Last Week's Recap
The US Market - The stock market rallied diverged
The stock market rallied diverged, as investors continued their pivot into cyclical areas of the market and small caps.
The Dow outperformed, notching its fourth consecutive positive week for the first time since May. The small caps index Russell 2000 jumped 3.5% for the week to log a year-to-date gain of 11.5%.
Tesla and Alphabet, whose lackluster earnings had triggered Wednesday's big market sell-off. While 3M skyrocketed 22%, leading the dow to the upside.
The stronger-than-expected GDP report and Friday's inflation data boosted optimism that the Federal Reserve will soon commence cutting interest rates.The Fed is expected to signal a shift toward near-term rate cuts at the upcoming Fed meeting.
The US Sectors & Stocks - Tech stocks continued to loss
The communication services sector lost 3.8%, notching for its worst week since October 2023 as investors fled tech giants. TSLA、GOOG、F and GM dragged the sector. Still, the technology sector dropped 2% as semiconductors sold off.
Tesla (TSLA) plunged more than 8%, as its earnings missed views once again. On the earnings call, Musk confirmed the robotaxi reveal event will be delayed to Oct. 10.
Alphabet (GOOGL/GOOG) closed the week with a 6% loss. OpenAI announced it was testing new AI-search capabilities with a temporary prototype called SearchGPT. However, Alphabet topped second-quarter profit and sales expectations but ad revenue from YouTube disappointed.
ServiceNow (NOW) gapped up to new high, after the software giant topped both views. ServiceNow guided up slightly for the full year, as it gains traction with generative AI revenue.
Chip stocks include NVDA 、AMD and ARM took a dive in the past week, pulling the semiconductor sector down. Earnings reports were mixed for chipmakers. Texas Instruments (TXN) delivered in-line Q2 results and guidance. But NXP Semiconductors (NXPI) and STMicroelectronics (STM) saw their shares plummet on weak Q3 guidance. Among chip-equipment stocks, KLA (KLAC) handily beat Wall Street's fiscal Q4 targets and with its guidance for the current period.
3M (MMM) recorded for its best day in more than 50 years on the back of better-than-predicted earnings. The office suppliers maker jumped more than 22% as the company easily beat expectations on both lines for the second quarter.
Ford (F) fell around 20% last week to mark its worst since the week that ended March 20. The automaker posted weaker-than-expected earnings after the bell Wednesday. This was the stock’s worst daily decline since 2008.
IBM (IBM) jumped after the blue-chip giant beat analyst expectations with both EPS and revenues. CEO Arvind Krishna said IBM's AI "book of business" has grown to more than $2 billion.
Coursera (COUR) surged 45%, as the online learning platform reported a better-than-expected results. The company said itsurpassed more than two million enrollments in its gen-AI “catalog of courses, credentials, and hands-on projects.”
Visa (V) reported its revenue climbed 10% to $8.9 billion, falling short as payment volume growth slowed. Shares fell, extending a downtrend.
Hong Kong Market - HSI continued to loss 2.28%
Hong Kong stocks drift lower as investors wait for more China policy support. The Hang Seng Index eased 2.28% in the past week to 17,469.36, trading near a three-month low.
Hong Kong's total exports and imports of goods rose by 10.7% and 9% year over year to HK$373.5 billion and $429.2 billion in June, respectively, a Wednesday filing by the Census and Statistics Department said.
Warren Buffett’s Berkshire firm disclosed in a filing to the Hong Kong exchange that its stake in BYD has fallen to 4.94% from 5.06%. Dropping below the 5% threshold means that Berkshire is no longer obligated to disclose any further sales, or whether it exits its position altogether.
Singapore Market - June core inflation was at its lowest point
The Straits Times Index (STI) slightly fell 0.6% to end the session at 3,426.47, as the country's manufacturing output decreased further in June and monetary policy remaining unchanged by MAS. Yangzijiang Shipbuilding became the most dazzling star with a 12.55% increase.
Singapore's June core inflation reading at 2.9% Y/Y, the lowest in more than 2 years. The headline inflation measure in June was up 2.4% Y/Y, lower than the 2.7% forecast in the poll.
Singapore sovereign wealth fund GIC's main gauge of investment return posted its weakest growth in four years, and said high interest rates, China economic difficulties and geopolitical tension would keep the investment environment challenging.
Australian Market - ASX 200 was down 0.6%
The Australian share market saw a turbulent week, but was still near its record high. On Thursday, the ASX 200 lost 1.3% for its worst day since June 11 and lowest close since July 10. Despite some rapid volatility, the benchmark ASX 200 finished the week down just 0.6%.
In Australia, investors were also looking to switch to smaller cap shares, although they will almost certainly have longer to wait for falling interest rates to provide some impetus for price rises.
The Week Ahead
Macro Factors - A September 'signal'?
The stock market rally is in its most fragile state in months ahead of Wall Street's busiest week of the summer.
The Fed will announce its latest monetary policy decision next Wednesday. Markets largely expect the central bank to hold rates steady at its July meeting. However, investors will look for more clarity around the interest rate outlook for the balance of the year.
Elsewhere, July jobs report will release on Friday, economists continue to debate whether recent cooling in the labor market represents normalization or more significant deterioration. The data is expected to show 175,000 nonfarm payroll jobs were added to the US economy, with unemployment holding steady at 4.1%, according to data from Bloomberg.
Earnings
A busy week of corporate earnings awaits, with 171 members of the S&P 500 expected to report quarterly results. This list includes several megacap technology stocks such as Microsoft, Meta, Amazon and Apple. The results could clarify what is in store for the stock market benchmarks that are heavily weighted toward technology, at a time when investors fear that the AI trade has gotten ahead of itself. If more disappointing results from the megacap could mean further downside for the broader market.
More than 40% of S&P 500-listed companies have posted their quarterly financial results, according to FactSet data as of last Friday. Of those, more than 78% have beaten analysts’ consensus forecasts.
Earnings highlights will include AMD (AMD), Arm (ARM), Boeing (BA), McDonald's (MCD), CoinBase (COIN) and Starbucks (SBUX).
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