23 Aug 2022

The three major U.S. stock indexes fell throughout the day last night. As of the close, the Dow rose 1.91%, the Nasdaq fell 2.55%, and the S&P fell 2.14%. The yield on the 10-year U.S. Treasury bond rose 1.41% to close at 3.018%, a difference of about -30 basis points compared with the yield on the two-year Treasury bond. The fear index VIX closed up 15.53%. Brent crude closed up 0.94%. Spot gold closed down 0.66% at $1,735.88 an ounce. The dollar index remained high, closing at 108.97.

The three major stock indexes collectively opened lower. Energy prices soared, with European gas futures jumping 20% ​​on concerns over Russian supply, and Germany's electricity futures for delivery next year hit €700/MWh for the first time. The Bundesbank said the possibility of a recession in Germany has increased, with inflation likely to exceed 10%. According to the EU agency report: Russia to stop natural gas supply or pay tribute to the loss of 2.5% of the GDP of Germany and Germany. ABN AMRO lowered its forecast for U.S. fixed-asset investment in 2022 to 2.5% from 5% previously and lowered its forecast for 2023 to 1.9% from 3.3% previously. The headline GDP forecast fell to 1.7% from 2.2% previously.

Former U.S. Treasury Secretary Summers called on the Fed to send a clear message that it needs to implement restrictive policies to push up U.S. unemployment and tame inflation. And said that if the Fed continues to assure the outside world that it can easily beat inflation, it will make people very doubtful about future prospects and may further damage its credibility.

The White House said on Sunday that talks between the leaders of the United States, Britain, France and Germany to revive the Iran nuclear deal could allow sanctioned Iranian oil to enter the market to restore supplies. The Iran nuclear deal is closer now than it was two weeks ago. Iran has said its oil production capacity will exceed 4 million barrels per day by March 2023. WTI crude fell as much as 4.6% to around $87 a barrel as worries about global growth spiraled out of control and prospects for a reopening of the Iran nuclear deal improved slightly. Everything turns bearish on oil, and if the dollar continues to be the theme this week, it could spark further selling momentum.

Two OPEC+ sources said July output was 2.892 million bpd below its target, as sanctions on some members and a lack of investment from others hindered its ability to raise output. It is reported that the compliance rate of production cuts in July was 546%, compared with 320% in June, when the supply gap was 2.84 million barrels per day.

Diesel demand is set to grow this winter in the Northeast as natural gas prices soar and U.S. diesel profits surge to their highest level for the same period in more than 30 years, approaching 70 percent for the first time since June USD/barrel. The strength reflects growing concerns about the security of U.S. fuel supplies heading into peak demand season, with national inventories at their lowest levels since 2000. U.S. fuel makers have been unable to build domestic inventories as a Russian import ban realigns the global trade landscape. U.S. stocks were lower throughout the day.

Apple fell 2.3%. Apple's 10th-generation iPad is expected to be launched in October, along with the M2 chip iPad Pro.

Microsoft fell 2.94% as Saudi Arabia took the lead in approving Microsoft's Xbox acquisition of game maker Activision Blizzard.

Google fell 2.58%. Google Cloud announced that it will shut down core IoT services on August 16 next year, ranking third among the three major cloud providers.

Amazon fell 3.62%. Amazon participated in the bidding for Signify, a health care service provider, to accelerate the deployment of medical care; Amazon Cloud Technology Marketplace (China) officially supports paid AMI products.

Tesla fell 2.28%, Musk announced that the price of the fully automatic driving system will be increased by 25%; Tesla's Texas Gigafactory produces 1,000 cars a week, reaching a new milestone.

Sources from: Investing.com; Reuters.com

Louis Yap

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