Daily Summary: Wall Street holds its breath: Hotter PCE inflation and Nvidia report in the shadow of Putin's threats

Stock Market 📈

• Wall Street investors are awaiting with considerable caution the financial report of the technology giant Nvidia, which is widely recognized as a key test for the ongoing bull market related to artificial intelligence. 

• Market expectations are extremely high, so even solid results beating the consensus may be considered a disappointment if the company does not present sensational forecasts for the coming quarters. This report will decide whether the semiconductor sector receives strong fuel for further increases or whether it faces a deep market correction.
• Revenue expectations for Nvidia are slightly over $92 billion for the past quarter, but given the scale of recent surprises, anything below $97 billion could be treated negatively by investors. 
• The Meta corporation agreed to pay a massive $16.68 billion as part of a court settlement, which investors took with considerable calm, not seeing it as a serious threat to the company's financial stability. 
• Major indices in Europe ended the session mostly on modest gains, with the Italian FTSE MIB leading the gains, while the British FTSE 100 was the only one to record a decline. Investors on the Old Continent showed great restraint before the publication of key macroeconomic data from the USA and the evening results of American technology leaders. Later, however, futures contracts began to lose value due to rising oil prices and Putin's threats.
• Clothing chain Abercrombie proved with its latest results that its dynamic story of business growth continues, supporting the company's stock valuation. Information on massive duty refunds boosted the share price by up to 30%. 
• Meanwhile, the company Anthropic entered into a massive $45 billion cloud services agreement with the Nscale platform, which will invest huge funds in the development of a data center in West Virginia. On the other hand, Chinese chip manufacturers are trying to challenge giants Samsung and SK Hynix, but the road to catching up with them remains very long.
• As of 19:26, S&P 500 is at level 7,686 and losing 0.05% (losing 0.01% for the week), Nasdaq 100 is 29,260 and down 0.09% (weekly decrease of 0.38%), the German DAX stands at 26,320 with a loss of 0.02% (gaining 0.57% for the week), the British FTSE is 10,892 and losing 0.3% (growing 0.49% for the week), the French CAC 40 at 8,480 is up 0.11% (losing 0.16% for the week), while the Dow Jones is at level 53,516 and losing 0.22% (gaining 0.36% on a weekly scale), and in individual terms Apple shares gain 1.04% to 313.13 (weekly increase of 1.29%), Nvidia stocks are down 1.32% to 210.19 (weekly loss of 2.06%), Meta shares are up 1.5% to 577.47 (weekly gain of 5.08%), and Google stocks are losing 1.58% falling to 341.44 (weekly loss of 0.69%).

Macroeconomics 📊

• The latest PCE inflation reading from the USA for July turned out to be slightly higher than market forecasts, indicating the persistence of price pressure across the ocean. The main PCE indicator rose by 3.7% year-on-year against expectations of 3.6%, while the core PCE index stood at 3.3% annually, which remains well above the Federal Reserve's long-term target. Additionally, an alternative measure of inflation, the Dallas Fed Trimmed Mean PCE, bounced to 2.2% from 1.5% last month, confirming a re-acceleration of price dynamics after discarding the most extreme fluctuations.
• The second estimate of US GDP for the second quarter maintained the pace of economic growth at 1.5%, however, investor concern was raised by revisions to inflation components. The GDP deflator was revised upwards to 6.4%, and core PCE inflation included in the report rose to 3.6% compared to the previously estimated 3.4%. Nominal growth in consumer spending of 0.2% with no change in real terms suggests that higher consumption was entirely the effect of rising prices, which puts the Fed in a complicated position.
• Durable goods orders in the US rose in July by 1.1% strongly exceeding forecasts, however details of the report turned out weaker, as orders excluding transport grew by a modest 0.4%. 
• The accumulation of data indicating economic resilience alongside sticky inflation makes the chances of the Fed leaving interest rates unchanged in September remain at around 60%. Additionally, US Treasury bond yields rose sharply, reacting to signals about the need to maintain restrictive monetary policy for longer.

Geopolitics 🌐

• Futures on American indices began to lose value after reports that President Vladimir Putin plans an escalation of military operations in Ukraine. The Russian leader considered the peace talks to date pointless and at a dead end, which triggered an immediate increase in risk aversion on global markets. The situation of tension was confirmed by information about a Russian forces strike on a cargo ship in the port of Izmail.
• Polish financial assets showed great resilience and recorded gains, ignoring disturbing reports of a confidential visit by the director of the CIA to Moscow. The domestic WIG index was supported among others by the return to growth of shares in energy and mining companies, such as PGE and KGHM.

Commodities 🛢️

• Crude oil prices recorded a clear rebound of over 2%, completely negating earlier statements by Donald Trump and breaking a three-day losing streak. The main factor supporting bulls in the fuel market was an official government report, which showed a much smaller increase in US crude inventories than widely predicted. Additionally, geopolitical tensions in Eastern Europe and the extension of diesel tax breaks by Italian Prime Minister Giorgia Meloni strengthened the demand side.
• The wheat market (WHEAT) turned out to be one of the strongest assets of today's session, generating dynamic gains, reacting to the greatest extent to the threat related to the escalation of the war between Russia and Ukraine.
• In turn, precious metals such as gold and silver found themselves under strong selling pressure due to the strengthening dollar and rising debt yields.
• As of 19:26, gold is losing 1.36% falling to 4,595 (weekly drop of 0.16%), silver is down 0.9% to 67.96 (losing 1.37% on a weekly scale), while WTI crude gains 1.85% rising to 82.57 (weekly loss of 4.7%), and WHEAT gains as much as 6.41% standing at 747.64 (weekly increase of 7.44%).

Currencies 💱

• The US dollar recorded a clear strengthening across the broad market in response to higher-than-expected PCE inflation readings from the USA.
• The EURUSD currency pair retreated after the data publication, as rising Treasury yields began to favor the greenback at the expense of the common currency. The US currency recorded the largest gains against the New Zealand dollar, the Swiss franc, and the British pound.
• As of 19:26, the EURUSD pair is losing 0.16% falling to 1.1651 (weekly drop of 0.21%), while the dollar index gains 0.25% reaching 99.08 (gaining 0.41% for the week).

Cryptocurrencies 🪙

• The Bitcoin exchange rate recorded a slight retreat today in the face of a stronger dollar and rising interest rates, however, experts from Bernstein forecast a long-term target of 300,000 dollars within three years. This optimism is based on the return of investor interest in assets protecting against the devaluation of fiat currencies. A confirmation of this trend is the fact that ETF funds based on Bitcoin and gold attracted a total of giant capital worth 7 billion dollars.
• As of 19:26, Bitcoin is losing 0.25% and is at level 78,261 (gaining 0.68% over the entire week).