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Thursday, July 3

Noteworthy macro moves today: US 2Y Treasury Bond -0.2%. US 10Y Treasury Bond -0.4%. US Dollar Index +0.6%. 

The U.S. labor market data released today showed a mixed picture, with nonfarm payrolls increasing by 147K in June, significantly surpassing expectations of 110K and indicating robust job growth despite previous concerns about slowing hiring trends. The unemployment rate unexpectedly fell to 4.1%, down from May's figure of 4.2%, defying forecasts that anticipated an increase to 4.3%. However, average hourly earnings rose only modestly by $0.08 or 0.2% month-over-month, slightly below the expected gain of $0.30.

In Europe, the European Central Bank (ECB) has signaled caution amid ongoing trade tensions and cooling inflation rates following its eighth consecutive interest rate cut last month aimed at safeguarding economic stability within uncertain global conditions; this includes potential impacts on exports due to rising tariffs against key trading partners like China and Vietnam as well as internal pressures stemming from high energy prices.

Additionally, geopolitical developments have influenced markets: a recent trade agreement between the U.S., which eases some tariff burdens on Vietnamese goods while imposing new duties in return for greater access for American products into Vietnam is seen positively but raises questions regarding China's response amidst broader international negotiations set before July deadlines—this backdrop continues affecting investor sentiment across equities and currencies globally.

iShares 7-10 Year Treasury Bond ETF (IEF) [-0.4%, -113.1M]
The iShares 7-10 Year Treasury Bond ETF (IEF) has declined by 0.4% in pre-market trading, reflecting broader market sentiment. The US 10-Year Treasury Bond has also experienced a similar drop, while the US 2-Year Treasury Bond decreased by 0.18%. Recent labor market data revealed an unexpected decline in the unemployment rate to 4.1% and a rise in nonfarm payrolls by 147,000, both of which surpassed forecasts. Average hourly earnings growth was slightly below expectations. Additionally, the trade deficit widened to $71.5 billion, and initial jobless claims eased to 233,000. These mixed economic indicators suggest ongoing stability in the labor market amid prevailing uncertainties.

Invesco DB US Dollar Index Bullish Fund (UUP) [+0.5%]
The Invesco DB US Dollar Index Bullish Fund (UUP) has increased by 0.5% in pre-market trading, coinciding with a 0.45% rise in the US Dollar Index (USDX). This uptick follows the release of stronger-than-expected Nonfarm Payrolls data, which showed an increase of 147,000 jobs in June, surpassing forecasts. The unemployment rate fell to 4.1%, contrary to expectations of a rise. Despite this positive labor market report, average hourly earnings growth was below expectations at 0.2%. Additionally, the trade deficit widened to $71.5 billion, exceeding forecasts and reflecting a decline in exports. These developments have occurred amid ongoing trade negotiations with China and mixed performance in U.S. markets, where the S&P 500 and Nasdaq reached record highs.

DDOG | +9.0% | +4.4B
Datadog Inc | Application Software
Datadog Inc. (NASDAQ: DDOG) has seen its stock value rise significantly, increasing nearly 11% in after-hours trading following the announcement of its inclusion in the S&P 500 index. The stock closed at 135.01 during regular trading hours, reflecting a modest increase, and surged to 149.70 after hours. This inclusion will officially take effect before the market opens on July 9, 2025, replacing Juniper Networks. Datadog's current market capitalization stands at 46.63 billion, with a price-to-earnings ratio of 267.48. The company's first-quarter revenue for 2025 reached 761.55 million, marking a 25% year-over-year increase. Additionally, Wedbush raised Datadog's price target to 170, further enhancing the positive sentiment surrounding the stock.

CDNS | +4.9% | +4.3B
Cadence Design Systems Inc | Application Software
Cadence Design Systems Inc shares have increased significantly in premarket trading, following the easing of U.S. export restrictions on semiconductor design software to China. This development, confirmed by the Bureau of Industry and Security, is expected to enhance the operational landscape for companies in the semiconductor sector, including Cadence and Synopsys. On social media, discussions highlighted the rise in Cadence shares, which were noted at 310.95, alongside Synopsys at 523.11. The sentiment surrounding this news has been positive, with users expressing excitement about the potential for increased business with Chinese clients. Additionally, Datadog Inc rose notably due to its upcoming inclusion in the S&P 500 index, which may correlate with movements in Cadence's stock price.

SNPS | +4.0% | +3.4B
Synopsys Inc | Application Software
Synopsys Inc (SNPS) shares rose significantly in premarket trading, following the U.S. government's decision to lift export restrictions on chip design software to China. The Bureau of Industry and Security from the U.S. Department of Commerce informed Synopsys that these restrictions, imposed on May 29, have been rescinded immediately, enabling the company to restore access to previously restricted markets. This development has also positively influenced other companies in the sector, such as Cadence Design Systems, which experienced a notable increase in its share price. Reports indicate that Synopsys shares increased by 5.7% during this session. Additionally, Datadog Inc (DDOG) saw a rise of 9% after its announcement of inclusion in the S&P 500 index, which may be correlated with the market movements of Synopsys.

BABA | -2.4% | -51.0B
Alibaba Group Holding Ltd | Broadline Retail
Alibaba Group Holding Ltd has announced plans to raise approximately HK$12 billion (about 1.53 billion) through an offering of zero-coupon exchangeable bonds, aimed at financing investments in cloud infrastructure and international commerce operations. The bonds, linked to Alibaba Health Technology, will mature on July 9, 2032. This follows a significant dual-currency bond issuance in November 2024, which was the largest of its kind in the Asia-Pacific region that year. Additionally, the company plans to invest over $60 million in the next fiscal year to enhance its partner ecosystem and boost AI innovation. Recent social media discussions noted that Alibaba's stock has broken below a significant support range and is approaching a key support test after previously bouncing back from this level. Furthermore, Alibaba's Cainiao is trialing smart light strip technology at five self-pickup points in Hong Kong to improve parcel collection efficiency.

HOOD | -2.4% | -2.0B
Robinhood Markets Inc | Investment Banking & Brokerage
Robinhood Markets Inc. faced scrutiny after announcing a token giveaway for OpenAI and SpaceX, which OpenAI clarified does not constitute an equity partnership with Robinhood. OpenAI emphasized that the tokens do not represent its equity and any transfer of equity requires prior approval, which was not granted. Following this clarification, Robinhood's shares declined in after-hours trading, reflecting concerns over the implications of this controversy. Earlier, Robinhood's stock had surged to around $100 due to speculation regarding its potential inclusion in the S&P 500 index, following Hewlett Packard Enterprise's acquisition of Juniper Networks. This surge was accompanied by discussions on social media regarding the company's recent initiatives, including the launch of tokenized shares, although skepticism arose about the legitimacy of these offerings.

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