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Wednesday, August 7

Some of the largest macro moves in the market today include: S&P 500 Index (US) +1.5%. Nasdaq 100 Index (US) +2.0%. Oil (WTI) +2.4%. Some of the largest moves among US mega-cap stocks include: NVIDIA Corp (NVDA) +2.9%. Microsoft Corp (MSFT) +2.3%. Broadcom Inc (AVGO) +2.2%. 

Recent comments from the Bank of Japan's Deputy Governor Shinichi Uchida have significantly impacted global markets. He emphasized that the central bank will avoid raising interest rates during periods of market instability, which has helped to calm investor nerves and support a rebound in equity indices across Asia, Europe, and North America.

Economic data releases are also influencing market movements. In Germany, industrial production rose by 1.4% month-over-month in June 2024, exceeding expectations and providing some optimism about economic activity despite mixed trade balance figures showing declining exports but rising imports. Meanwhile, US mortgage applications surged by 6.9%, driven by falling mortgage rates amid dovish Federal Reserve sentiment.

China reported stronger-than-expected import growth at 5.4% year-on-year for July while export growth slowed to its lowest rate since April at 6.7%. This mixed trade data contributed to concerns over China's economic health but was somewhat offset by an increase in domestic demand reflected through higher imports.

USO [+2.4%]
The United States Oil Fund LP rose by 2.8% following President Trump's announcement regarding the filling of strategic oil reserves, signaling potential increased demand. Concurrently, WTI crude prices increased to $74.80, reflecting broader market strength despite ongoing economic uncertainty in key regions. Brent crude futures also climbed to $77.14 per barrel, supported by Federal Reserve officials' reassurances about the U.S. economy's stability. Additionally, China's imports surged by 7.2% year-over-year, suggesting robust domestic demand that may enhance global oil consumption. The API Crude Oil Stock Change report indicated a smaller-than-expected increase in inventories, contributing to positive market sentiment. Historically, the United States Oil Fund LP has exhibited significant volatility in response to API data releases.

QQQ [+1.3%]
Invesco QQQ Trust Series I (QQQ) has seen a price increase of 1.3%. Significant contributions to this performance came from holdings such as NVIDIA, Microsoft, Amazon, Broadcom, and Meta Platforms, all of which posted positive returns. Notably, NVIDIA's collaboration with Samsung on chip technology continues to bolster its position. Microsoft is addressing a cyber outage claim from Delta Air Lines, while Amazon's recent share acquisition by ARK Investment reflects ongoing competitive dynamics. Meta announced a benchmark deal that enhances its market positioning. Additionally, the Russell 2000 Index rose by 2.01%, suggesting broader market movements that may also influence QQQ's performance.

NVO |-3.5%|-14.7B
Novo Nordisk A/S has reported second-quarter earnings that fell short of analyst expectations, posting a net profit of DKK 20.05 billion versus a forecast of DKK 21.38 billion. Quarterly sales also came in lower at DKK 68.06 billion, compared to the anticipated DKK 68.66 billion. The company has revised its full-year operating profit growth guidance down to a range of 20%-28%, while raising its sales growth outlook to 22%-28%. An impairment charge of DKK 5.7 billion from a failed hypertension drug trial impacted profitability, alongside ongoing supply constraints for its weight-loss drug Wegovy. In pre-market trading, the stock saw a decline of 3% following the CEO's remarks on H1 2024 sales growth, amid challenges in quarterly earnings and competition in the obesity medicine sector. Additionally, Q2 earnings per share came in lower at $0.65 compared to the expected $0.69, with revenues at $9.8 billion against an expectation of $10.0 billion.

ABNB | -13.6% | -9.7B
Airbnb Inc. has experienced a notable decline in stock price, dropping significantly following several analyst downgrades and a mixed earnings report. Analysts have reduced price targets, with Wells Fargo lowering theirs to 100, Susquehanna to 130, and Baird to 120. The company reported quarterly sales of 2.748 billion, slightly above estimates, but its GAAP earnings of 86 cents per share missed the consensus estimate of 92 cents. During the earnings call, Airbnb cautioned about a potential slowdown in bookings due to various global factors and new regulations in California. Furthermore, the company set its Q3 revenue guidance at 3.7 billion, which fell short of analyst expectations. The overall sentiment surrounding the stock has been negatively impacted by these developments, alongside signs of waning demand from U.S. customers and a global trend of shorter booking lead times.

SHOP |+18.1%|+14.9B
Shopify Inc reported its Q2 2024 earnings, revealing a GAAP EPS of $0.13, which exceeded the $0.12 estimate. The company achieved quarterly sales of $2.00 billion, marking an 18.06% increase from the previous year, although it fell slightly short of the $2.01 billion forecast. Merchant Solutions revenue was reported at $1.48 billion, and Gross Merchandise Volume rose by 22% to $67.2 billion. Looking ahead, Shopify anticipates revenue growth in the low-to-mid-twenties percentage range for Q3 2024, alongside an expected gross margin increase of approximately 50 basis points compared to Q2 2024. This positive earnings report coincides with a significant price movement, as Shopify's stock has increased by over 18% since Tuesday.

LUMN |+39.9% | +2.8B
Lumen Technologies reported a Q2 loss of $0.13 per share, missing the analyst consensus estimate of a $0.06 loss. Revenue reached $3.27 billion, surpassing expectations of $3.25 billion. The stock's significant gains followed these mixed results, driven by strong demand for its high-capacity fiber network supporting AI initiatives. Lumen raised its free cash flow forecast for 2024 to between $1 billion and $1.2 billion, a substantial increase from the previous estimate of $100 million to $300 million. Additionally, there was a notable rise in sales from North American Large and Mid-Market Enterprise sectors, further contributing to the stock's upward movement.

NVDA |+2.4%|+63.8B
NVIDIA Corp is experiencing a notable price increase, aligning with the broader market's upward movement. Concurrently, Samsung's 8-layer HBM3E chips have successfully passed NVIDIA's tests for use, highlighting the company's ongoing collaboration with key technology partners. This development is complemented by a rebound in the tech sector, which may positively influence sentiment towards NVIDIA. Additionally, Dan Nathan's commentary on a potential guidance down, coupled with an upgrade to Buy at New Street following a significant pullback, has drawn attention to the stock. The anticipated earnings announcement in two weeks further adds to the focus on NVIDIA's performance.

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