Overnight US Stocks | Dow hits historic high, chip stocks plummet, Nvidia falls 6.62%

According to the Wise Finance APP, on Wednesday, the three major indices showed mixed movements. The Dow hit a historical high, while the Nasdaq plummeted by 2.77%, with the Nasdaq 100 falling by 2.94%, marking the largest single-day decline since December 2022. Goldman Sachs warned that the S&P 500 index is starting to adjust and advised investors not to bottom fish. The Federal Reserve Beige Book stated that the economy saw slight growth and a cooling of inflation.

[US Stocks] At the close, the Dow rose by 243.73 points, up 0.60%, to 41,198.21 points; the Nasdaq fell by 512.42 points, down 2.77%, to 17,996.92 points; the S&P 500 index dropped by 78.93 points, down 1.39%, to 5,588.27 points. Chip stocks saw significant declines, with NVIDIA (NVDA.US) falling by 6.62%, Tesla (TSLA.US) by 3.14%, Meta Platforms (META.US) by 5.68%, and Apple (AAPL.US) by 2.53%.

[European Stocks] Major European indices saw mixed movements, with Germany's DAX30 index falling by 0.44%, the UK's FTSE 100 index rising by 0.28%, France's CAC40 index falling by 0.12%, and the Euro Stoxx 50 index dropping by 1.14%.

[Asia-Pacific Stock Markets] The Nikkei 225 index fell by 0.43%, Indonesia's Jakarta Composite Index fell by 0.02%, and Vietnam's VN30 index rose by 0.16%.

[Gold] COMEX August gold futures fell by 0.43% to $2,457.3 per ounce at the close, while COMEX September silver futures fell by 3.4% to $30.39 per ounce.

[Cryptocurrencies] Bitcoin fell by over 1% to $64,329.5 per coin, while Ethereum fell by over 1% to $3,412.56 per coin.

[Crude Oil] NYMEX August WTI crude oil futures prices rose by $2.09, up over 2.52%, to close at $82.85 per barrel, moving away from the lowest closing level since June 17.

[Metals] Most London metals fell, with LME copper falling by $28 to $9,635 per tonne. LME aluminum fell by $4 to $2,402 per tonne. LME zinc fell by nearly 1.32% to $2,848 per tonne. LME nickel fell by $137 to $16,457 per tonne. LME tin fell by $221 to $32,950 per tonne, while LME lead rose by $6 to $2,190 per tonne.

[Macro News]

Federal Reserve Beige Book: U.S. economy sees slight growth, inflation cools. The Federal Reserve Beige Book survey shows that the U.S. economy saw modest growth in the third quarter, with activity in some districts remaining flat or declining. According to the report released on Wednesday, employment numbers also saw only slight increases. Labor mobility decreased, and several district contacts expect to be more selective in hiring, not filling all vacant positions The latest issue of the Beige Book was compiled by the Federal Reserve Bank of Richmond based on information collected by July 8th. Most districts reported modest or moderate wage growth, but overall price increases were moderate. Consumer spending remained almost unchanged, with nearly every district mentioning retailers offering discounts or consumers only purchasing essential items.

Fed Governor Wall: Rate cut timing "getting closer". Fed Governor Wall stated on Wednesday that the time for a rate cut by the Fed is "getting closer", but the uncertainty of economic trends makes it unclear when rates might be lowered. "I believe the current data is consistent with achieving a 'soft landing', and I will be looking for data in the coming months to support this view," Wall said. He added, "While I don't think we have reached the ultimate goal yet, I do believe that we are getting closer to a time when there is a reason to lower policy rates." Wall pointed out that economic growth is currently moving forward at a "more moderate pace", the job market is more balanced, and inflation has also eased. He said the "most optimistic" scenario is the possibility of a significant but not high continuous decline in inflation pressure, in which case "I can imagine a rate cut in the near future." However, Wall said in a more likely scenario, the decline in inflation would be more uneven, raising doubts about whether it can sustainably return to the 2% target. "In this scenario, the uncertainty about a rate cut in the near term is greater," he said. The least likely but still possible scenario is a rise in inflation, which he did not link to the monetary policy path.

US single-family housing starts in June decline. US single-family housing starts further declined in June, but may rebound in the coming months as optimism grows about a Fed rate cut in September. Data from the US Department of Commerce shows that single-family housing starts in June fell by 2.2% month-on-month, seasonally adjusted to an annual rate of 980,000 units. Single-family housing starts account for the majority of housing construction. Single-family building permits for future construction fell by 2.3% to 934,000 units. Meanwhile, single-family housing starts in June increased by 5.4% year-on-year. Strong housing construction performance was seen in most of last year and the first quarter of 2024 due to a lack of existing homes in the market.

Goldman Sachs: Global hedge funds reduce exposure to US stocks for 5 consecutive days. Goldman Sachs stated in a report on Wednesday that global hedge funds have reduced their exposure to US stocks for five consecutive days, as major tech stocks have generally fallen. Goldman Sachs reported that the value of stocks sold by hedge funds in the past five trading days is the highest since November 2022, close to a five-year record high. Additionally, the report pointed out that in the past eight trading days, hedge funds sold US tech stocks on seven trading days. Goldman Sachs stated that the information technology industry is leading the risk reduction, followed by industrial, healthcare, non-essential consumer goods, and communication services industries.

US Treasury Department delays repurchase operations due to technical issues. The US Treasury Department announced that it will postpone the bond repurchase operation scheduled for Wednesday due to technical issues. The Treasury Department stated in an email declaration that the original repurchase plan will be implemented on Thursday, July 18th The Ministry of Finance has launched a new bond repurchase program this year, originally scheduled to repurchase bonds with a maximum value of $2 billion and a term of 3-5 years on Wednesday. A spokesperson stated that this technical issue is related to the TreasuryDirect system, which has now been resolved, but did not provide further details on the matter. TreasuryDirect is the online platform of the Ministry of Finance, where investors can directly buy and sell securities to the U.S. government online.

Biden: Will consider withdrawing from the election if health issues arise. According to The New York Times, President Biden stated in a recent interview that if a doctor directly informs him of health issues, he will reassess whether to continue participating in the presidential election. This comment is the latest in a series of explanations he has made about reasons that could lead him to reconsider. Biden also mentioned for the first time that he initially wanted to "leave" the presidency and hand it over to someone else, but decided to run again because he believes his "wisdom" and experience will help bridge the country's increasingly divisive gap.

[Stock News]

Meta (META.US) will not offer new multimodal AI models in the EU. Meta stated in a release that they will launch a multimodal Llama model in the coming months, but due to the unpredictable regulatory environment in Europe, it will not be released in the EU. This move sets the stage for a showdown between Meta and EU regulatory authorities, highlighting the increasing trend of U.S. tech giants choosing to refuse to provide products to European customers. Just last month, Apple also stated that it will not release the Apple Intelligence feature in Europe due to regulatory considerations. Meta plans to use the new multimodal models in various products, including smartphones and Meta Ray-Ban smart glasses, which can infer between video, audio, images, and text. Meta stated that this decision means European companies will not be able to use multimodal models, even though these models are released under open licenses.

"Wood Sister": Robotaxi will be a major catalyst driving Tesla (TSLA.US) stock price to soar 10 times. Cathie Wood, founder of Ark Invest, stated that Tesla's development of an autonomous taxi platform will be a catalyst for its stock price to rise by about 10 times, reiterating her bullish view on Tesla's business over the years. Wood described this autonomous taxi ecosystem as an "$8 trillion to $10 trillion global revenue opportunity," believing that platform providers including Tesla could capture up to half of it. She mentioned that investors are no longer purely valuing Tesla as an electric vehicle manufacturer, but are starting to consider the potential of autonomous taxis. "The autonomous taxi platform is the largest artificial intelligence project under development today," she said. Wood added that Ark's valuation of Tesla is mainly based on its autonomous driving potential. "If our view is correct, then there is still considerable potential for the stock price." ”

【Major Bank Ratings】

Barclays: Lowered Baidu's (BIDU.US) target price from $133 to $125

Evercore ISI: Lowered Starbucks' (SBUX.US) target price from $92 to $80, changed rating from "Outperform" to "Market Perform"