- Japanese Stocks, Bonds Fall Ahead of BOJ Decision: Markets Wrap
(Bloomberg) — Japanese stocks dropped and government bond yields rose ahead of a potentially market-moving decision from the nation’s central bank, the highlight of an event-packed day in Asia. Equity benchmarks dropped more than 1% in Japan. Those in South Korea climbed, buoyed by gains in Samsung Electronics Co. after the chipmaker reported its fastest pace of profit. - S&P 500, Nasdaq close lower Tuesday as investors dump tech before big earnings reports
The S&P 500 fell Tuesday, dragged lower by declines in mega cap tech stocks, as investors braced for quarterly reports from names in that cohort. Traders also set their eyes on Washington as the Federal Reserve began its latest policy meeting. The broad market index lost 0.5% and ended the day at 5,436.44, while the Nasdaq Composite tumbled 1.28% to close at 17,147.42. The Dow Jones Industrial Average climbed 203.40 points, or 0.5%, to 40,743.33. Nvidia shares pulled back by 7% while Microsoft shed about 0.9%. Tech-related giants Amazon, Netflix and Meta Platforms also declined. - Fed to Hold Rates and Signal September Cut: Decision Day Guide
(Bloomberg) — Federal Reserve officials are likely to move closer to lowering interest rates from a two-decade high this week by signaling a potential rate cut in September, though they may stop short of providing details beyond that. The US central bank’s Federal Open Market Committee will keep its benchmark rate in a range of 5.25% to 5.5%. - Bank of Japan raises benchmark interest rate, outlines roadmap for trimming bond buying program
Japan’s central bank has raised its benchmark interest rate to “around 0.25%” from its previous range of 0% to 0.1%.
This would mark the highest interest rates since October 2008, when it was set at 0.3%. It also said that it will reduce the monthly outright purchases of Japanese government bonds to about 3 trillion yen ($19.64 billion) per month in the January to March 2026 quarter. - Yen Holds onto Big Monthly Gain, Japanese Yields Rise Before BOJ
(Bloomberg) — The yen held onto its biggest monthly gain in a year-and-a-half and Japanese bond yields climbed as traders increased bets that the central bank may raise interest rates on Wednesday. The currency has surged about 5% versus the dollar in July amid expectations that the gap between the Bank of Japan’s policy rate and the Federal Reserve’s benchmark is poised.
6. Tech Stocks Hit as Microsoft Down 6% in Late Hours: Markets Wrap
(Bloomberg) — The world’s largest technology companies extended losses in late hours as Microsoft Corp.’s results fueled concern the artificial-intelligence frenzy that has powered the bull market might have gone too far. A $280 billion exchange-traded fund tracking the Nasdaq 100 (ticker: QQQ) got hit as the software maker plunged 6% amid slower cloud growth.
7.Gold Steady as Traders Count Down to Vital Central Bank Meetings
(Bloomberg) — Gold held an advance before a slew of meetings from the Federal Reserve and other leading central banks, which may see US policymakers signal a move toward cutting interest rates. Bullion was steady just below $2,410 an ounce after jumping by more than 1% on Tuesday on haven bids as tensions flared in the Middle East, with Israel carrying out a retaliatory airstrike.
8. Goldman to Sell SRT Tied to $2 Billion of Private Fund Loans
(Bloomberg) — Goldman Sachs Group Inc. is selling a bond that will help it offload risk from a portfolio of about $2 billion of loans, according to people with knowledge of the matter. The bank is selling notes that are tied to a pool of loans to private market funds, the people said. If enough of the loans default, investors in the bonds will lose principal.
9. Oil claws back some losses after Israel retaliates against Hezbollah
Oil futures clawed back some losses on Wednesday, recovering from 7-week lows as geopolitical tensions rose after Israel retaliated against an attack by Hezbollah, although prices remained under pressure from concerns about demand in China. Brent crude futures climbed 39 cents, or 0.5%, to $79.02 a barrel by 0020 GMT ahead of expiry on Wednesday, while the more active October contract was at $78.54, up 47 cents.
10.Ackman’s US Closed-End Fund Eyes $2 Billion in IPO Next Week
(Bloomberg) — Bill Ackman’s planned initial public offering for a US closed-end fund is expected to bring in $2 billion, less than 1/10th the target the billionaire hedge-fund manager suggested the sale could raise earlier this month. Pershing Square USA Ltd.’s IPO is expected to price on August 5 after the close, according to a term sheet seen by Bloomberg News.
11. US-Japan Alliance Robust Regardless of Election, Envoy Says
(Bloomberg) — Deepening security integration between the US and Japan will help ensure ties between the allies remain strong regardless of political changes, Washington’s top envoy to Japan said. Rahm Emanuel, the US ambassador to Japan, highlighted announcements on Sunday of plans to create a command-and-control centre for the US military in Japan.
12. Samsung Profit Surges Most in Years After Chip Arm Recovery
(Bloomberg) — Samsung Electronics Co. reported its fastest pace of net income growth since 2010 after artificial intelligence boom lifted earnings at its semiconductor division. The world’s largest maker of memory and smartphones posted a six-fold surge in net income to 9.64 trillion won ($6.96 billion) in the June quarter, versus the average analysts’ projection for 7.97.
13. Microsoft Says Azure Outage Began as DDoS Cyberattack
(Bloomberg) — Microsoft Corp. said an outage of Azure cloud applications was triggered by a distributed- denial-of-service cyberattack. The DDoS attack began early Tuesday and an error in Microsoft’s automated protection mechanisms worsened the impact rather than mitigating it, the company said in a status update. Customers were affected in multiple regions, including services running on Azure.
14. Israel Strikes Beirut in Muted Response to Deadly Golan Attack
(Bloomberg) — Israel said it killed a senior Hezbollah commander with an airstrike on Beirut, in what
appeared to be a limited response to an attack in the Golan Heights that left 12 young people dead over the weekend. The assault by fighter jets on Lebanon’s capital happened shortly before 8 p.m. Tuesday and was aimed at Fuad Shukr, a senior adviser to Hezbollah leader Hassan Nasrallah.
15. Big Take: Harris Erases Trump Swing-State Lead in 2024 Dead Heat
(Bloomberg) — Kamala Harris has wiped out Donald Trump’s lead across seven battleground states, as
the vice president rides a wave of enthusiasm among young, Black and Hispanic voters, according to
the latest Bloomberg News/Morning Consult poll. Harris was backed by 48% of voters to 47% for
Trump a statistical dead heat in the swing states that will likely decide.
16. Harris Pledges to Sign Border Bill as VP Eyes Georgia Voters
(Bloomberg) — Vice President Kamala Harris pledged to find bipartisan agreement on the US-Mexico
border at a rally in Georgia, seeking to blunt a line of attack from her rival Donald Trump and address
one of her campaign’s biggest political liabilities. “As president, I will bring back the border security
bill that Donald Trump killed and I will sign it into law and show.
17.Trump Attacks Harris, Jewish Husband as Race Becomes 2024 Issue
(Bloomberg) — Republican nominee Donald Trump attacked Vice President Kamala Harris and her
Jewish husband, Doug Emhoff, invoking an antisemitic trope that Jewish Americans share a dual
loyalty with Israel. Trump said in a Tuesday interview with WABC radio in New York that Harris
appeared annoyed during a meeting last week with Israeli Prime Minister Benjamin Netanyahu.
18. ‘Hot Money’ Deposits Get Tougher Treatment in New FDIC Plan
(Bloomberg) — The Federal Deposit Insurance Corp. unveiled a measure to strengthen regulation of US
banks’ brokered deposits, the government’s latest response to last year’s industry turmoil. Known as
hot money, the funds collected by brokers surged past $1 trillion in 2023 a year that saw three of the
four largest bank failures in US history.
19. Specialty Building Products Is Said to Seek $750 Million in IPO
(Bloomberg) — Jordan Co.-backed Specialty Building Products is seeking to raise as much as $750
million in an initial public offering and has filed confidentially with the US Securities and Exchange
Commission, according to people familiar with the matter.
20. HSBC reports narrow first-half profit decline, beats expectations
Europe’s largest lender HSBC posted a narrow decline in pretax profit in the first half of the year, but beat expectations on the back of a high-interest rate environment. The bank posted pretax profit in the six months to June of $21.56 billion, down from $21.66 billion in the same period of last year. The first-half figure nevertheless came in well above the $20.5 billion average of broker estimates compiled by HSBC, according to Reuters.
21. A slowdown in Latin America, the Caribbean and the US pushed British distiller Diageo Plc to its first annual sales decline since the pandemic.
Shares in the maker of Johnnie Walker whisky fell 5.1% after net sales fell 1.4% to $20.3 billion in the year ending June — the first annual drop since 2020. Consumers have chosen cheaper options in markets such as Latin America and have been drinking stocks of spirits built up in the Covid-era boom, affecting Diageo’s sales. The company said the consumer environment remains challenging, with the drag on margins continuing into 2025. Chief Executive Officer Debra Crew said drinkers in the US have reined in spending. “You do see persistent inflation that is really weighing on consumers and their wallets”.
22. Standard Chartered expanded its multi-billion dollar share buyback program as the bank reported a rise in pretax profits driven by its wealth business.
The lender said that it will repurchase a record $1.5 billion as it looks to return at least $5 billion to shareholders by 2026. Shares of the bank rose 5.9%. It reported second quarter pretax profit of $1.83 billion, beating analyst estimates of $1.6 billion. The lender raised its outlook for income growth, and is now expecting operating income to rise more than 7% in 2024. “We are pursuing the strategy, it’s working quite well, earnings are strong,” Chief Executive Officer Bill Winters said. “Especially given where our stock price is, which is not as high as we think it should be, we will buy back as many shares as we can with surplus capital.
23. Merck & Co.’s shares tumbled 9.8% as light sales of its Gardasil HPV vaccine in China overshadowed quarterly profit and sales that beat estimates.
The drugmaker also lowered its 2024 profit outlook on acquisition costs. Merck has spent billions to find new sources of growth as Keytruda, approved for many types of cancer, will face pricing pressure later this decade. Last year, the company spent nearly $11 billion on Prometheus Biosciences Inc., maker of treatments for autoimmune disorders, and signed a deal with Daiichi Sankyo Co. worth as much as $22 billion to collaborate on novel cancer medicines. Gardasil, a widely used vaccine to prevent the cancer-linked human papillomavirus, is a key product for Merck’s future. The company said sales of the shot in China could fall below expectations this year due to an issue with a third-party distributor.
24. PayPal shares rose 8.6% after the payment’s technology company boosted its forecast for 2024 profit. Its second-quarter results also exceeded expectations.
SECOND QUARTER RESULTS: Total payment volume $416.81 billion, +11% y/y, estimate $417.27 billion. Net revenue $7.89 billion, +8.2% y/y, estimate $7.82 billion. Transaction revenue $7.15 billion, +9.1% y/y, estimate $7.08 billion. Transaction margin dollars $3.61 billion, +7.8% y/y. Total operating expenses $6.56 billion, +6.6% y/y, estimate $6.71 billion. Adjusted operating income $1.46 billion, estimate $1.31 billion. Adjusted EPS $1.19, estimate $1.00. Adjusted free cash flow $1.14 billion, estimate $1.06 billion. Active customer accounts 429 million, -0.5% y/y, estimate 427.47 million. Payment transactions 6.58 billion, +8.3% y/y, estimate 6.76 billion. THIRD QUARTER FORECAST: Sees 3Q adj EPS up high single-digit. Sees 3Q revenue up mid-single-digit.
25. CrowdStrike shares fell 9.7% after CNBC reported that Delta Air Lines is hiring attorney David Boies to seek potential damages from the cybersecurity company and Microsoft following the widespread outage earlier this month.
Needham analyst Alex Henderson says “not surprised by news Delta is looking to the courts for compensation”. While the sensor update debacle will likely pass, it will take time and come at a cost. “The damage to Crowd’s reputation will fade over the next year, as will the impact to its market share”. Buy, PT cut to $375 from from $425. Bloomberg Intelligence analyst Mandeep Singh expects CrowdStrike to receive more claims like Delta Air’s. CrowdStrike “is likely to have to pay more in damages than Microsoft, whose operating system crashed because of CrowdStrike’s software configuration changes”.
26. Microsoft shares fell 2.7% after-hours, paring earlier losses of as much as 9.1%, after the company’s Azure cloud-computing service posted a slowdown in quarterly growth, disappointing investors anxious to see a payoff from huge investments in artificial intelligence products.
Revenue from Azure, Microsoft’s main growth engine in recent years, rose 29% in the fiscal fourth quarter, compared with a 31% jump in the previous period. About 8 percentage points of the increase in the recent period was attributable to AI, up from 7 percentage points in the prior quarter. “It was really about the cloud services number — it needed to just be a little higher,” Doug Clinton, a managing partner at Deepwater Asset Management, said. Still, the accelerated contribution from AI confirms business momentum with that emerging technology, wrote Raimo Lenschow, an analyst at Barclays.
27. Starbucks shares rose 3.6% after-hours, after it delivered results that were in line with expectations, assuaging investors who had been bracing for another meltdown after being blindsided by the previous quarter’s slump.
Sales at coffee shops open at least a year fell 3% in the company’s fiscal third quarter, the second straight drop. While the number of transactions fell, US diners are spending more each visit, helping to prop up revenue. The company reaffirmed its guidance for comparable-store sales this year in a range of flat to down low-single digits. “The decline in same-store sales and the decline in traffic were pretty much in line with what people were expecting,” said Brian Yarbrough, an analyst with Edward Jones.
An increase in customers’ average order value in North America helped stem a steeper sales decline. The chain has been enticing diners to its app with exclusive deals, saying on Tuesday that the number of US loyalty members active over 90 days had risen 7% from a year ago.
28. AMD shares soared 7.6% in after-hours trading Tuesday, after the semiconductor maker reported adjusted earnings per share and revenue in the second quarter that beat analyst estimates. The company also forecast revenue for the third quarter of $6.4 billion to $7 billion, the midpoint of which is higher than estimates.
Peers NVDA +5.1%, AVGO +3.3% after hours. SECOND QUARTER RESULTS: Adjusted EPS 69c vs. 58c y/y, estimate 68c. Revenue $5.84 billion, +8.9% y/y, estimate $5.73 billion. Data center revenue $2.83 billion vs. $1.32 billion y/y, estimate $2.75 billion. Adjusted gross margin 53% vs. 50% y/y, estimate 53%. Capital expenditure $154 million, +23% y/y, estimate $127.1 million. Adjusted operating income $1.26 billion, +18% y/y, estimate $1.25 billion. Adjusted operating margin 22% vs. 20% y/y, estimate 21.8%.
29. Iran says Hamas leader Ismail Haniyeh was assassinated in Tehran
Hamas leader Ismail Haniyeh was assassinated in Tehran, Iran’s paramilitary Revolutionary Guard said early Wednesday, and Hamas blamed Israel for the attack. Israel has vowed to kill Haniyeh and other leaders of Hamas over the group’s Oct. 7 attack on Israel that killed 1,200 people and saw some 250 others taken hostage.
Menu