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Morning Prep 8/10
- Global Market Overview: S&P equity futures are trading below their last reported level but remain above the previous close. Asian markets were positive, and European markets are mostly higher.
- Factors Influencing Market Tone: Various factors are driving market sentiment, including less stringent U.S. investment restrictions in China, expectations of a broader disinflation trend, movements in energy prices, and excitement about certain pharmaceuticals.
- Economic Indicators: Markets are eagerly awaiting the Consumer Price Index (CPI) figures, which are expected to provide insights into inflationary pressures and trends.
- Corporate Performance: Various earnings beats and guidance updates from companies like $DIS (Disney), $ILMN (Illumina), $APP, $ALRM, $WYNN, $SONO, and others are influencing stock movements.
- Macro-Events and Earnings Calendar: Various macroeconomic events and company earnings are scheduled, and the market will watch them closely for potential impacts.
EUROPE
- Major Indices: European markets are showing gains, with the exception of the FTSE 100. The DAX and CAC40 are positive. (Germany outperforming UK)
- Policy and Economic Factors: Investors are focused on policy changes in Italy affecting banks, EU gas prices, and signals from the ECB about the economic outlook in the Eurozone.
- Earnings and Corporate News: Several companies reported earnings and key corporate developments, including GRENKE and SMA Solar Technology, which saw negative reactions to their announcements. (It wont let me add the ticker Bc they are not US Stocks i guess..)
ASIA
- Major Indices: Most Asian indices closed higher. Hong Kong, mainland China, Taipei, and Seoul witnessed significant intraday volatility.
- Economic and Political Factors: Sentiments improved over the day with hopes of Chinese economic intervention. The U.S. limiting investment in China initially weighed on stocks.
- Corporate News: A mix of earnings, forecasts, and major business decisions from companies like Sony, Baidu, Nvidia, and others influenced stocks in the region.
KEY INSIGHTS
- Market Sentiment: The global financial markets are responding to a blend of micro and macro factors. From corporate earnings to regulatory decisions, various elements are shaping market dynamics. Recession fear seems to be erupting again.
- Inflationary Trends: The expected CPI figures are crucial as they may provide insights into the broader disinflation narrative. An easing inflationary trend might support a view that the Federal Reserve's tightening cycle may have peaked.
- Energy Prices: Continued upward pressure on energy prices is noted, which has broad implications for inflation, industry costs, and consumer spending.
- Tech Sector Dynamics: The update mentions dampened enthusiasm for AI, potential acquisition of $NVDA chips by Chinese tech companies, and other technology-related news. It highlights the sensitive and rapidly changing landscape of technology investments.
- Real Estate and Mortgage Rates: Mention of 7%+ mortgage rates indicates close monitoring of housing market dynamics, which could impact consumer behavior and economic growth. I have the feeling that this is going to be a burden left to next Goverment. Not an easy fix specially considering the increase in government spending through Ukraine war and credit tightening.
- Global Economic Concerns: Several references to macroeconomic indicators, from Japan's GDP growth forecast to concerns over global rice supply, indicate an international interconnectedness and potential volatility.
NEWS (this are top news based on my preferences)
- Capri Holdings Limited $CPRI Acquisition: Tapestry, Inc. $TPR announced a definitive agreement to acquire Capri Holdings Limited for $57.00 per share in cash, marking a significant acquisition in the luxury fashion industry.
- Johnson & Johnson $JNJ FDA Approval: The U.S. FDA has approved TALVEY, a first-in-class bispecific therapy for treating heavily pretreated multiple myeloma, paving the way for new treatment options for patients with this form of cancer.
- Lumen Technologies $LUMN Business Acquisition: The European Union cleared Colt Technology Services' acquisition of Lumen Technologies' EMEA business, signifying a noteworthy expansion in the technology sector.
- Alibaba $BABA Group Earnings Surprise: Alibaba reported Q1 non-GAAP EPADS of CNY17.37, beating FactSet estimates of CNY14.59, reflecting positive performance for the e-commerce giant in spite of various challenges.
- Wynn $WYNN Resorts Strong Performance: Wynn Resorts reported Q2 adjusted property EBITDAR of $524.5M, beating FactSet estimates by a significant margin, indicating a robust recovery in the casino and resort industry.
- NVIDIA's $NVDA Massive Order from Chinese Tech Giants: Baidu, Tencent, Alibaba, and ByteDance have ordered $5B worth of Nvidia chips needed for building generative AI systems. This highlights the escalating demand for advanced AI technology.
- Walt Disney Earnings Beat: Disney $DIS reported Q3 EPS of $1.03 ex-items, beating FactSet's $0.96 estimate. This underscores the company's ongoing resilience in the entertainment industry.
- Avid Technology Acquisition: Avid Technology $AVID confirmed it is to be purchased by an affiliate of STG for $1.4B; the transaction is valued at $27.05 per share in cash, highlighting significant M&A activity in the technology sector.
- Executive Order by President Biden: The President signed an executive order addressing U.S. investments in certain national security technologies and products in countries of concern, signaling heightened scrutiny over international investments.🤦♂️🤦♂️
Today all eyes on CPI so be patient and trust your process! have a good day!!
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