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Wednesday, July 17

Some of the largest macro moves in the market today include: Nasdaq 100 Index (US) -1.5%. S&P 500 Index (US) -1.0%. USD/CNH -0.3%.

The US stock market is experiencing significant declines, particularly in the technology sector. This downturn follows disappointing earnings guidance from Dutch semiconductor firm ASML and concerns over potential harsher restrictions on Chinese trade and semiconductor technology by the Biden administration. Major indices like Nasdaq 100 (-1.5%) and S&P 500 (-1%) are down, with notable drops among mega-cap stocks such as NVIDIA Corp (-3.9%), Broadcom Inc (-3.5%), and Eli Lilly & Co (-3.2%).

In economic data releases, housing starts in the US rose by 3% to an annualized rate of 1,314,000 for June 2024 while building permits increased by a higher-than-expected margin of 3.4%. Additionally, UK inflation held steady at an annual rate of 2%, defying expectations for a slight decrease which has influenced investor sentiment regarding future Bank of England policy decisions.

On currency movements today: USD/CNH fell -0.266%, reflecting broader dollar weakness amid speculation about Federal Reserve interest rate cuts later this year due to cooling inflation trends indicated by recent mortgage application surges (+15%). The Japanese yen surged against major currencies following intervention hints from Japan's top currency diplomat amidst ongoing global geopolitical tensions impacting markets broadly.

SPY [-1.0%]
SPDR S&P 500 ETF Trust experienced a -1.0% price change since the previous close, potentially influenced by concerns over stricter trading curbs on China and news related to Trump's tariffs affecting tech shares. Top contributors like NVDA, AAPL, MSFT dropped notably in performance while AVGO saw new buy initiation contributing to recent stock movement alongside LLY surging after selling future royalty payments for financial flexibility. The broader market also declined with the S&P 500 Index decreasing by -0.9%, reflecting uncertainties around possible Fed rate adjustments based on inflation data and upcoming economic indicators impacting various sectors including housing starts and industrial production figures influencing today's index movement further intensified by slight decrease in US Treasury Bond rates correlating with macroeconomic conditions.

IWM [-0.9%]
The iShares Russell 2000 ETF experienced a -0.9% price change since the previous close, coinciding with Druckenmiller's recent small-cap purchases before the ongoing Great Rotation as per analysts' observations. Among its holdings, notable decreases were seen in SMCI and MSTR contributing negatively to performance, while AMKR was downgraded to Sell leading to a significant movement downwards; SAVA faced challenges after CEO resignation amid fraud allegations related to an Alzheimer's treatment. Market experts foresee potential strength for small caps like IWM amidst geopolitical tensions impacting chip stocks globally and concerns over export restrictions on critical equipment linked with China-China trade relations aligning with today’s observed market pressure reflecting global equity movements driven by events including anticipated Fed rate-cuts due soon following indications of disinflation progress according to economic data updates from New York Fed Bank President John Williams.

TSM |-5.9%|-265.9B
Taiwan Semiconductor Manufacturing Co Ltd (TSM) experienced a notable decline in share price, dropping by 6.2% since Tuesday's close due to comments made by Donald Trump suggesting Taiwan should pay the U.S. for defense costs. This led to concerns about TSMC's influence on global chip manufacturing and its impact on American chip businesses amidst ongoing tensions with China over hypothetical scenarios involving Taiwan under different geopolitical circumstances earlier this year as highlighted through war game simulations emphasizing local self-strengthening efforts amid increasing threats from China. Additionally, market interest was stirred following rumors of potential collaboration opportunities between TSMC and Nvidia related to advanced production technology utilization in an upcoming graphics card model scheduled for release using TSMC’s processes based in China.

NVDA | -3.8% | -113.6B
NVIDIA Corp (NVDA) experienced a -3.8% price movement following global chip stock declines amid reports of potential U.S. export restrictions to China, coupled with negative semiconductor sentiment from former President Trump's Taiwan comments. The broader industry dynamics were impacted by geopolitical tensions and trade implications, particularly affecting key players like ASML due to Chinese market exposure despite strong earnings performance adding complexity amidst evolving regulatory landscapes influencing supply chains and overall market sentiments in the sector ahead of NVDA's fiscal second quarter financial results announcement on July 30th after the close.

RHHBY |+7.4%|+2.0B
Roche Holding AG's stock price surged by 6.5% in the pre-market session, driven by positive Phase I results for CT-996, an oral GLP-1 receptor agonist showing significant weight loss benefits within four weeks for participants with obesity but without type 2 diabetes. This promising data positions Roche as a key player in the competitive weight-loss medicine market and supports plans to advance CT-996 into phase 2 trials soon. The company also highlighted encouraging outcomes from another newly-acquired obesity drug candidate study, emphasizing its potential impact on addressing global obesity prevalence going forward.

LLY |-3.4%|-29.3B
Eli Lilly and Co experienced a -3.5% price movement pre-market on Wednesday following Aclaris Therapeutics' sale of future royalty payments from Eli Lilly for Olumiant to OMERS, aiming to bolster financial flexibility amid pursuit of value-creating opportunities as stated by Neal Walker, interim president & CEO. The transaction included an upfront payment of $26.5 million with potential additional earnings based on 2024 sales milestones, coinciding with the market reaction where Aclaris shares surged over 10% in after-hours trading sessions post-news release about the deal.

ESLOY |-4.4% | -2.1B
EssilorLuxottica (ESLOY) has recently acquired Supreme from VF Corp. for $1.5B in cash, with the deal expected to close by the end of CY2024 pending regulatory approvals as indicated by company statements released today. This acquisition aims to connect with new audiences and enhance innovation capabilities within EssilorLuxottica's portfolio, potentially affecting VF's earnings per share negatively in fiscal 2025 according to reports from J.P. Morgan and Latham & Watkins who advised on this transaction hours ago.

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