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The Bank of Japan (BoJ) raised its rate to 0.25% as cautiously expected and announced that it will reduce the monthly bond purchases in a predictable manner. The JGB yields and the yen rose.
Across the Pacific, the Federal Reserve (Fed) also started its two-day policy meeting and will announce its decision later today. The Fed is not expected to make a change to its rates today, but is widely and wildly expected to hint at a September rate cut.
But that expectation is not helping the major US indices to stay afloat. Beirut explosion, a swift flight to safety...

There is a sense of hope in the market this Monday morning after Friday’s PCE data boosted the expectation that the Federal Reserve (Fed) is getting very close to signaling its first rate cut in September. The US yields and the dollar are under pressure this Monday morning, the euro and sterling are better bid, while tension among the Japanese yen bulls mount ahead of the Bank of Japan (BoJ) decision; the BoJ is expected to announce QT and lower rates this week.
In equities, Friday was a better day for the Big Tech stocks in the US. Roundhill’s Magnificent...

We went from ‘the Federal Reserve (Fed) could hardly cut in September’ to ‘it would be a mistake not to cut in July or September’ (source: Mohammad El Erian’s Linkedin feed) in a blink of an eye. We’ve been seeing the lower S&P500 and Nasdaq countered by a rise in economically sensitive sectors since about two weeks now. And diving into the S&P500, around 300 of the stocks in there actually gained yesterday, US crude rebounded after testing the $77pb support and the Rusell 2000 stocks rallied 1.26% – reinforcing the rotation trend – from tech to non-tech - after...

Underwhelming results from Tesla and Alphabet painted the equity markets in the red yesterday. The S&P500 experienced its worst selloff since December 2022, Nasdaq 100 tumble as Roundhill’s Magnificent 7 ETF dropped more than 6% yesterday. Also, from a broader perspective, the fact that the Federal Reserve (Fed) cut expectations are rising is not positive for the Big Tech stocks as these behemoths were seen as a safe place to hide when the rates were high, and could see their advance wane due to a sector rotation. For the bears who were waiting in ambush, the time of correction may...

The first view on Big Tech earnings wasn’t inspiring. Tesla’s earnings missed estimates for the 4th consecutive quarter as revenue from car sales declined 7%. Shares slashed almost 8% in the afterhours trading. Over at Google, the parent Alphabet reported the smallest earnings beat since early 2023 and the share price fell 2% in the afterhours trading.
As such, two of the Magnificent 7 stocks failed to create euphoria when they reported their Q2 results yesterday. The S&P500 and Nasdaq both closed yesterday’s session with small losses, and the futures are both in the negative this morning.
In Europe, the...

Week started on a bullish note in Europe and the US as Jow Biden’s decision to leave the presidential race didn’t impact the market mood. Major US and European indices rebounded, mega cap led gains and the US dollar weakened.
Tesla and Google are due to report earnings today after the bell, and their results – or the reaction to their results – could shift the wind in either direction.
In energy, US crude slipped below the $80pb psychological and Fibonacci support and tipped a toe below the 200-DMA despite a surprise People’s Bank of China (PBoC) rate cut, the...

Joe Biden threw in the towel and announced that he quits the presidential race this weekend. The early polls show that Harris is a favourite to become the new Democrat nominee, but that Donald Trump is still expected to win the November’s presidential election. The Trump trade could lose some steam but will probably not get reversed if Harris doesn't make a material difference in the polls quickly.
The latter expectation was reflected with a brief post-announcement selloff and a rebound in Bitcoin. The US dollar is slightly softer across the board. Stock futures in Europe and the US are...

TSM announced better-than-expected quarterly results and lifted its growth projections for this year’s revenue. Good news helped limiting the previous day selloff in chip stocks yesterday but couldn’t prevent the S&P500 and Nasdaq 100 from closing Thursday’s session with losses. Week brings a lot of questions regarding the remaining potential of the AI rally…
In politics, Biden is under an unbearable pressure to leave the presidential race because he is too old. Many Democratic heavy weights are now turning their back against the President. Even Barrack Obama said he should consider stepping down. And there are rumours that he could...

While everyone is speculating on how the ongoing international trade war could worsen if Donald Trump returns to the White House, it was Joe Biden who delivered a blow to the market yesterday as his administration told allies that it’s considering severe restrictions if companies like the Japanese Tokyo Electron and Dutch ASML keep providing China the tools they need to access advanced chip technology. Chipmakers tanked and pulled major indices lower. Let’s see if earnings from Netflix and TSM could put a smile back on investors’ face and help TSM – which lost 8% yesterday – recover a part...