On July 3, local time, most European and American stock markets closed up, with S&P, Nasdaq, Google, Apple, and Microsoft all hitting new highs, and chip stocks also performed well, with Tesla once rising more than 7% and Nvidia rising more than 4%.
Most of the Chinese concept stocks rose, and the Nasdaq China Golden Dragon Index rose more than 3%, rising for three consecutive trading days, hitting a new high since June 17. Douyu rose more than 42%, Xpeng Motors rose more than 9%, NIO rose more than 7%, and Li Auto rose more than 6%. In addition, both the onshore and offshore renminbi rose against the US dollar, with the latter rising nearly 50 basis points.
Fed officials acknowledged in the last meeting that the U.S. economy appears to be slowing and that price pressures are easing, but still recommend a wait-and-see approach before committing to rate cuts, according to the minutes of the latest Fed meeting.
Most of the seven sisters in U.S. stocks rose
Google, Apple, and Microsoft all hit new highs
Since Thursday is Independence Day, U.S. stocks are closed all day on Thursday and closed three hours earlier on Wednesday, that is, at 1:00 a.m. Beijing time.
On Wednesday, July 3, local time, the three major U.S. stock indexes closed mixed. Wind data showed that the Dow fell 0.06%, the S&P 500 rose 0.51%, and the Nasdaq rose 0.88%. The S&P 500 and Nasdaq both closed at record highs.
Most of the seven sisters in U.S. stocks rose. Among them, Apple rose 0.58%, with an intraday record high of $221.55 and the latest total market value of $3,397.3 billion, ranking second among U.S. stocks; Microsoft rose 0.32%, rising for three consecutive days and hitting a record high of $461.02, with the latest total market value of $3,424.6 billion, the largest in the U.S. stock market; Google A rose 0.31% to a record high of $186.09; Nvidia rose 4.57%, with the latest total market value of $3,155.7 billion, ranking third in U.S. stocks; Netflix rose 0.43%; Amazon fell 1.20%.
Tesla rose 6.54%, hitting an intraday high of $248.35, once rising more than 7%, hitting a new high since January 2 this year, and hitting a seven-day winning streak. On the news side, Tesla officially announced through Weibo on Wednesday night that the company's second-generation humanoid robot Optimus will be unveiled at the 2024 World Artificial Intelligence Conference held in Shanghai from July 4 to 7 to "witness the re-evolution of humanoid robots".
Chip stocks rose across the board, Broadcom rose more than 4%, TSMC rose more than 3%, ASML rose more than 2%, Qualcomm rose more than 1%, and Intel rose 0.51%.
All three major European stock indexes closed higher across the board. At the close, Germany's DAX rose 1.16%, France's CAC 40 rose 1.24%, and Britain's FTSE 100 rose 0.61%.
Most Chinese assets rose
The Nasdaq China Golden Dragon Index hit a new high in more than two weeks
Popular Chinese concept stocks generally rose. The Nasdaq China Golden Dragon Index rose 3.31%, rising for three consecutive sessions and hitting a new intraday high since June 17.
Betta rose 42.49% to a maximum of $18.33 per share, hitting a new high since early February 2023. On the news side, Douyu announced that the board of directors has approved and announced a special cash dividend of $9.76 per share, totaling about $300 million, which will be paid by the end of August 2024.
Huya Live rose more than 12%, Zhihu and Zeekrypton rose more than 9%, Shanda Technology and Canadian Solar rose more than 8%, Bilibili rose more than 4%, Baidu rose more than 3%, Alibaba, JD.com, Pinduoduo, and NetEase rose more than 2%.
China's new energy vehicle stocks rose collectively, with NIO up more than 7%, Xpeng Motors up more than 9%, and Li Auto up more than 6%. On the news side, according to the WeChat official account of Ideal Auto, the 9th anniversary car purchase gift of Ideal Auto was launched, and you can enjoy a limited-time car purchase right of 10,000 yuan and 0 down payment car purchase plan by ordering Ideal L6/Ideal L7/Ideal L8/Ideal L9/Ideal MEGA.
In terms of RMB exchange rate, on July 4, the onshore RMB closed at 7.2699 against the US dollar in overnight trading, up more than 10 basis points from the previous trading day's overnight session.
On Wednesday (July 3), at the end of New York trading, the dollar index fell 0.32% to 105.35, most of the non-US currencies rose, the dollar rose 0.15% against the yen to 161.68, and the offshore yuan rose 49 basis points against the dollar to 7.3031.
A number of economic data were weak
Increase Fed rate cut expectations
On the macro front, the "small non-farm" ADP in the United States added 150,000 jobs in June, significantly lower than the expected 165,000 and the lowest level in four months. In addition, the number of initial jobless claims in the United States rose to 238,000 in the week of June 29, far exceeding expectations of 235,000. Both of these data fell short of expectations, indicating a cooling of the U.S. labor market.
The ISM non-manufacturing PMI in the United States in June was 48.8, the lowest since May 2020, with an expectation of 52.5 and a previous value of 53.8. Analysts said that the weakness of the ISM services index in the United States in June added signs of slow economic growth in the United States, driving up interest rate cut expectations. After the release of the data, investors were optimistic about the prospect of the Fed cutting interest rates.
The dollar fell and gold moved higher after the data. Spot gold in London rose 1.14% to $2,355.80 an ounce; Spot silver in London was at $30.486 an ounce, up 3.31%. COMEX gold futures rose 1.37% to $2,365.4 an ounce, and COMEX silver futures rose 3.87% to $30.805 an ounce.
U.S. WTI crude oil futures and Brent crude oil futures were reported at $83.60 per barrel and $87.05 per barrel respectively, up 0.95% and 0.94% respectively.
Analysts said that as the US Energy Information Administration's crude oil inventories plummeted by more than 12 million barrels, and the protracted conflict between Israel and Hamas in the Gaza Strip maintained the risk premium of crude oil futures, supporting the rise in international crude oil prices.
Fed Meeting Minutes:
Wait for more information to gain confidence in rate cuts
At 2 a.m. Beijing time on July 4, an hour after the U.S. stock market closed on Wednesday, the Federal Reserve released the minutes of its two-day meeting held on June 11-12.
Fed officials did not believe it would be appropriate to lower borrowing costs until more information gives them confidence to move inflation toward the 2% target, according to the minutes of the Fed meeting. The vast majority of Fed officials assessed that economic growth "appears to be cooling gradually." A number of participants indicated that they considered the current policy position to be restrictive. The monthly increase in the core personal consumption expenditures price index was smaller, indicating clear progress in inflation and was supported by the May CPI data.
The Fed minutes showed that some officials stressed the need for patience to let higher rates continue to dampen demand, while others noted that rates "may need to be raised" if inflation remains elevated or rises further. Multiple officials said the Fed needs to be ready to respond to unexpected weakness.
The Fed minutes showed that the Fed is increasingly cautious about the labor market as risks to achieving employment and inflation targets are better balanced. Several participants highlighted in particular that a further weakening of demand as the labour market normalizes could produce a greater unemployment response than in the past, where the decrease in labour demand was more reflected in the reduction of job vacancies. While the U.S. economy continues to increase employment at a steady pace, the unemployment rate has risen slightly in recent months.
Overall, the latest Fed minutes reaffirmed the wait-and-see stance of Fed policymakers. At last month's meeting, they argued that more data was needed to confirm confidence in starting to cut interest rates, and most believed that the US economy was cooling.
Nick Timiraos, a well-known financial journalist known as the "new Fed news agency", has since published an article saying that Fed officials are not confident enough to cut interest rates due to high inflation.
Source: China Securities Journal