devices has entered into a definitive agreement to acquire ZT Systems for approximately 4.9 billion, with a potential earnout of up to 400 million based on future milestones. This acquisition aims to enhance AMD's capabilities in AI infrastructure, particularly for hyperscale computing companies. The transaction is expected to be accretive on a non-GAAP basis by the end of 2025. ZT Systems specializes in designing and optimizing cloud computing solutions, which will enable AMD to accelerate the deployment of AI infrastructure at scale. This move aligns with AMD's strategy to compete with Nvidia in the AI chip market. Concurrently, AMD's stock has increased by 2.4% since Friday, reflecting positive market sentiment around its growth potential in the Data Center and AI segments, despite ongoing challenges in other areas of its business.

HWM |-2.1%|-818.9M
Howmet Aerospace Inc (HWM) has experienced a decline of 2.1% in pre-market trading. This movement coincides with a slight decrease in the Dow Jones Index, which has dropped marginally. The broader market sentiment may be influencing HWM's performance. Despite this recent price action, Howmet Aerospace reported strong earnings for Q2 2024, showing a significant year-over-year revenue increase driven by the commercial aerospace sector. The company continues to benefit from robust air travel demand, particularly in the Asia-Pacific region, and has raised its expectations for Boeing's 737 build rate. Overall, the outlook for Howmet remains positive, supported by expanding margins and a resilient commercial aerospace market, although it is currently underperforming relative to its sector peers.

GOOGL |+1.3% | +27.3B
Alphabet Inc's stock has risen by 1.3%, driven primarily by a significant upward movement in the Interactive Media & Services sub-sector. Analyst Laura Martin from Needham has reiterated a Buy rating on Alphabet, maintaining a price target of 210. This endorsement underscores confidence in the company’s performance within a competitive landscape. Additionally, recent reports from Jefferies Financial Group and Evercore ISI have raised their price targets, with Evercore assigning an "outperform" rating. The consensus among analysts reflects 28 buy ratings and a "Moderate Buy" sentiment overall. Alphabet's financial metrics indicate strong performance, highlighted by a notable return on equity and net margin. Furthermore, the company has announced a quarterly dividend of 0.20, showcasing a modest payout ratio.

XPEV |+2.7% | +368.9M
Xpeng Inc. is expected to report a narrower net loss for the second quarter, with an earnings announcement scheduled for Tuesday. The EPS estimate stands at -0.18, an improvement from the previous -0.43, alongside a revenue estimate of $1.1 billion, up from $698.2 million. A recent social media highlight discussed the company's future prospects and the sales of the Xpeng X9, a pure electric large 7-seater, which positions Xpeng favorably in the electric MPV market segment. Concurrently, Tesla's stock has seen a decline, potentially affecting competitive dynamics within the electric vehicle sector.

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