The NZD is the strongest of the major currencies, while the EUR is the weakest as the North American session begins.
The USD is mostly lower for the 2nd consecutive day. Today, however, yields in the US are a bit lower and helping the greenback's decline. Yesterday, yields moved higher, while the USD still moved lower. Stocks yesterday (at least the S&P and Nasdaq that is) rose as well, which was something different. Today, stocks are higher with the lower yields helping (or so it seems). Are stocks being influenced by a squeeze in Nvidia ahead of their earnings on Wednesday? Maybe. Yesterday Nvidia shares soared by 8.47%. Today, in premarket trading, their shares are up an additional 1.75%.
Along the AI lines, Softbank's subsidiary, Arm, has initiated the process for a Nasdaq listing. The IPO could be the largest in the U.S. in almost two years. Softbank recently outlined the IPO timeline. Arm's processor designs are used by tech giants like Apple and Nvidia. The company earns royalties for each chip its clients sell. Arm's filing revealed that nearly 70% of the global population uses its products, with its technology making up almost 49% of a market valued at about $202.5 billion last year. The number of shares and their valuation for the IPO remain unspecified. SoftBank recently acquired the remaining 25% of Arm for about $64 billion from a Saudi investment fund. If valued at this, Arm would surpass Rivian's 2021 IPO, though the acquisition price doesn't necessarily predict the IPO's trading price. The roadshow to investors is expected in the first week of September with the IPO shortly thereafter. Sounds like a winner to me.
Remaining on the stock market, in an effort to secure the green light from U.K. competition regulators for the most significant merger in the video-gaming sector, Microsoft has presented an updated proposal for its union with Activision Blizzard, the company behind "Call of Duty.". The plan calls for the sale sell its cloud streaming rights outside the European Economic Area to French rival Ubisoft. Microsoft shares are trading up 1.2% in premarket trading.
Retail earnings announced this morning came in mixed:
Dick's Sporting Goods Inc (DKS) Q2 2023 (USD)
- Adj. EPS: MISSED (2.82 vs. exp. 3.81), Revenue: MISSED (3.22bln vs. exp. 3.23bln)
Macy's Inc (M) Q2 2023 (USD)
- EPS: BEAT (0.26 vs. exp. -0.44), Revenue: BEAT (5.13bln vs. exp. 4.31bln)
Medtronic PLC (MDT) Q2 2023 (USD)
- Adj. EPS: BEAT (1.20 vs. exp. 1.11), Revenue: BEAT (7.70bln vs. exp. 7.57bln)
Coty Inc (COTY) Q2 2023 (USD)
- Adj. EPS: MISSED (0.01 vs. exp. 0.02), Revenue: BEAT (1.35bln vs. exp. 1.31bln)
Lowe's Companies Inc (LOW) Q2 2023 (USD)
- EPS: BEAT (4.56 vs. exp. 4.49), Revenue: MISSED (24.956bln vs. exp. 24.99bln)
It is Tuesday which means we are one day closer to Fed chair Powell's speech at the Jackson Hole Summit on Friday at 10:05 AM ET. Traders are anticipating Fed Chair Jerome Powell will deliver remarks on the central bank's policy going forward and his specific thoughts on inflation. Recall from a year ago his famous 8-minute speech outlined the Feds tightening plan to get rates to restrictive. The Fed funds target rate was at 2.5% at the time. He was true to his word, as the Fed has pushed the target rate to restrictive territory at 5.5% since that speech.
Fed's Barkin is currently speaking. Later today, Fed's Goolbee (dove) is speaking (at 2:30 PM ET). Fed's Bowman is also on the schedule (at 2:32 PM ET). Existing home sales (estimate 4.15M versus 4.16M last month) will be released at 10 AM along with the Richmond Fed manufacturing index (estimate -10 versus -9 last month).
Looking toward tomorrow, New Zealand retail sales will be released at 6:45 PM ET, and Australia's manufacturing and services of flash PMI data will be released at 7 PM. Other countries' flash PMI data will be released in Europe and the UK as well.
A snapshot of the markets as the NA session gets underway shows:
- Crude oil is trading down $0.42 or -0.52% at $79.69
- Spot gold is trading up $8 or 0.43% at $1902.30 as it reacts to lower yields and the lower dollar
- Spot silver is trading up $0.10 or 0.43% $23.39
- Bitcoin is trading at $26,024. At this time on yesterday morning the price was at $26,024.
In the US premarket for US stocks, major indices are trading higher after the S&P and NASDAQ both broke there 4 -day losing streak yesterday. The Dow industrial average moved lower yesterday.
The snapshot of the major indices shows:
- Dow Industrial Average futures are implying a gain of 108.31 points after yesterday's -36.97 point decline
- S&P index futures are implying a gain 24.75 points after a gain of 30.04 points yesterday
- NASDAQ futures are implying a gain of 113.5 points after a gain of 206.81 points yesterday
In the European equity markets, the major indices are trading higher
- German DAX, up 1.17%
- France's CAC, up 1.25%
- UK's FTSE 100, up 0.70%
- Spain's Ibex, up 1.12%
- Italy's FTSE MIB, up 1.13% (delayed)
In the Asian Pacific today, equity markets rebounded higher snapping some negativity seen more recently
- Japan’s Nikkei 225, rose 0.92%
- China’s Shanghai Composite, rose 0.88%
- Hong Kong’s Hang Seng, rose 0.95%
- Australia’s S&P/ASX 200, rose 0.09%
In the US debt market, yields are mostly modestly lower. Yesterday, 10 year yields rose to near 16 year highs. 30 year yields traded to the highest level since 2011.
- 2-year yield, 5.000% up 0.7 basis points
- 5-year yield, 4.448%, -1.1 basis points
- 10-year yield, 4.316%, -2.6 basis points
- 30-year yield, 4.423%, -3.2 basis points
In the European debt market, benchmark 10-year yields are trading lower as well:
