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Monday, August 26

Some of the largest macro moves in the market today include: Oil (WTI) +2.5%. Oil (Brent) +2.5%. Some of the largest moves among US mega-cap stocks include: Exxon Mobil Corp (XOM) +1.1%. 

Recent economic data from the United States showed a significant surge in new orders for durable goods, rising by 9.9% in July 2024. This increase follows a revised decline of 6.9% in June and exceeds market expectations significantly, suggesting that concerns over manufacturing activity may be overstated.

In Germany, business morale has weakened further as indicated by the Ifo Business Climate indicator dropping to its lowest level since February at 86.6 points for August 2024. Both current conditions and future expectations have deteriorated more than anticipated, reflecting ongoing challenges within Europe's largest economy.

Oil prices are experiencing notable gains due to geopolitical tensions involving Libya's eastern-based government halting oil production amid internal conflicts with Tripoli’s central bank leadership attempts; this development is contributing to supply concerns globally.

USO [+2.6%]
The United States Oil Fund LP has increased by 2.7%, coinciding with Libya's Eastern government halting all oil production and exports due to internal political conflicts. This decision has raised concerns about potential disruptions in global oil supply. Additionally, tensions in the Middle East, particularly clashes between Hezbollah and Israel, have contributed to rising crude oil prices. Oil prices have surged by 2.6% since Friday, reflecting these geopolitical developments. Concurrently, gold prices have risen as the Federal Reserve signaled imminent rate cuts, which weakened the U.S. dollar and increased demand for safe-haven assets. These factors appear to be directly impacting Brent crude pricing, particularly regarding XBR/USD movements.

Invesco Currencyshares Japanese Yen Trust (FXY) [-0.7%]
Federal Reserve Chair Jerome Powell has signaled that the central bank may initiate interest rate cuts at its next meeting in September. This dovish stance has resulted in a notable weakening of the U.S. dollar against major currencies, with the USD/JPY pair declining significantly. Concurrently, Bank of Japan Governor Kazuo Ueda has commented on the possibility of future rate hikes if inflation remains stable, further influencing currency dynamics between the two nations. As a result, the Invesco Currencyshares Japanese Yen Trust (FXY) has experienced a price movement of +0.1% since Friday.

PDD |-16.5%|-107.2B
PDD Holdings Inc. reported second-quarter earnings that included adjusted EPS of 3.20, exceeding the consensus estimate of 2.73. However, total revenue reached 97.06 billion yuan (approximately 13.36 billion), falling short of the anticipated 100 billion yuan. This shortfall, attributed to weak consumer spending in China, has resulted in a significant decline in PDD's share price, which dropped nearly 14% in premarket trading following the earnings release. Additionally, transaction services revenue missed forecasts, and executives expressed concerns regarding future revenue growth amid intensified competition and external economic challenges. The stock experienced a notable decline of approximately 17.2% since Friday, reflecting broader market sentiment and pressures on profitability.

XPEV | +4.3% | +591.2M
Xpeng Inc. has experienced a notable price increase following the acquisition of 1,000,000 Class A ordinary shares and 1,419,922 American depositary shares by co-founder and controlling shareholder, Mr. Xiaopeng He. This purchase, completed between August 21 and August 23, 2024, at average prices of HK$27.13 and US$7.02 respectively, elevates his total stake to approximately 18.8% of the company's issued share capital. The board views this move as a sign of Mr. He's confidence in the company’s future. Concurrently, Xpeng has launched the right-hand drive version of its G6 model in Thailand, marking its entry into new markets. This expansion coincides with the anticipated launch of the MONA 03 model, further energizing market sentiment around the stock.

BA |-1.0%|-1.0B
Boeing Co is currently facing significant challenges as NASA has opted for SpaceX to return astronauts Butch Wilmore and Sunita Williams from the International Space Station in February 2025. This decision follows ongoing technical issues with Boeing's Starliner, which has encountered multiple malfunctions and incurred costs exceeding $1.4 billion. NASA cited safety concerns, leading to an uncrewed return of the Starliner, now scheduled for early September. The astronauts' stay, initially planned for eight days, has been extended to approximately eight months due to these complications. This situation reflects a critical setback for Boeing's space endeavors and raises concerns about its reputation in the aerospace sector.

CNQ |+2.5% | +2.0B
Canadian Natural Resources Ltd. has announced a $350 million investment in a tailings improvement project at its Horizon mine, aiming to enhance hydrocarbon recovery from treated tailings. This initiative is part of efforts to increase synthetic crude oil production capacity to nearly 280,000 barrels per day by the end of 2027. The project is expected to recover at least half of the hydrocarbons lost to tailings, adding approximately 6,300 barrels per day, while potentially saving $700 million in future reclamation costs. Pending regulatory approval, the facility is set to become operational in the third quarter of 2027, with a request for an increase in Horizon's production limit to 277,300 barrels per day. Concurrently, CNQ's stock has moved up 2.5%, aligning with a 4.53% increase in ProShares Ultra Bloomberg Crude Oil and a 2.46% rise in Brent crude oil prices.

BABA |-3.2% | -51.7B
Alibaba shares are trading lower, reflecting a decline influenced by the disappointing Q2 sales results from PDD Holdings. PDD's stock dropped significantly after reporting revenue that fell short of consensus estimates, despite an impressive year-on-year growth. This underperformance has raised concerns regarding future challenges and intensified competition, which were echoed by PDD's executives. In addition, Alibaba is facing scrutiny as comparisons with competitors like Pinduoduo and JD.com reveal disappointing performance metrics. While some analysts see potential for a stock price rally, overall sentiment remains mixed amid competitive pressures and technical trading opportunities.

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