- Wall Street loses, US100 loses 1.2% and leads declines on Nvidia correction (NVDA.US)
- Bank stocks fairly quiet after rating downgrade and Moody's warning announcement
- Strong 'Big Oil' - shares of Exxon (XOM.US) and Chevron (CVX.US) gains
- Markets await Disney (DIS.US) results after US session
The U.S. stock market is having another weak session, with Nvidia (NVDA.US) leading the declines, with its shares losing nearly 4% after the company unveiled a new cost-effective AI chip. The market points to increasing competition in the chip sector and problems with the cost-effectiveness of AI development, which requires massive spending on increasing computing power. During a possible recession, corporate spending and investment could drop significantly.
US bank stocks are doing quite well despite the downgrade of 10 regional banks, the indication of a 'negative outlook' on 11 institutions (including Capital One (COF.US), Citizens Financial (CFG.US) and the initiation of a review that could result in a downgrade for 6 large banks including US Bancorp (USB.US), NY Mellon (BK.US), Truist Financial (TFC.US), State Street (STT.US) and Northern Trust (NTRS.US). On the macro side, today's calendar of macro publications is very poor.
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Open real account TRY DEMO Download mobile app Download mobile app- Moody's expects a recession in the U.S. in Q1 2024, but the market has been receiving mixed signals recently in terms of expectations. Bank of America analysts have indicated that they do not expect a recession in the United States, while JP Morgan has moved it up from 2023 to 2024.
- Moody's indicated that U.S. banks remain stable overall, but highlighted risks from commercial real estate, bank assets quality deterioration and credit tightening that could deepen the U.S. recession.
Performance of stocks from the S&P% index. BigTech stocks are weakening today with weak Nvidia performance. Source: xStation5
Futures contracts for the S&P500 Index (US500) recently managed to maintain its upward trend and bounced off the 23.6 Fibonacci retracement of the May upward wave. However, bears are quickly coming to the fore. A potential correction in bank stocks could potentially weaken the index towards the 38.2 retracement at 4400 points. Source: xStation5
News from companies
- Array Technologies (ARRY.US) gains 22% after raising its earnings per share and EBITDA forecast, the market was unconcerned by lower annual revenue estimates for the manufacturer of components used in renewable energy.
- Celsius Holdings (CELH.US) gains 21% after successful Q2 results in terms of both margins, revenue and net income.
- DraftKings (DKNG.US) loses amid concerns that competition from ESPN and Penn Entertainment will herald revenue pressure in the sports betting industry.
- Duolingo (DUOL.US) gains - the provider of software to help learn foreign languages reported better Q2 results and raised forecasts
- Shares of Uber competitor Lyft (LYFT.US) lose 11% as the company presented the slowest y/y revenue growth since the pandemic and by
- Super Micro Computer (SMCI.US) shares of the server rack maker are losing 22% after a nearly 300% rally this year - a relatively good Q2 report proved a good opportunity to take profits.
- Twilio (TWLO.US) gains as the software company reported higher-than-forecast Q2 financial results.
- Shares of courier company UPS (UPS.US) lose after analysts at UBS cut their recommendation to 'Neutral' from 'Buy', indicating that its path to higher profitability remains uncertain in the current macro environment
