Overnight US Stocks | Three major indices fell this week, with the Nasdaq falling into a pullback zone and Amazon dropping by 8.78%

According to the Wise Finance APP, on Friday, the three major indices experienced a sharp decline, with the Dow dropping over 600 points and the Nasdaq falling into a correction zone. The unemployment rate rose to 4.3%, hitting a near three-year high, raising concerns about an economic recession. This week, all three major U.S. stock indices recorded declines, with the Dow down 2.11%, the Nasdaq down 3.35%, and the S&P 500 down 2.08%.

[U.S. Stocks] At the close, the Dow fell 610.71 points, a decrease of 1.51%, to 39,737.26 points; the Nasdaq dropped 417.98 points, a decrease of 2.43%, to 16,776.16 points; the S&P 500 index fell 100.12 points, a decrease of 1.84%, to 5,346.56 points. Amazon (AMZN.US) fell by 8.78%, Tesla (TSLA.US) fell by 4.24%, NVIDIA (NVDA.US) fell by 1.78%, and Apple (AAPL.US) rose by 0.69%.

[European Stocks] Major European indices rose, with Germany's DAX30 index down 2.33%, France's CAC40 index down 1.61%, the Euro Stoxx 50 index down 2.67%, and the UK's FTSE 100 index down 1.31%.

[Asia-Pacific Stock Markets] The Nikkei 225 index fell by 5.81%, Indonesia's Jakarta Composite Index fell by 0.2%, and Vietnam's VN30 index rose by 0.71%.

[Gold] COMEX gold futures rose by 0.21% to $2,486.1 per ounce, with a weekly gain of 2.11%; COMEX silver futures rose by 0.07%, with a weekly gain of 2.23%.

[Cryptocurrency] Bitcoin fell by over 4.8% to $62,133.3 per coin; Ethereum fell by over 6% to $3,005.1 per coin.

[Crude Oil] U.S. WTI crude oil futures saw a sharp decline on Friday. The weak July non-farm payroll report raised concerns about a possible economic recession, putting pressure on oil prices. The price of WTI crude oil futures for September delivery on the New York Mercantile Exchange fell by $2.79, a decrease of 3.66%, to close at $73.52 per barrel. Calculated by the most active contract, WTI crude oil futures fell by over 4.7% this week.

[Metals] London metals saw mixed movements, with London copper up by 0.46%, London nickel up by 0.51%; London aluminum down by 1.52%, and London zinc down by 1.48%.

[Macro News]

U.S. Job Growth Slows More Than Expected, Unemployment Rate Unexpectedly Rises. Data released by the U.S. Bureau of Labor Statistics on Friday showed that U.S. non-farm payroll growth slowed more than expected in July, increasing by only 114,000 people, with the unemployment rate rising to 4.3%. These data may exacerbate concerns about a deteriorating job market and signal a possible economic recession in the U.S. Average hourly earnings increased by 0.2% last month, following a 0.3% increase in June. Over the 12 months ending in July, wages increased by 3.6%. This is the smallest year-over-year increase since May 2021, compared to a 3.8% increase in June. The unexpected rise in the U.S. unemployment rate in July marks the fourth consecutive month of increase, reaching 4.3%, the highest since October 2021, triggering a warning signal indicating an economic recession The slowdown in US job growth in July exceeded expectations, with the unemployment rate rising to near the highest level in nearly three years, indicating that the labor market is cooling faster than other data suggests.

US factory orders in June fell more than expected. Government data released on Friday showed that new orders for US factories in June fell more than expected, but business equipment spending remained as strong as initially estimated. Data from the US Census Bureau showed that factory orders fell by 3.3% after a 0.5% decline in May. Excluding aircraft, non-defense capital goods orders increased by 0.9%, slightly lower than the 1.0% reported last month. These orders are seen as an indicator of business equipment spending plans. Non-defense capital goods orders fell by 22.5%, rather than the initially estimated 22.4%.

The Taylor Rule shows the Fed is "slow seven beats" in cutting rates. Institutional analysis indicates that the classic "Taylor Rule" model suggests that the current Fed's benchmark interest rate is about 1.7 percentage points higher than the appropriate level, equivalent to seven 25-basis-point rate cuts. The July non-farm payroll data previously released showed the unemployment rate rising to 4.3%. The latest inflation data shows that the Fed's favored indicator, the so-called core PCE price index excluding food and energy items, rose by 2.6% year-on-year in June. Fed officials assume a "neutral real interest rate" of 0.8% and a long-term unemployment rate of 4.2%. Taking all these factors into account, the model calculates an interest rate level of 3.65%, while the current effective federal funds rate is around 5.3%.

Gurkib responds calmly to non-farm payroll data: the Fed will not overreact. Chicago Fed President Gurkib emphasized that the Fed will not overreact to any economic report, and policymakers will have plenty of data before the next Fed meeting. Speaking after the release of weaker-than-expected non-farm payroll report, Gurkib said the Fed's job is to understand the "continuity" of the data and act in a "stable" manner. However, he pointed out that if restrictive rates are maintained for too long, policymakers must consider the employment aspect. "If the unemployment rate rises above the level of the neutral rate, this is another risk that the Fed must consider and address as required by law." Gurkib also stated that the economic situation will determine the timing and scale of rate cuts. "When rate cuts are needed, they are often not done in one go."

Citi: Expects the Fed to cut rates by 50 basis points in September and November respectively. Citi economists expect the Fed to cut rates by 50 basis points at the September and November meetings, and by 25 basis points at the December meeting, having previously expected 25 basis point cuts at these three meetings. Based on the July employment data released on Friday, Veronica Clark and Andrew Hollenhorst predict that the Fed will cut rates by 25 basis points at each subsequent meeting until mid-2025, bringing the target range for the federal funds rate to 3%-3.25%.

Harris secures enough votes, locks in Democratic presidential nomination. Jamie Harrison, chair of the Democratic National Committee, announced on Friday that Vice President Kamala Harris has secured enough votes from Democratic delegates to become the Democratic presidential nominee The online voting process did not end until Monday, but this marked her crossing the threshold to secure the majority of representative votes. Harris said in a conference call with supporters, "I am honored to be the presumptive Democratic nominee." Harris has not yet chosen her running mate, and it is expected that she will interview candidates over the weekend.

[Stock News]

Boeing (BA.US) spacecraft malfunction remains unresolved, NASA is considering alternative plans. Due to the ongoing issue with Boeing's "Starliner" spacecraft, the National Aeronautics and Space Administration (NASA) has engaged in intense discussions this week on whether to have the two astronauts aboard the questionable Starliner return or to opt for SpaceX's Dragon spacecraft. Sources claim that there is significant concern within NASA about the Starliner, as they have not identified the root cause of the propulsion system failure during docking, let alone resolved the issue.

The vast majority of losses caused by global IT failures are unlikely to be covered by insurance. According to the latest estimates from agencies, the losses caused by the global IT failure triggered by CrowdStrike (CRWD.US) last month are expected to be mostly uninsured. Parametrix, an insurance company, stated that this multi-day network event led to flight cancellations, business closures, market halts, resulting in approximately $5.4 billion in losses for Fortune 500 companies. However, insurance losses are projected to be significantly lower. Reinsurance broker Guy Carpenter estimated this week that insurance losses will range from $300 million to $1 billion, while risk analysis firm CyberCube believes the figure will be between $400 million and $1.5 billion. These forecasts indicate a relatively moderate insurance response to this significant cyber event.

[Major Bank Ratings]

Bank of America: Lowered the target price for Intel (INTC.US) from $35 to $23 and downgraded its rating from "Neutral" to "Underperform."