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Wednesday, August 13

Noteworthy macro moves today: Ethereum +2.4%. Noteworthy US mega-cap moves today: UnitedHealth Group Inc (UNH) +1.5%. Eli Lilly and Co (LLY) +1.4%. 

Recent market movements have been significantly influenced by the latest U.S. inflation data, which showed headline Consumer Price Index (CPI) holding steady at 2.7% year-over-year while core CPI rose to 3.1%, exceeding expectations and indicating persistent underlying inflation pressures. This mixed report has led to increased speculation regarding potential interest rate cuts from the Federal Reserve, with traders now pricing in a high probability of a reduction as early as September.

In addition to domestic economic indicators, geopolitical developments are also shaping investor sentiment; notably, President Trump extended a tariff truce with China for another three months amid ongoing trade negotiations between the two nations. This decision is seen positively by markets and contributed to bullish trends across major equity indices such as the S&P 500 and Nasdaq Composite reaching record highs recently.

Furthermore, Japan's Nikkei index surged following improved corporate earnings forecasts amidst easing concerns over U.S.-China tariffs affecting Japanese exports negatively due to favorable currency dynamics that enhance overseas profits when converted back into yen. The overall positive risk appetite among investors reflects optimism about both macroeconomic stability and international trade relations moving forward.

iShares China Large-Cap ETF (FXI) [+2.4%]
The iShares China Large-Cap ETF (FXI) has risen by approximately 2.4% in pre-market trading, buoyed by notable gains in Chinese tech and electric vehicle stocks following a 90-day extension of the U.S.-China trade truce. This agreement allows for further negotiations on trade imbalances while maintaining existing tariffs. Key stocks such as Alibaba, Baidu, JD.com, and NIO have shown significant premarket increases, reflecting a broader rally in Chinese equities supported by improved domestic liquidity and record household savings. The CSI 300 Index has increased notably since April, aided by government measures aimed at market stabilization. Additionally, U.S. inflation data revealed a steady Consumer Price Index, with core inflation surpassing expectations, which has positively influenced sentiment towards FXI. Among the ETF's top performers, Tencent Holdings reached a four-year high due to strong financial results, while JD.com prepares to announce its second-quarter earnings amid concerns over potential profit decline.

Ethereum (ETH/USD) [+2.8%]
Ethereum's price has increased notably, buoyed by record inflows into Ethereum exchange-traded funds (ETFs), which reached over $1 billion on Monday. This surge reflects significant institutional interest in ETH. Concurrently, the U.S. Consumer Price Index report revealed core inflation at 3.1%, aligning with expectations for a Federal Reserve rate cut in September, an environment typically favorable for cryptocurrencies. Social media discussions highlighted BlackRock's recent acquisition of $318.7 million worth of ETH and noted that the cryptocurrency is nearing its previous all-time high, just $150 away. Predictions suggest a 75% chance of Ethereum reaching this high by August 31. Furthermore, Standard Chartered Bank has revised its year-end price forecast for Ethereum to $7,500, driven by increased demand from ETFs and heightened on-chain activity, alongside a reported $27 billion in capital ready to purchase more ETH.

ESLT | +6.6% | +1.4B
Elbit Systems Ltd | Aerospace & Defense
Elbit Systems Ltd. announced a substantial $1.635 billion contract to deliver defense solutions to a European country over the next five years, emphasizing advanced technologies such as long-range artillery systems and unmanned aerial combat systems. The company reported a Q2 net income of $125.69 million, an increase from $78.37 million year-over-year, with revenues reaching $1.973 billion, reflecting a 21% rise from the previous year's $1.626 billion. Non-GAAP EPS was reported at $3.23, surpassing the analyst estimate of $2.57 by over 25%. As of June 30, Elbit's order backlog stood at $23.8 billion, indicating strong demand for its offerings and strategic positioning within the European market.

AMD | +2.6% | +7.5B
Advanced Micro Devices Inc | Semiconductors
Advanced Micro Devices Inc. (AMD) is experiencing notable market activity, with its stock increasing in premarket trading. This follows comments from CEO Lisa Su about the importance of bringing manufacturing back to the United States. Concurrently, reports indicate that U.S. authorities are implementing tracking devices in high-risk AI chip shipments, including those from AMD, to prevent illegal diversions to China. Discussions on social media reflect this development, highlighting the regulatory scrutiny surrounding semiconductor supply chains. Additionally, there were conversations regarding AMD's price movement, noting significant trading activity and a bounce off its 50-day moving average, with potential targets suggested around previous highs.

TCEHY | +4.9% | +34.0B
Tencent Holdings Ltd | Interactive Media & Services
Tencent Holdings has reached a four-year high, trading at 572.50 HKD, the highest level since July 2021. The stock has gained significantly over the past four weeks and increased substantially over the last twelve months. For the second quarter, Tencent reported a net income of CNY 55.63 billion, up from CNY 47.63 billion year-over-year, with revenue of CNY 184.50 billion, exceeding analysts' projections by approximately 3%. The company experienced double-digit growth across most major business segments, with domestic revenue rising to CNY 40.4 billion and international revenue climbing to CNY 18.8 billion. Recent social media discussions highlighted a notable rise in the Hang Seng Tech index and reported that Tencent's Q2 results surpassed consensus estimates in various categories, including adjusted net income and operational income. Notably, Tencent did not declare an interim dividend.

TME | +2.8% | +2.5B
Tencent Music Entertainment Group | Movies & Entertainment
Barclays has maintained an Overweight rating on Tencent Music Entertainment Group, raising its price target from 16 to 27. Mizuho has also increased its price target for the company to 28 from 17 while keeping an Outperform rating. Citigroup similarly maintained a Buy rating and raised its price target from 23 to 29. Concurrently, the Hang Seng Tech index rose significantly today, marking its largest single-day gain since May 12, following a strong earnings report from Tencent Holdings and its subsidiary Tencent Music for the second quarter of 2025. Tencent Holdings reported revenues of 25.7 billion, surpassing estimates of 24.9 billion, and earnings per share of 0.945, exceeding the expected 0.902.

LLY | +1.4% | +8.4B
Eli Lilly and Co | Pharmaceuticals
Eli Lilly and Co's CEO, David Ricks, purchased 1,632 shares of common stock on August 12 for $1.05 million, at a price of $644.769 per share. This transaction was part of a broader trend of insider buying, with other executives, including CSO Daniel Skovronsky, also making significant purchases. Skovronsky acquired 1,000 shares at $634.405 each, totaling $634,405. Concurrently, Eli Lilly launched an injector pen for its weight-loss drug Mounjaro in India, pricing it competitively at 14,000 rupees ($160) for the 2.5 mg dose and 17,500 rupees ($200) for the 5 mg dose. This move positions Mounjaro against Novo Nordisk's Wegovy. Additionally, Texas Attorney General Ken Paxton announced a lawsuit against Eli Lilly, alleging bribery related to its diabetes and weight-loss drugs, including Mounjaro and Zepbound.

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