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Wednesday, July 31

Some of the largest macro moves in the market today include: Nasdaq 100 Index (US) +2.3%. S&P 500 Index (US) +1.5%. Oil (WTI) +2.6%. Some of the largest moves among US mega-cap stocks include: NVIDIA Corp (NVDA) +6.7%. Broadcom Inc (AVGO) +6.1%. Mastercard Inc (MA) +2.5%. 

The Bank of Japan has raised its key short-term interest rate to 0.25%, marking a significant policy shift that is impacting global markets, particularly the Japanese yen and equity indices in Asia. This move comes amid ongoing discussions about potential further adjustments by other central banks.

In the United States, economic data reveals a slowdown in employment costs for civilian workers and private sector job growth below forecasts for July, indicating moderating wage pressures which could influence future Federal Reserve decisions on monetary policy as they prepare their upcoming announcement later today.

European inflation rates have unexpectedly edged up with both headline and core measures rising more than anticipated in July; this development may affect European Central Bank's stance on interest rates moving forward amidst already heightened market sensitivity due to recent geopolitical tensions affecting energy prices globally.

USD/JPY [-1.7%]
The USD/JPY has dropped significantly. The Bank of Japan has raised its key short-term interest rate by 15 basis points to a range of 0.15%-0.25%, marking a notable departure from its previously ultra-loose monetary policy. This shift aims to stabilize inflation and support economic growth in Japan amid rising import prices, contributing to the strengthening of the Japanese Yen against major currencies, including USD/JPY. Additionally, escalating geopolitical tensions following recent events in Israel have introduced further volatility in currency movements, particularly affecting safe-haven flows toward the Yen. The market is experiencing heightened volatility due to this unexpected interest rate decision, which typically results in significantly increased fluctuations for the USD/JPY pair during such announcements.

QQQ [+2.2%]
Invesco QQQ Trust Series I has experienced a price increase of 2.2% in pre-market trading, reflecting a broader market uptrend. The ETF reached highs of 2.05% during this session, influenced by recent economic indicators and government actions. Key contributors to the ETF's performance included NVIDIA, which saw significant gains due to advancements in AI memory chip development and cloud integration with Microsoft. Advanced Micro Devices also reported strong second-quarter results, surpassing expectations and boosting its stock price. Apple demonstrated resilience amid industry concerns regarding smartphone demand, while receiving legal affirmation on privacy rights for its tracking devices. Other notable performers included AVGO and QCOM, further supporting the ETF's upward movement.

AMD |+7.5%|+18.1B
Advanced Micro Devices Inc (AMD) has experienced a significant price increase, correlating with a broader market uptrend, as evidenced by the Nasdaq 100 Index's rise. The company's recent Q2 2024 results showcased strong performance, with adjusted earnings per share of $0.69, slightly above expectations, and revenues of $5.835 billion, surpassing market forecasts. Notably, data center revenue surged by 115%, reflecting robust demand for its MI300 and EPYC processors. For Q3, AMD anticipates revenue in the range of approximately $6.7 billion, exceeding average market estimates. The company also projects a non-GAAP gross margin of about 53.5%. Following these announcements, AMD shares gained traction in after-hours trading, aligning with the overall positive sentiment in the technology sector.

NVDA | +6.9% | +188.0B
NVIDIA Corp is experiencing a notable price increase, moving in tandem with the broader market and its sector, which are also rising significantly. In company-specific news, Samsung Electronics has reportedly made progress in AI memory chip development, having received approval from NVIDIA for a version of high bandwidth memory chips. This development is crucial in the competitive AI landscape. Additionally, Microsoft has announced enhancements to its Azure cloud platform, integrating advanced hardware accelerators from NVIDIA to improve its AI capabilities. This integration supports a substantial year-over-year revenue growth for Azure, driven by heightened demand for AI services.

MSFT |-2.1%|-65.4B
Microsoft's stock has declined by 2.1% in pre-market trading following a costly IT outage impacting Delta Airlines, which the airline attributed to Microsoft systems. Delta's CEO indicated that this incident could lead to a $500 million loss due to canceled flights. In addition, Citigroup and UBS have both revised their price targets for Microsoft, lowering them from 520 to 500 and from 520 to 510, respectively. Despite reporting a 15% year-over-year revenue increase to 64.7 billion and exceeding earnings expectations with an EPS of 2.95, concerns linger regarding underperformance in cloud sales. The stock closed at 422.92, having already dropped by nearly 3% in after-hours trading.

BA |+1.9% | +2.2B
Boeing Co's stock has increased significantly in the pre-market session, aligning with a broader market uptrend. The company reported a revenue decline of 15% year-over-year to $16.87 billion, missing analyst expectations. The adjusted loss per share widened to $(2.90), also below the anticipated $(1.91). Commercial Airplanes revenue dropped significantly, with deliveries falling to 92 from 136 in the prior year. Boeing's total backlog remains substantial at $516 billion, encompassing over 5,400 airplanes. Additionally, debt rose to $57.9 billion from $47.9 billion at the beginning of the quarter. In a leadership change, Kelly Ortberg has been appointed as the new President and CEO, effective August 8, 2024.

SBUX |+4.3%|+3.9B
Starbucks Corp is experiencing a notable price increase, aligning with the broader market's upward movement and outperforming its sector peers. The company reported third-quarter earnings of $0.93 per share, matching analyst expectations, although sales fell short at $9.11 billion compared to the consensus of $9.24 billion. This represents a decline from $9.17 billion year-over-year. Despite these mixed results, Starbucks opened 526 net new stores, bringing its total to 39,477 locations, with 52% company-operated and 48% licensed. North America revenue was $6.816 billion, while international revenue reached $1.842 billion, and channel development segment revenue was $438.3 million. Active U.S. rewards memberships increased by 7% year-over-year to 33.8 million. The board declared a cash dividend of $0.57 per share, payable on August 30. The company reaffirmed its EPS guidance for FY2024 at $4.07-$4.25 and revenue guidance between $38.5 billion and $39.6 billion.

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