What Moved The Markets This Week 📈
Moody's Cuts Ratings Of 10 U.S. Banks, Disney's ESPN Launches Sportsbook, Nvidia Reveals New GH200 AI Chip, CPI Inflation Jumps For First Time In 13 Months, and DIS + UPS + PLTR Earnings
Sunday Morning Markets
Trading Week 32, covering Monday, Aug 7 through Friday, August 11. Your weekly financial markets update, in less than 5 minutes.
The Week In Review ⏪
Inflation data
CPI +3.2% vs 3.3% estimate and 3.0% previous
PPI +0.8% vs 0.7% estimate and 0.2% previous
Moody’s cuts ratings of 10 U.S. banks
Credit card balances exceed $1 trillion for the first time
Disney launches ESPN Bet sportsbook in partnership with Penn
China exports and imports plunge, economy in deflationary territory
PayPal launches dollar-backed PYUSD stablecoin
Nvidia releases its new “GH200” AI chip
Novo’s Wegrovy found to cut risk of heart attack or stroke by 20%
Earnings from — Disney, UPS, Palantir see breakdowns below
US Markets 🇺🇸
Consumer prices rose by 3.2% annually in July, picking up for the first time in 13 months. Excluding food & energy, Core CPI fell to a rate of 4.7% for the year, in-line with estimates and down from 4.8% seen in June.
Wholesale price inflation comes in hotter than expected as the Producer Price Index (PPI) rose 0.8% for the year (est. 0.7% and prev. 0.2%). Excluding food and energy, Core PPI rose 2.4% for the year (est 2.3% and prev 2.4%).
Moody’s cuts ratings of 10 U.S. banks including M&T Bank, Pinnacle Financial, and Webster Financial. Other major lenders like Bank of New York Mellon, U.S. Bancorp, and State Street are now being reviewed for a potential downgrade.
Credit card balances exceed $1T for first time in history as consumers’ debt load increased by $45B during the second quarter. 30-day delinquencies rose to 7.2% during the quarter, the highest level since Q1 of 2012.
Disney’s ESPN launches a new sportsbook in partnership with Penn. As part of the deal, Penn will pay ESPN $1.5B in cash over 10 years and will issue ESPN $500M in warrants to buy ~31.8M PENN 0.00%↑ shares.
Disney+ hikes the price of its streaming plans by 20 - 27% bringing the ad-free tier of Disney+ to $13.99/mo while also hiking the no-ad version of Hulu by 20%. CEO Bob Iger acknowledged that Disney faces a “challenging environment”.
Tesla CFO Zach Kirkhorn steps down but will stay on at Tesla until the end of the year to help with the transition. Tesla has appointed chief accounting officer Vaibhav Taneja to take over as CFO and will hold both roles concurrently.
Target is rolling out Starbucks curbside pickup across the country in a bid to jolt sales as shoppers spend more on experiences and buy fewer discretionary items. Target reports earnings this week on Wednesday.
Rest of World 🌏
China reports double-digit plunge in exports and imports as domestic and international demand continues to decline. Exports fell by 14.5% in July from a year ago, while imports dropped by 12.4% in U.S. dollar terms.
Biden bans certain U.S. tech investments in China in areas such as semiconductors, microelectronics, quantum, and certain AI systems. The government will also require notification in other tech sectors.
China slips into deflationary territory, a warning sign for the world economy. Chinese consumer prices fell 0.3% in July compared with a year earlier as youth unemployment has hit record highs and the housing market remains weak.
Italian government surprises markets with windfall tax that will put a 40% levy on banks’ excess profits derived from higher interest rates. Citi estimates it will be equal to ~19% of the banking systems’ net income for the year.
UK economy posts surprise second-quarter growth as expenditure in household consumption, along with manufacturing output, were key growth drivers. Economists had expected to flatline after growing 0.1% in Q1.
Oil giant Saudi Aramco sees profits drop nearly 40% amid a decline in hydrocarbon prices. “Despite the economic headwinds, we see signals that global demand remains resilient,” said Aramco CEO Amin Nasser.
Tech ⚡
PayPal launches its own stablecoin called PYUSD becoming the first major U.S. financial institution to launch a dollar-backed digital asset. The token is redeemable for dollars and backed by deposits, short-term treasuries, and cash.
Nvidia reveals its new “GH200” A.I. chip and says the costs of running LLMs will ‘drop significantly’. The GH200 has the same GPU as the H100, but pairs it with 141GB of cutting-edge memory, and a 72-core ARM central processor.
Zoom trains AI models using customer data such as conversation audio, video, and chat, when given user consent. In June, Zoom launched two new generative AI features — a meeting summary tool and a tool for composing chat messages.
Musk's Neuralink raises $280 million in funding led by Peter Thiel's Founders Fund, months after securing approval for its first human clinical trial. In June, Reuters reported that the company was valued at about $5 billion.
Wegovy cuts the risk of heart attack or stroke by 20%, data from Novo Nordisk’s “SELECT” trial shows. The results were seen as a major boost for the firm’s hopes of moving beyond Wegovy’s image as a “vanity drug.”
WeWork raised "substantial doubt" about its future existence causing WE 0.00%↑ shares to plunge nearly 40% following the announcement. WeWork once had a valuation of $47B but traded for as low as $280M this week.
Earnings Reports 💰
See other breakdowns on our Twitter page.
Weekly Poll 🗳️
Week Ahead 📅
Monday
Japan - GDP Growth (Q2)🇯🇵
China - Industrial Production (JUL)🇨🇳
Earnings Reports: Monday💰
Tuesday
US - Retail Sales (JUL)🇺🇸
US - NY Empire Manufacturing Index (AUG)🇺🇸
UK - Unemployment Report (JUN)🇬🇧
Europe - ZEW Economic Sentiment (AUG)🇪🇺
Earnings Reports: Home Depot, JD.com, Nu Holdings, Sea, CAVA, Dlocal💰
Wednesday
US - Building Permits (JUL)🇺🇸
US - Housing Starts (JUL)🇺🇸
US - Industrial Production (JUL)🇺🇸
UK - CPI Inflation (JUL)🇬🇧
Europe - GDP Growth (Q2)🇪🇺
Earnings Reports: Tecent, Cisco, Target💰
Thursday
US - Jobless Claims 🇺🇸
US - Philly Fed Manufacturing Index (AUG)🇺🇸
Japan - National Core CPI (JUL)🇯🇵
Earnings Reports: Walmart, Applied Materials, Adyen, Bill.com💰
Friday
UK - Retail Sales (JUL)🇬🇧
Europe - CPI Inflation (JUL)🇪🇺
Earnings Reports: Deere&Co, Palo Alto Networks, Xpeng💰
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