5 Aug 2022

The three major U.S. stock indexes were mixed overnight. As of the close, the Dow fell 0.26%, the Nasdaq rose 0.41%, and the S&P fell 0.09%. The yield on the 10-year U.S. Treasury bond fell 1.98% to close at 2.694, a difference of about -36 basis points compared with the yield on the two-year Treasury bond. The VIX, the fear gauge, closed up 0.2%. Brent crude closed down 3.29%. Spot gold closed down 0.01% at $1,790.87 an ounce. The dollar index remained high, closing at 105.76.

The U.S. trade balance recorded -$79.6 billion in June, the smallest deficit since December 2021. The average 30-year mortgage rate fell to 4.99% from 5.3% last week, the lowest level since early April and the biggest weekly drop since early July, data from Freddie Mac showed on Thursday. Economists analyzed that U.S. mortgage rates fell below 5% for the first time in nearly four months, allowing borrowers to breathe a sigh of relief. However, due to both high inflation and slowing economic growth at the same time, mortgage interest rates fluctuate widely. The three major stock indexes opened flat

The performance of Chinese concept stocks today is eye-catching. MissFresh rose by more than 70%, and once rose by more than 170% before the market. AMTD Digital was suspended and closed down more than 34% yesterday. Cheung Kong Limited said, Its subsidiaries do not directly hold shares in AMTD Digital and have no business relationship with the company. Alibaba's Q1 revenue in fiscal year 2023 was 205.56 billion RMB, the market expected 203.231 billion RMB, and 205.74 billion RMB in the same period last year.

In terms of the political situation, Taiwanese media quoted Taiwan's defense department as saying on the evening of the 3rd that a total of 27 PLA military planes entered the "Taiwan Air Defense Identification Zone" and crossed the so-called "strait center line". U.S. House of Representatives Speaker Nancy Pelosi left Taiwan, China by plane at around 17:53 Beijing time on August 3. The U.S. Senate has enough votes to approve Finland and Sweden to join NATO, and the vote is still in progress. The three major stock indexes closed higher

Fed Mester said that the path of inflation will determine the scale of future rate hikes, and once inflation falls back to near the 2% target, we will cut interest rates, which should be slightly above 4%. It's also not unreasonable to think a 75bps rate hike is possible in September; but it's likely 50bps, which will be data-guided. The United States declared the monkeypox outbreak a public health emergency. The instability in the world has intensified, and the three major stock indexes were mixed.

Apple rose 3.82%. Apple's third-quarter report withstood the headwinds of the macro environment, and its performance exceeded expectations.

Amazon rose 4%, and Amazon's market share in the global cloud infrastructure market reached 34% in the second quarter.

Tesla rose 2.27%. The Tesla shareholder meeting is about to open, and the stock split vote has attracted much attention.

Meta rose 5.37%. Meta may issue bonds for the first time, with a scale of up to 10 billion US dollars.

Sources from: Investing.com; Reuters.com

Louis Yap

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