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Monday, August 5

Some of the largest macro moves in the market today include: S&P 500 Index (US) -4.1%. Nasdaq 100 Index (US) -5.7%. Ethereum -16.5%. Some of the largest moves among US mega-cap stocks include: NVIDIA Corp (NVDA) -13.8%. Tesla Inc (TSLA) -10.7%. Broadcom Inc (AVGO) -9.9%. 

Global markets are experiencing significant turmoil, with Japan's Nikkei 225 Index plummeting over 12% on Monday and entering bear market territory. This dramatic decline has triggered circuit breakers in Japanese exchanges and is the largest single-day drop since October 1987. The sell-off extends beyond Asia, affecting European indices like Germany’s DAX and France’s CAC as well as U.S. futures.

Economic data releases have added to recession fears globally. In the Eurozone, services PMI fell to a four-month low of 51.9 in July while producer prices declined by 3.2% year-on-year for June—marking continued deflationary pressures across key sectors such as energy and intermediate goods despite slight improvements from previous months' figures.

Geopolitical tensions further exacerbate market instability; conflicts between Israel-Iran escalate alongside concerns about Russia aiding Houthis targeting commercial ships near Yemen which adds complexity to global dynamics impacting commodities like oil that saw Brent crude fall sharply amid these uncertainties coupled with weak economic indicators suggesting potential recessions ahead.

ETH/USD [-16.1%]
Ethereum (ETH/USD) has dropped significantly today, influenced by broader market turmoil due to escalating geopolitical tensions in the Middle East and disappointing U.S. economic data, particularly weak Nonfarm Payrolls showing only 114K jobs added against expectations of 175K. Notably, Ethereum faced substantial withdrawals, with net outflows totaling $146 million, reflecting a trend affecting digital asset investment products amid recessionary fears driving investors towards safer assets like gold and government bonds. Additionally, Bitcoin (BTC/USD) declined sharply, reflecting negative sentiment across the cryptocurrency market, as it briefly fell below $50,000 for the first time since February before rebounding slightly, further contributing to the downturn in Ethereum's price.

Nasdaq 100 Index (US100/USD) [-5.7%]
The Nasdaq 100 Index (US100/USD) is currently down significantly. This downturn follows disappointing U.S. employment data, which reported only 114,000 jobs added in July against expectations of 175,000, alongside an increase in the unemployment rate to 4.3%, the highest since November 2021. These figures have intensified recession fears and raised speculation regarding potential interest rate cuts from the Federal Reserve in September, with a projected probability of up to 74% for such actions. Concurrently, the Russell 2000 Index has also dropped, declining by 4.38%, indicating a broader risk-off sentiment in the market. Additionally, geopolitical tensions involving Iran and Israel are escalating, potentially adding further instability to financial markets globally.

AAPL |-8.9%|-272.7B
Apple Inc. shares fell significantly in pre-market trading, aligning with broader market trends. The stock declined following Berkshire Hathaway's substantial reduction of its stake in the company by nearly 50%, now holding approximately 400 million shares. This divestment was part of a larger $75.5 billion stock selloff by Berkshire, which has increased its cash reserves to a record level. Concurrently, correlated assets, including ProShares UltraPro QQQ and the Nasdaq 100 Index, also experienced notable declines. Market reactions are compounded by concerns regarding a weak jobs report and potential economic slowdown, alongside bearish sentiments from prominent investors like Warren Buffett and Bill Gross regarding the stock market's future.

NVDA | -13.9% | -315.5B
NVIDIA Corp is experiencing a significant decline, moving in tandem with the broader market downturn. Reports indicate that advanced AI chips have been smuggled into China, potentially aiding military applications, which raises concerns amid existing U.S. export restrictions. Additionally, design flaws in NVIDIA's upcoming AI chips may result in delays of three months or more, impacting major clients such as Meta, Google, and Microsoft. The company is also under scrutiny from the Department of Justice for possible monopolistic practices in the AI chip sector. These challenges are contributing to NVIDIA's notable stock price drop, reflecting its underperformance relative to sector peers.

K |+22.1%|+5.8B
Kellanova shares have surged significantly following reports that Mars Inc. is considering acquiring the company, known for its popular brands like Cheez-It and Pringles. The market value of Kellanova stands at approximately $27 billion, including debt, and this potential acquisition could rank among the largest in the packaged food sector. Additionally, Kellanova has received multiple analyst upgrades, with price targets raised to 74 by BNPP, 76 by RBC, and 73 by DA Davidson. The company recently reported strong second-quarter results, with adjusted earnings per share and sales exceeding expectations. Kellanova is currently outperforming its sector peers, potentially leading the sector's strength.

TSLA |-9.9% | -59.3B
Tesla Inc has seen a notable decline, moving in tandem with the broader market, which is experiencing significant downturns. The ProShares UltraPro QQQ dropped sharply, and the Nasdaq 100 Index also fell considerably. Company-specific news reveals a 13% decrease in EV registrations in the UK year-to-date, with a sharp 22% decline in July alone. In contrast, rival BYD reported an impressive surge in registrations. CEO Elon Musk acknowledged the competitive pressure from rivals undercutting Tesla's prices, which he described as problematic yet temporary. He also pointed to upcoming technologies, such as dry cathode 4680 cells, that could potentially reduce production costs significantly, though successful scaling remains reliant on production efficiencies.

MSTR |-26.4%|-5.0B
Microstrategy Inc has seen a notable decline in its stock price, dropping significantly as it moves in tandem with the broader market. This underperformance is compounded by a substantial decrease in Ethereum, which has also experienced a significant drop. The cryptocurrency landscape remains turbulent, with economist Peter Schiff publicly criticizing Microstrategy co-founder Michael Saylor's "never sell your Bitcoin" strategy. Schiff's remarks suggest that holding Bitcoin indefinitely may be illogical. Additionally, the U.S. government's transfer of $2 billion worth of Bitcoin has raised concerns about a potential market dump. These factors may heighten apprehensions regarding Microstrategy's Bitcoin holdings and overall investment strategy.

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