Open: U.S. stocks opened basically flat on Wednesday ADP employment data for June fell short of expectations

On the evening of the 3rd, Beijing time, U.S. stocks opened basically flat on Wednesday. The S&P 500 closed above 5,500 for the first time in the previous session. The number of ADP private payrolls in the United States increased by only 150,000 in June, which was lower than expected, indicating a gradual cooling of labor demand. U.S. stocks will close early today, and trading volume is expected to be light.

The Dow opened 39.62 points, or 0.10 percent, at 39,371.47, the Nasdaq fell 3.94 points, or 0.02 percent, to 18,024.82 and the S&P 500 added 0.64 points, or 0.01 percent, to 5,509.65.

U.S. stock trading is likely to be thin on Wednesday, with the New York Stock Exchange closing early at 1 p.m. ET. The U.S. stock market will be closed on Thursday's Independence Day holiday.

派拉蒙环球（Paramount Global）股价大涨。 此前有报道称，Skydance Media已达成初步协议，将收购这家娱乐巨头的控股股东National Amusements。

Tesla shares continue to move higher. Shares rose more than 10% on Tuesday after the company reported better-than-expected deliveries. The EV maker's stock is on track to rise for the seventh straight session and will be on its longest winning streak since 2024.

U.S. stocks closed higher on Tuesday, with the S&P 500 closing above 5,500 for the first time. The Nasdaq Composite also rose about 0.8% to close above 18,000 for the first time, a record high. The Dow Jones Industrial Average rose 0.4%.

On the economic data front, a report released on Wednesday by the ADP private employment agency showed that the growth rate of private sector employment in June fell slightly, indicating that the U.S. labor market may be slowing.

US ADP data for June showed that companies increased their hiring at a more modest pace in June, with wage growth slowing, in line with the gradual cooling of labor demand.

Private sector jobs were added at 150,000 in June, below the adjusted May figure of 157,000 and below the average expectation of 160,000 by analysts surveyed by Dow Jones. The ADP payrolls rose in June at the slowest pace since January.

Nela Richardson, chief economist at ADP, said: "Job growth has been solid, but the industry is not broad-based. If it weren't for the rebound in hiring in the leisure and hospitality sectors, June would have been a gloomy month. ”

The pace of salary growth for those who remained in the workforce also slowed, with year-on-year increases falling to 4.9%, the smallest increase since August 2021. Job-hoppers saw a 7.7% increase in salaries, a figure that also showed a downward trend.

The U.S. Labor Department will release the more closely watched June non-farm payrolls report this Friday, and the ADP data is often seen as a precursor to the report. The market is now expecting June non-farm payrolls to show an increase of 200,000 jobs.

However, there are frequent discrepancies between the ADP report and the government's non-farm payrolls data, sometimes even widely. ADP employment data has been consistently lower than that of the U.S. Bureau of Labor Statistics. For example, the U.S. Bureau of Labor Statistics reported in early June that private employment increased by 229,000 in May, 72,000 higher than the ADP figure for that month.

The U.S. trade deficit widened to its highest level since 2022 in May as exports of goods fell more than imports fell, Commerce Department data showed on Wednesday. The trade deficit in goods and services widened 0.8% month-on-month to $75.1 billion in May, the highest since October 2022. The median forecast of economists polled by the media was a deficit of $76.5 billion.

Exports of goods and services fell 0.7% and imports fell 0.3% in May. The data is not adjusted for inflation.

A widening trade deficit is expected to weigh on gross domestic product (GDP) growth for the second consecutive quarter. Ahead of Wednesday's data, Atlanta's Fed GDPNow forecast showed trade dragging economic growth by nearly a percentage point in the second quarter.

Continuing jobless claims in the U.S. rose for the ninth straight week, the longest streak since 2018, suggesting that more and more people are struggling to find new jobs.

Data released by the U.S. Department of Labor on Wednesday showed that the number of initial claims for unemployment benefits in the United States was 238,000 in the week ended June 29, compared with an expectation of 235,000 and a previous value of 233,000.

Continuing jobless claims rose to 1.86 million in the week ended June 22, the highest since November 2021. Initial jobless claims rose by 4,000 last week to 238,000.

Investors are still assessing the question of when the Fed will start cutting interest rates. Speaking at the central bank forum on Tuesday, Federal Reserve Chairman Jerome Powell said that while the Fed has made great progress in bringing inflation down, it is not ready to cut interest rates.

Michael Metcalfe, chief macro strategist for global markets at State Street, said: "Powell's attitude has changed. Recent inflation data is encouraging. It's heartening to think that inflation isn't as stubborn as expected and that there might be some policy support. ”

Nick Timiraos, known as the "mouthpiece of the Federal Reserve", commented that Fed Chairman Jerome Powell talked about the progress of inflation on Tuesday, bringing interest rate cuts back into view.

The Federal Reserve will release the minutes of the June Federal Open Market Committee (FOMC) meeting one hour after the close of U.S. stocks on Wednesday.

Traders are now pricing in a 69% probability that the Fed will cut rates in September and expect two possible rate cuts this year. This is in stark contrast to the more than 150bp of easing expected at the start of the year, but is a significant improvement from a few months ago when investors thought there would be no rate cuts for the full year, even if it wasn't their base case.

Investors are also eyeing the outlook for the U.S. presidential election.

As Wall Street begins to adjust for Trump's possible return to the White House, traders in the $27 trillion Treasury market are betting on higher long-term bond yields.

In the aftermath of the first U.S. presidential election debate, traders have been buying shorter-maturing Treasuries and selling longer-maturing Treasuries. This bet on a steepening of the U.S. Treasury yield curve has been gaining momentum since the first debate.

The spread between two-year and 10-year Treasury yields jumped about 13 basis points on Friday and Monday, the biggest two-day increase since October last year, the data showed.

Stocks in focus

According to media reports, the upstream chip end of NVIDIA AI GPU H200 HAS ENTERED THE MASS PRODUCTION PERIOD SINCE THE END OF Q2, AND IS EXPECTED TO BE DELIVERED IN LARGE QUANTITIES AFTER Q3. Some supply chain sources pointed out that the H200 that will be mass-produced and delivered in the third quarter is mainly NVIDIA's DGX H200, but the current orders to be shipped are still mostly concentrated in H100, and the proportion of H200 is still limited.

In this regard, Nvidia said that the shortage and even short supply of H200 may continue until 2025. In fact, in March this year, TSMC's 4nm capacity was almost full for the production of H200, directly reversing the expectation of a decline in 4nm capacity utilization at the beginning of the year.

Tesla continues to move higher. The company's second-quarter delivery figures beat expectations. Some investment banks are bullish on the stock to $400.

派拉蒙环球（Paramount Global）股价大涨。 此前有报道称，Skydance Media已达成初步协议，将收购这家娱乐巨头的控股股东National Amusements。

In fiscal year 2024 alone, Apple's output in India has reportedly doubled to $14 billion, with exports exceeding $10 billion, contributing more than 60% to India's mobile phone exports.

According to media reports on July 2, Apple will be offered the position of observer of OpenAI's board of directors, which will be held by Phil Schiller, an Apple researcher and head of the app store, but will not serve as a formal director.

The move is part of an agreement announced by both sides last month. It is worth noting that the initial cooperation between Apple and OpenAI does not involve money, and the two sides will explore the model of distribution commissions in the future. OpenAI values Apple's huge user base, and Apple hopes to provide AI functions to catch up with competitors, and share AI revenue as a platform while building its own AI ecosystem.

Google released its annual environmental report on Wednesday, pointing out that the company's total greenhouse gas emissions in 2023 reached 14.3 million tons of carbon dioxide equivalent, up 48% from the 2019 baseline and 13% from 2022.

According to Google, the main drivers are increased data center energy consumption and supply chain emissions. Google also noted that "as we further integrate AI into our products, emissions reduction may be challenged due to higher energy demand due to increased AI computing intensity, in addition to emissions associated with the expected growth in investment in technology infrastructure." ”

Amazon is in the spotlight. As of Tuesday's close, Amazon's stock price stood above $200, with a market capitalization of $2.08 trillion. Its share price has risen more than 10.5% over the past month.

Some brokerages believe that Amazon's stock price will continue to rise. Mizuho Securities maintained an "overweight" rating and a $240 price target on Amazon as Amazon's cloud computing arm, Amazon Web Services (AWS), is accelerating according to a recent survey, Mizuho Securities said Tuesday.

Brazil's national data protection authority said on Wednesday that Meta Platforms, the parent company of Instagram and Facebook, cannot use data originating in the country to train its AI models.

According to Meta's updated privacy policy, the company can enter users' public posts into its AI system. But today, Meta's practice will not be allowed in Brazil. Brazil's national data protection authority said in the country's official gazette that Meta's move would expose Brazilian users' data to an imminent risk of serious, irreparable or irreparable damage to the fundamental rights of affected data subjects.

Li Auto's deliveries in June increased by 46.7% year-on-year, and the summer conference of intelligent driving was finalized.

Xpeng's deliveries in June increased 24% year-on-year.

NIO delivered a record number of new vehicles in June.