Breakfast | US Stocks Plunge Ahead of Fed Chairman's Speech, S&P 500 Sector Suffers Across the Board
The Dow Jones Industrial Average (DJIA) recorded its worst performance since March, while the S&P 500 and NASDAQ Composite Index hit their lowest levels since the beginning of the month. The positive impact of NVIDIA's earnings report on the AI sector has diminished, and Chinese concept stocks have weakened. The "Vietnamese Tesla" experienced another significant increase. Meituan announced that its growth in the third quarter may slow down. T-Mobile plans to lay off 5,000 employees. Cohere, supported by NVIDIA, has seen its valuation surge to $3 billion. Jike Auto is reportedly planning an IPO to raise $1 billion. Hong Kong is advancing the issuance of the world's first batch of tokenized government green bonds.
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Market: Overnight and this morning
At 22:05 Singapore time, Federal Reserve Chairman Powell will deliver a speech at the Jackson Hole Central Bank Annual Symposium. Prior to this, US stocks failed to sustain their rebound momentum, and the upward pressure on US stocks from rising bond yields continued. The better-than-expected performance and guidance of AI benchmark company NVIDIA also failed to provide sustained support to US stocks.
The three major indices collectively fell for the first time in a week. Since the "Black Wednesday" on August 2, when Fitch Ratings downgraded the US sovereign rating, all three indices have fallen by more than 1% for the first time. The Dow Jones Industrial Average had its worst day since March. The S&P 500 and NASDAQ Composite Index recorded their largest single-day declines since August 2. The NASDAQ Composite Index fell by 1.87%, the S&P 500 fell by 1.35%, and the Dow Jones fell by 1.08%. The Russell 2000 fell by 1.27%.
All major sectors of the S&P 500 suffered losses, with the chip sector index falling by more than 2%. NVIDIA rose by 0.1%, AMD fell by about 7%, Marvell Technology fell by over 6%, Intel and Broadcom fell by over 4%, Applied Materials, ASML, and Microchip Technology fell by over 3%, Qualcomm, Broadcom, and Micron Technology fell by over 2%. AI concept stocks across the board retreated, with C3.ai falling by 11.6%, Palantir falling by over 7%, SoundHound.ai falling by nearly 7%, BigBear.ai falling by over 6%, and Adobe falling by over 3%. Tesla fell by nearly 2.9%.
Several popular Chinese concept stocks followed the market's downturn, with Kingsoft Cloud falling by over 5%, JA Solar falling by over 4%, JD.com and Tiger Brokers falling by over 2%, NIO falling by over 1%, Li Auto falling by nearly 0.3%, iQiyi and Weibo rising by over 3%, Futu Holdings rising by over 1%, XPeng Motors rising by 1%, Pinduoduo rising by nearly 0.5%, and Tencent Music Entertainment rising by 0.2%.
What happened to blue-chip stocks and hot stocks
OpenAI: Will Fine-Tune GPT-4 This Fall
The Last Bear Surrenders, Morningstar Abandons "Sell" Rating on NVIDIA
Morningstar Research has upgraded NVIDIA's rating from "sell" to "hold" and raised its estimate of the "fair value" of NVIDIA from $300 to $480. "We are now more optimistic about the growth of AI workloads and how NVIDIA's broad moat will solidify its position as a leader in AI chips. "
'Vietnam's Tesla' goes crazy again, surging 56% intraday, with a market value exceeding $120 billion
VinFast Auto closed up 32.333%, maintaining its position as the world's third-largest listed car stock, second only to Tesla and Japan's Toyota, and surpassing more than 400 companies in the S&P 500 Index. Even the well-known Citigroup bank was left behind.
Apple's attitude changes dramatically: supports California's Right to Repair Act
Apple said it supports the bill because it includes requirements to protect individual user safety and the intellectual property of product manufacturers. As long as it continues to protect customers and innovators and requires repair shops to disclose the use of non-genuine parts, Apple will continue to support the bill.
US chain "dollar store" Dollar Tree's second-quarter revenue was $7.32 billion, higher than the market's expected $7.18 billion; earnings per share were $0.91, higher than the market's expected $0.87; net profit decreased from $359.9 million a year ago to $200.4 million. The company raised its full-year sales forecast but lowered its profit forecast.
The world is changing very fast, but the only constant is that people always need to eat. Young people don't want to cook, and instant delivery is still a great opportunity. It is believed that in the long run, the penetration rate of Meituan's food delivery will further increase, and business volume will continue to grow in the future.
Futu's second-quarter revenue increases by 42% YoY, net profit rises nearly 75%
The largest proportion of total revenue is interest income, which nearly doubled and increased by nearly 127%, accounting for 56%; the total customer assets of the wealth management business increased by 98.8% YoY and 17.5% QoQ. Market volatility caused trading volume to decrease by 28.7% YoY and 21.5% QoQ.
" T-Mobile plans to lay off 5,000 employees
The scale of this layoff accounts for approximately 7% of the company's total workforce. The majority of the laid-off employees are from the company's business and backend departments, as well as some technical positions. The retail and consumer support departments will not be affected.
Soaring 40% in just two months! Cohere, the OpenAI competitor backed by NVIDIA, is valued at $3 billion
Tiger Global Fund, which led the Series B financing round for Cohere last year, plans to sell a portion of its holdings, raising Cohere's valuation to approximately $3 billion. This is a 36% increase from the valuation of $2.2 billion achieved during the Series C financing round in June.
Volkswagen announces a reorganization of semiconductor procurement
It will directly purchase chips from 10 chip manufacturers, including NXP Semiconductors and Infineon, to address the global chip shortage issue.
IPO Opportunities
Xiaokr Motors: No comment on the rumor of a $1 billion IPO fundraising
There are reports that Xiaokr Motors will meet with global investors at the end of August to gauge their interest in its IPO in the United States. The company plans to raise approximately $1 billion in funding. Xiaokr Motors cited the statement made by An Conghui, President of Geely Holding Group and CEO of Xiaokr Intelligent Technology, during Geely's 2023 mid-term financial report meeting, stating that they will continue to closely monitor the capital market dynamics and choose the right window of opportunity for listing.
Macro: A Worldview
Former "hawkish" Fed official suggests that the U.S. economy may need further rate hikes, while current voting member suggests rate hikes may already be completed
James Bullard, a well-known hawkish former Fed official, stated that the rebound in U.S. economic activity this summer may bring upward pressure on inflation, prompting higher interest rates. The Boston Fed President shares a similar view with Bullard. The Philadelphia Fed President stated that the Fed may have done enough on the issue of interest rates.
The Bank of Korea keeps the benchmark interest rate unchanged at 3.5% for the fifth consecutive pause in rate hikes.
The Central Bank of Turkey raises interest rates by 750 basis points, increasing the one-week repo rate to 25%, exceeding market expectations.
Hong Kong Monetary Authority: The world's first tokenized government green bond has completed the entire process
Consideration is being given to issuing retail bonds in tokenized form in the future. At the same time, Hong Kong has been in discussions with relevant mainland institutions to introduce effective offshore risk management tools for investing in government bonds in Hong Kong. Hong Kong Government is stepping up preparations to include RMB counter in the Hong Kong Stock Connect
The Financial Secretary of the Hong Kong Special Administrative Region Government, Paul Chan Mo-po, stated that they will continue to work closely with regulatory authorities to include RMB counters in the Hong Kong Stock Connect. This will facilitate mainland investors to directly invest in Hong Kong stocks using RMB, reducing exchange-related costs and further supporting the internationalization of the RMB.
15th BRICS Summit Johannesburg Declaration
Further discussions were held on the BRICS partnership model and the list of potential partner countries. It was decided to invite Saudi Arabia, Egypt, the United Arab Emirates, Argentina, Iran, and Ethiopia to join the BRICS cooperation mechanism. Their membership will take effect on January 1, 2024.
With the participation of official bilateral creditors, private creditors, and multilateral development banks, implementing the G20 Common Framework for Debt Treatments in a predictable, orderly, timely, and coordinated manner is an important approach to address debt vulnerabilities. It is emphasized to encourage BRICS countries and their trading partners to use their respective currencies in international trade and financial transactions.
Chinese Premier Li Keqiang's Visit to Guangdong
Premier Li Keqiang pointed out the need to continue efforts in transforming development patterns, adjusting economic structures, and boosting growth momentum. It is necessary to vigorously promote technological innovation, increase investment in basic research, leverage major innovation platforms, focus on nurturing innovative enterprises, and accelerate the digital transformation of the manufacturing industry.
Japanese Government to discharge contaminated water from Fukushima Daiichi Nuclear Power Station into the sea
The Ministry of Ecology and Environment of China stated that they are organizing the monitoring of marine radiation environment in our jurisdictional waters for the year 2023, in order to timely track and assess the potential impact of the discharge of contaminated water from Fukushima on our marine radiation environment. The General Administration of Customs announced a comprehensive suspension of imports of Japanese aquatic products starting from August 24. The Ministry of Agriculture and Rural Affairs stated that they will strengthen the monitoring of the risk of marine aquatic products being contaminated by nuclear pollution.