- In Europe, the main indices declined. The DAX fell by over 0.5%, while the UK’s FTSE slipped nearly 0.4%. Shares of Sweden’s H&M gained almost 7% in response to the company’s reported 40% y/y increase in operating profit. Meanwhile, shares of luxury brand Brunello Cucinelli dropped sharply after Morpheus Capital published a report pointing to high valuations, weak demand, and continued business operations in Russia.
- U.S. indices fell initially after strong economic data and have since remained lower. Two hours before the close, the Nasdaq 100 and S&P 500 were down nearly 1%, with the Russell 2000 retreating the most.
- GDP and durable goods orders rose much stronger than expected. The U.S. dollar and Treasury yields surged, while expectations for Fed rate cuts fell. Q2 GDP grew at the fastest pace in almost two years, up 3.8% y/y versus 3.3% expected, while durable goods orders jumped 2.9% m/m versus forecasts of -0.3%.
- Jobless claims fell to 217,000, well below the previous 233,000 and significantly under expectations, which had not anticipated such a sharp drop. Regional Kansas City Fed data and existing home sales also came in above forecasts.
- Throughout the day, several Federal Reserve officials gave remarks. Stephen Miran stressed that the current level of Fed policy tightness is, in his view, excessive—about 150–200 basis points above neutral. However, comments from Goolsbee and Schmid were more cautious.
- On the currency market, the U.S. dollar and Canadian dollar were the strongest performers today. On the other hand, the New Zealand dollar and the British pound weakened. The Polish zloty also came under pressure amid escalating tensions between the “West” and Russia.
- Analysts at Rothschild & Co Redburn issued a ‘sell’ recommendation on U.S. tech giant Oracle, citing overestimated sales growth expectations and extreme valuations. The stock fell nearly 5%. Intel gained 6% after news that Apple may purchase a stake in the company
- Cryptocurrencies came under pressure from the stronger U.S. dollar. Bitcoin dropped below $110,000 ahead of tomorrow’s key options expiry, trading around 2% below an important on-chain level indicating that average short-term investors are now facing losses.
- Cocoa prices fell nearly 2%, dropping below the key $7,000 per ton level, following forecasts of rainfall in West Africa. Rabobank expects a cocoa market surplus in the upcoming harvest season, while demand concerns continue to dominate sentiment.
- Oil prices edged higher today and are heading toward their highest close since mid-June. According to the EIA, U.S. natural gas inventories came in slightly above expectations. NATGAS futures erased early gains following today’s contract rollover.
- Russian strategic bombers violated U.S. airspace over Alaska today, where they were intercepted by four F-16 jets. During a meeting with Erdogan, Donald Trump said the time had come for Russia to end the war. He also expressed confidence that the U.S. could persuade Turkey to halt purchases of Russian oil.
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