What Moved The Markets This Week 📈
Fitch Downgrades US Government Debt, LK-99 Superconductor Breakthrough, Saudi Arabia Extends Oil Production Cut, Coinbase To Launch Layer-2 "Base" Blockchain, and Apple + Amazon + Uber Earnings
Sunday Morning Markets
Trading Week 31, covering Monday, July 31 through Friday, August 4. Your weekly financial markets update, in less than 5 minutes.
The Week In Review ⏪
Fitch downgrades the US Government’s debt rating
Major superconductor breakthrough, but scientists are skeptical
Coinbase to launch its layer-2 “Base” blockchain this week
Major trucking firm Yellow shuts down operations
Ford says F150 Lightning demand increased 6x after price cuts
Bank of England raises rates 25bps, Brazil cuts rates 50bps
Saudi Arabia extends its oil production cut, despite slow growth
Economic data releases
Nonfarm payrolls +187K (est. 200K)
ADP job adds +324K (est. 175K)
Job openings 9.58M (est. 9.61M)
ISM manufacturing PMI 46.4 (est. 46.8)
Earnings from — Apple, Amazon, Uber see breakdowns below
US Markets 🇺🇸
Fitch downgrades U.S. long-term debt rating to AA+ from AAA. “The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said in its announcement.
Nonfarm payrolls expanded by 187,000 for July, slightly below the Dow Jones estimate of 200,000. However, average hourly earnings rose 0.4% for the month, and 4.4% for the year, both above expectations.
Job openings fall to the lowest level in more than two years as the JOLTS report showed the number of available positions dropped by 34K from 9.62M to 9.58M in June. Job openings peaked at 11.9M in May 2022.
US manufacturing shows signs of stabilizing in July. The ISM Manufacturing PMI edged up to 46.4 from 46.0 in June, which was the weakest reading since May 2020 as factory employment dropped to a three-year low.
Major trucking firm Yellow shuts down operations and plans to file for bankruptcy after failing to reorganize and refinance over a billion dollars in debt, the Teamsters Union said on Sunday.
Warner Bros. loses nearly 2M subscribers following the launch of its new streaming service “Max”. WBD 0.00%↑ reported they had 95.8M subscribers, below Wall Street expectations and a drop of ~2M from the previous quarter.
Ford says demand for F-150 Lightning rose 6x after announcing price cuts in July and said they plan to restart production. The factory will be able to produce EV trucks at an annual rate of 150K vehicles by the end of September.
Rest of World 🌏
Bank of England hikes rates by a quarter point to a 15-year high of 5.25%, marking the 14th consecutive increase as policymakers strive to rein in inflation. The committee voted 6-3 in favor of the quarter-point hike.
Eurozone Q2 GDP growth beats expectations as the regional economy grew 0.3% (exp. 0.2%). This follows an inflation report that showed consumer prices in the EU rose 5.3% in July, down from 5.5% in June.
China's services activity expands quickly in July supported by a jump in summer travel. The Caixin Services PMI rose to 54.1 in July from 53.9 in June, marking the seventh straight month of expansion.
Brazil eases its monetary policy with a rate cut of 50 basis points as the inflation outlook improves and economic activity loses steam. The central bank’s key policy rate in Brazil is now 13.25% as they signaled more cuts are to come.
Saudi Arabia extends its crude oil production cut of 1 million barrels per day into September. Saudi Arabia reported GDP growth of just 1.1% in the second quarter, as oil cuts and price drops bite into its revenues.
Tech ⚡
A potential superconductor breakthrough published by researchers in Korea says a material called LK-99 has superconducting properties at room temperature. Scientists from across the globe rush to peer review the work.
Alibaba launches its “Qwen-7B” AI model in a similar move to Meta which open-sourced its Llama-v2 model just weeks ago. The companies hope opening their models to third-party developers gives them an edge over competitors.
Coinbase sets public launch of ‘Base‘ layer 2 blockchain for Thursday of this week. The blockchain, built using Optimism's OP Stack, saw over $68 million worth of ether (ETH) bridged to the network this last weekend.
Federal Judge says cryptocurrencies are securities regardless of the context in which they are sold. The ruling allows the SEC to pursue securities charges against Terraform Labs and has broad ramifications for crypto legislation.
Walmart buys a $1.4B stake in Flipkart on the secondary market from Tiger Global as the retail giant adds to its position in the Indian e-commerce startup. The purchase from Walmart values Flipkart at $35B.
Amazon rolls out its virtual health clinic nationwide after years of trying to break into the industry. Amazon Clinic allows users to connect virtually with providers to treat common conditions like sinus infections, acne, and migraines.
Alphabet dumps 90% of its Robinhood stake as the company has struggled since its IPO. Google’s parent company had only 612K shares remaining after selling during Q2. They also reduced their positions in Duolingo & 23andMe.
Earnings Reports 💰
See other breakdowns on our Twitter page.
Weekly Poll 🗳️
Week Ahead 📅
Monday
US - Consumer Credit (JUN)🇺🇸
UK - Retail Sales (JUL)🇬🇧
Japan - Household Spending (JUN)🇯🇵
Earnings Reports: Berkshire, Palantir, Lucid💰
Tuesday
Germany - CPI Inflation (JUL)🇩🇪
China - CPI Inflation (JUL)🇨🇳
Earnings Reports: UPS, Datadog, Rivian, Upstart, Twilio💰
Wednesday
Canada - Building Permits (JUN)🇨🇦
Earnings Reports: Disney, TradeDesk, Sony, Roblox💰
Thursday
US - Jobless Claims 🇺🇸
US - CPI Inflation (JUL)🇺🇸
Earnings Reports: Novo Nordisk, Alibaba💰
Friday
US - PPI Inflation (JUL)🇺🇸
UK - GDP Growth (Q2)🇬🇧
Germany - CPI Inflation (JUL)🇩🇪
Want to partner with Sunday Morning Markets? Click here to inquire.