Overnight US Stocks | PPI Data Boosts Rate Cut Expectations, Nasdaq Rises Over 2.4%, NVIDIA Rises Over 6%

According to the Wise Finance APP, on Tuesday, the three major indexes rose sharply, with the Nasdaq up more than 2.4%. The July PPI data increased the probability of a Fed rate cut. After the CEO of Moxi Barbecue took over Starbucks, the latter rose more than 24%, marking the best performance in history.

[US Stocks] At the close, the Dow rose 408.63 points, or 1.04%, to 39,765.64 points; the Nasdaq rose 407.00 points, or 2.43%, to 17,187.61 points; the S&P 500 rose 90.03 points, or 1.68%, to 5,434.42 points. Apple (AAPL.US) rose 1.7%, Tesla (TSLA.US) rose 5%, NVIDIA (NVDA.US) rose over 6%, with a market value increase of over $400 billion in the past four trading days, and Starbucks (SBUX.US) rose 24.5%. The Nasdaq China Golden Dragon Index closed up 0.18%.

[European Stocks] The German DAX30 index rose 95.90 points, or 0.54%, to 17,807.50 points; the UK FTSE 100 index rose 24.38 points, or 0.30%, to 8,234.63 points; the French CAC40 index rose 25.20 points, or 0.35%, to 7,275.87 points; the Euro Stoxx 50 index rose 22.77 points, or 0.49%, to 4,694.65 points; the Spanish IBEX35 index rose 77.80 points, or 0.73%, to 10,724.00 points; the Italian FTSE MIB index rose 77.68 points, or 0.24%, to 32,006.00 points.

[Asia-Pacific Stock Markets] The Nikkei 225 index rose more than 3.4%, the Indonesia Jakarta Composite Index rose 0.81%, and the Vietnam VN30 index fell 0.21%.

[Gold] COMEX December gold futures closed slightly up 0.11% at $2,506.8 per ounce; COMEX September silver futures closed down 0.31% at $27.920 per ounce.

[Cryptocurrency] Bitcoin rose more than 2.7% to $60,964.8 per coin; Ethereum rose 0.23% to $2,729.69 per coin.

[Crude Oil] NYMEX September WTI crude oil futures prices fell $1.71, or over 2.13%, to close at $78.35 per barrel. ICE October Brent crude oil futures closed down $1.61, or over 1.95%, at $80.69 per barrel.

[Metals] London metals saw mixed movements, with LME copper down 0.48%, LME zinc down around 1.97%, LME tin down around 1.17%, LME aluminum up nearly 1.13%, and LME lead down over 2.78%.

[Macro News]

US July PPI lower than expected. The U.S. producer price index for July rose less than expected, highlighting continued easing inflation pressures. Data released on Tuesday showed that the PPI index representing final demand rose 0.1% from the previous month. The median forecast from economists surveyed by institutions was for a 0.2% increase. In addition, compared to a year ago, the PPI rose by 2.2%. Excluding the volatile food and energy categories, the July PPI was unchanged from the previous month, marking the mildest reading in four months The more closely watched CPI data will be released on Wednesday, with the index expected to show a slight increase. Against the backdrop of easing inflationary pressures, weak July employment data has led economists to predict that the Federal Reserve will begin a series of rate cuts starting next month.

US Small Business Optimism Rises to Highest Level Since February 2022. Small business optimism in the US rose to a two-year high in July, with a more positive outlook on the economy and sales prospects. The National Federation of Independent Business (NFIB) Small Business Optimism Index rose 2.2 points to 93.7, marking the fourth consecutive month of increase and the longest streak since before the pandemic. While companies remain pessimistic about future business conditions, the proportion of firms expecting the economy to worsen has dropped to the lowest level since November 2020. This factor is almost entirely attributed to the increase in the confidence index, with four of the other ten sub-indices showing improvement in July. In addition to economic expectations, the net percentage of businesses expecting sales growth in the coming months reached its highest level this year. While the optimism index remains below pre-pandemic levels, the increase in the index is accompanied by positive news on inflation. The report shows that the net proportion of companies planning to raise prices has dropped to 24%, the lowest since April 2023. A smaller proportion of companies indicated that they had already raised prices last month.

Fed's Bostic: Supports Rate Cuts by the End of 2024. Atlanta Federal Reserve Bank President Bostic stated that he would like to see "a little more data" before supporting rate cuts, emphasizing his desire to ensure that the Fed does not have to change course after easing. "We want to be absolutely sure," Bostic said at a conference of African American finance professionals in Atlanta on Tuesday, "If we start cutting rates and then have to raise them again, that would be very bad." Bostic reiterated his position since March that he may be ready to cut rates "by the end of this year."

Goldman Sachs and Morgan Stanley Models: Market-Implied Probability of US Recession Has Sharply Increased. Models from Goldman Sachs and J.P. Morgan indicate that the market-implied probability of an economic recession in the US has significantly increased based on signals from the US bond market and the performance of stocks, which are highly sensitive to the business cycle to a lesser extent. Goldman's data shows that the stock and bond markets currently see a 41% chance of a US economic recession, up from 29% in April. A similar model from J.P. Morgan calculates that due to significant repricing of US Treasuries, the probability of a recession has jumped from 20% at the end of March to 31%. J.P. Morgan strategist Nikolaos Panigirtzoglou stated that the recession risk in the bank's model reflects the extent of rate cuts the market has absorbed since the employment report showed a slowdown in job growth last month.

Morgan Stanley Strategist: No Signs of US Stock Market Entering Bear Market. Morgan Stanley strategist Mike Wilson stated that while unfavorable seasonal factors and uncertain economic growth prospects may limit the upside potential for the market in the remaining time of this quarter, the likelihood of a broad market crash in the US is also very low. Wilson accurately predicted the recent downturn in the stock market in July. He now points out that due to lingering concerns among traders following last week's sharp decline, a major collapse is unlikely to occur However, he still believes that the S&P 500 index has almost no room for further growth, expecting the index to fluctuate in the range of 5000-5400 points. The lower limit of this range implies a drop of about 7% from Tuesday's level, while the upper limit is basically in line with the current level.

[Individual Stock News]

Insiders: US regulators plan to require Google (GOOG.US) to split Android and Chrome. According to insiders, after a court ruling found Google to have a monopoly in the online search market, the US Department of Justice is considering the rare option of proposing to split Google's business. This would be the first time the US government has split a company on the grounds of illegal monopoly since the failed effort to split Microsoft 20 years ago. Less severe options include forcing Google to share more data with competitors and taking measures to prevent it from gaining unfair advantages in artificial intelligence products. The government is likely to seek an injunction against exclusive contracts, which are at the core of the Google monopoly case. If the Department of Justice pushes forward with the split plan, the most likely divisions to be spun off are the Android operating system and the web browser Chrome. The US DOJ is also trying to force Google to sell its AdWords platform used for text advertising.

BHP (BHP.US) reopens negotiations with Chilean copper mine union leaders. According to insiders, BHP has reopened salary negotiations with the union leaders of the Escondida copper mine in Chile in an effort to end the strike that began on Tuesday. The Escondida No. 1 union has agreed to BHP's request to revisit key issues. It was these issues that led to the failure to reach an agreement in the negotiations that ended on Monday. The meeting is scheduled to end at 8 pm Chile time (8 am Beijing time today). If an agreement is reached between the two parties and approved by the workers, Escondida will resume normal operations. The mine produces about 5% of the world's copper output.

Starbucks (SBUX.US) changes leadership, appoints Chipotle CEO as successor. The world's largest coffee shop chain, Starbucks, announced that it will appoint Brian Niccol as the company's CEO. Niccol is currently the CEO of the fast-food brand Chipotle. Niccol will assume the role of Starbucks CEO and Chairman of the Board on September 9. Current Starbucks CEO, Laxman Narasimhan, will immediately step down, and the company's CFO, Rachel Ruggeri, will serve as interim CEO until Niccol officially takes office. Narasimhan was personally selected by former Starbucks CEO Howard Schultz as his successor, joining Starbucks as CEO-designate in September 2022 and officially taking over from Schultz in March 2023. During Narasimhan's tenure, Starbucks' stock price fell by 21%. Due to weak sales in the two largest markets, the US and China, Starbucks' performance has been poor this year. Starbucks has long been under pressure from activist investors, including the prominent hedge fund Elliott Investment Management, which holds a significant stake in Starbucks and has been pressuring the company to improve performance and stock price Nikol will become the sixth CEO in Starbucks' history, and the second CEO from outside the company.

Vanguard increased holdings in NVIDIA and Exxon Mobil in Q2, while reducing holdings in Amazon. According to the 13F filing, asset management giant Vanguard increased its holdings in 7 major US technology stocks in the second quarter, including adding 11.43 million shares of NVIDIA (NVDA.US) and reducing holdings in Berkshire Hathaway (BRK.A.US, BRK.B.US) and Amazon by 18.75 million shares. In addition, Vanguard also increased its holdings by 49 million shares of Exxon Mobil (XOM.US). As of the end of the second quarter, Vanguard reported a portfolio value of $5.21 trillion, up from $5.05 trillion previously.

BlackRock increased holdings in NVIDIA and Exxon Mobil in Q2. According to the 13F filing, asset management giant BlackRock increased its holdings in 7 major US technology stocks in the second quarter, including adding 16.88 million shares of NVIDIA (NVDA.US), 9.69 million shares of Apple (AAPL.US), and nearly 9 million shares of Microsoft (MSFT.US); while reducing holdings in Broadcom (AVGO.US) and Berkshire Hathaway (BRK.B.US). Additionally, BlackRock increased its holdings by 30 million shares of Exxon Mobil (XOM.US), aligning with Vanguard's actions. As of the end of the second quarter, BlackRock reported a portfolio value of $4.42 trillion, up from $4.3 trillion previously