Non-farm payrolls trigger recession panic, US stocks plummet again, VIX surges 60% at one point, US Treasury bonds rise for seven consecutive sessions, RMB soars more than a thousand points

Escalating Recession Panic, Nasdaq Falls 2.38% Entering Correction Territory, Intel Plunges 26%, VIX Fear Index Surges Over 59%

On Friday, August 2nd, the non-farm data unexpectedly chilled, triggering market panic selling as the US recession alert sounded, leading to a collective sharp decline in US stock indices after a significant opening drop.

Closing as of:

Among the 11 sectors of the S&P 500 index, the Consumer Discretionary sector closed down 4.61% on the non-farm day, with Financials, Energy, and Industrials sectors falling by up to 2.42%, the Information Technology/Tech sector dropping by 1.99%, Telecom sector down by 1.92%, Materials sector down by 1.89%, while the Real Estate sector rose by 0.09%, Utilities sector by 0.14%, and Consumer Staples sector by 0.86%.

This week, the Consumer Discretionary sector accumulated a 4.28% decline, Tech sector down by 4.03%, Energy sector down by 3.74%, Financials sector down by 3.02%, Industrials sector down by 2.79%, Materials sector down by 1.39%, Healthcare sector up by 0.65%, Consumer Staples sector up by 1.16%, Telecom sector up by 1.26%, Real Estate sector up by 3.10%, Utilities sector up by 4.29%.

On Investment Research Strategies:

Bank of America strategist Michael Hartnett stated that with the increased possibility of a more severe recession in the US, investors should sell stocks at the first rate cut by the Federal Reserve. Hartnett pointed out that the ISM Manufacturing Index seems highly correlated with non-farm employment data directionally, with the index being the only time in prolonged contraction while non-farm employment remained positive growth during the period from 1984 to 1986.

The "Tech Seven Sisters" all declined except for Apple. Apple closed up by 0.69%, with revenue and profit exceeding expectations for six consecutive quarters, the only decline in the Greater China region; NVIDIA fell by 1.78% due to antitrust investigations by the US Department of Justice following complaints from competitors; Tesla fell by 4.24%; Amazon fell by 8.78%, with Q3 guidance disappointing, cloud demand flashing red under AI investment pressure, TD Cowen lowering Amazon's target price from $245 to $230; "Metaverse" Meta fell by 1.93%; Microsoft fell by 2.07%; Google Class A fell by 2.4%.

According to reports, hedge fund Elliott stated in a letter to investors that large-cap tech stocks, especially NVIDIA, are in a bubble. There are doubts about whether large tech companies will continue to purchase NVIDIA's graphics processors in large quantities, and artificial intelligence is "overhyped, with many applications not yet ready for the golden age."

According to the latest research from TechInsights' smartphone research team, global smartphone shipments are expected to increase by 7.6% year-on-year in the second quarter of 2024, reaching 290 million units. Samsung leads the global smartphone market with nearly 19% market share. Apple ranks second with a 15% market share. Xiaomi, vivo, and Transsion are among the top five

The market value of the seven technology giants has dropped by about $2.3 trillion from its historical peak.

Chip stocks are almost across the board. The Philadelphia Semiconductor Index fell by 5.18%; the industry ETF SOXX fell by 5.32%; NVIDIA's double long ETF fell by 4.14%.

TSMC's US stock fell by 5.26%, Arm Holdings fell by 6.63%, Qualcomm fell by 2.86%, Broadcom fell by 2.18%, AMD fell by 0.03%, KLA fell by 7.93%, ON Semiconductor fell by 5.49%, Micron Technology fell by 8.68%, hitting a low of 9.8% during the day, marking the worst intraday performance in the past four years. Applied Materials fell by 7.38%, ASML ADR fell by 8.41%, Intel fell by 26.06%.

It is worth mentioning that Intel's performance disappointed the market, falling by over 26%, marking the largest drop since at least 1982, dragging down the Philadelphia Semiconductor Index, performing the worst among the 30 component stocks in the Philadelphia Semiconductor Index. HSBC downgraded Intel to Hold with a target price of $19.80, Raymond James downgraded Intel to Market Perform, Benchmark downgraded Intel from Buy to Hold, and S&P put Intel (INTC) on credit negative watchlist. Meanwhile, Deutsche Bank upgraded Qualcomm to Buy with a target price of $210.

AI concept stocks collectively fell. Serve Robotics, an AI robot delivery company held by NVIDIA, fell by 15.24%, Dell Technologies fell by over 5.6%, C3.ai fell by about 5.4%, SoundHound AI, an AI voice company held by NVIDIA, fell by 0.86%, BigBear.ai fell by 4.29%, Snowflake fell by 3.57%, AMD fell by 7.08%, CrowdStrike fell by 2.82%, Palantir fell by 5.14%, Oracle fell by 3.08%, while BullFrog AI rose by 5.54%.

Most Chinese concept stocks fell. The NASDAQ Golden Dragon China Index closed down by 1.84%. In ETFs, the China Internet Index ETF (KWEB) fell by 1.16%, and the China Technology Index ETF (CQQQ) fell by 0.8%.

Among popular Chinese concept stocks, in the "education concept stocks" category, TAL Education fell by 6.72%, New Oriental fell by 2.93%. In the "new energy vehicle" category, Nio fell by 0.25%, XPeng fell by 0.92%, Li Auto fell by 0.88%, ZEEKR fell by 0.52%; JD.com fell by 0.32%, Pinduoduo fell by 0.32%, Tencent Holdings (ADR) fell by 0.82%, Baidu fell by 2.23%, Alibaba fell by 0.68%, NetEase fell by 1.24%, while Bilibili rose by 1.77% US bank stocks generally fell. JP Morgan Chase fell by 4.245%, Bank of America fell by 6.36%, Citigroup fell by 7.14%, and Morgan Stanley fell by 5.81%.

Of note, Morgan Stanley was downgraded to a bearish outlook for the first time in 2024 by analysts. Analyst Mike Mayo of Bank of America downgraded Morgan Stanley's rating to underweight (previously neutral), citing pressure on certain businesses leading to its overvaluation (within the industry). The analyst believes that Morgan Stanley's wealth management division is facing headwinds.

Among other stocks with significant changes due to financial reports:

Chevron's Q2 net profit fell by 26% year-on-year, missing expectations. RBC lowered Chevron's target stock price from $190 to $180.

Exxon Mobil's Q2 profit exceeded expectations, with an expected buyback of over $19 billion in stocks this year. Following the acquisition of Pioneer Natural Resources in early May, the company achieved record high oil and gas production. Exxon Mobil's CEO stated that they see "very strong" oil demand. Global oil supply is keeping crude oil prices healthy.

"Retail investor favorite" AMC Theatres fell by 3.52%. The company's second-quarter revenue met expectations, with an adjusted loss per share of $0.43, better than expected. AMC's stock rose by 3.21% in after-hours trading.

Coinbase fell by 3.86%. The company's Q2 revenue grew by 105% year-on-year but decreased by 11% quarter-on-quarter. Q2 net profit was $36 million, down by 97% quarter-on-quarter, compared to a net loss of $97 million in the same period last year. Jefferies raised Coinbase's target price from $215 to $245 and maintained a "hold" rating. Bank of America Securities lowered Coinbase's price target from $263 to $246.

Among stocks with significant fluctuations:

Social media stock Snap fell by 26.93%. The company's second-quarter revenue and third-quarter performance outlook were below market expectations. HSBC downgraded Snap to hold with a target price of $11. TD Cowen lowered Snap's target price from $14 to $11.

Argentine e-commerce company Mercadolibre (MELI) rose by 10.59% to $1776.14, closing with a market value exceeding $90 billion, surpassing Brazilian oil company Petrobras to become the most valuable company in Latin America.

The cooling US labor market may trigger a global economic slowdown. Investors' concerns about the risk of economic recession have fueled bets on rate cuts in the UK and Europe, leading to a sell-off in European stocks on Friday, following Thursday's decline. The European technology sector plummeted, with stock indices in Germany, France, Italy, the UK, the Netherlands, and Spain all falling:

The pan-European Stoxx 600 index fell by 2.73% to 497.85 points. After reaching a record high of 524.71 points on May 15, it has retraced nearly 5.12%. Over the past two trading days, it has fallen by 3.92%, recently breaking below the 50-day moving average and the 100-day moving average, with a cumulative decline of 2.92% this week

Eurozone STOXX 50 index fell by 2.67% to 4638.70 points, dropping below the 200-day moving average (currently at 4742.48 points), approaching the closing levels of 4638.60 points on February 1st and 4403.08 points on January 17th, with a weekly decline of 4.60%.

In terms of sectors this week, STOXX 600 Banks index fell by 7.78%, Technology index dropped by 6.27%, and Real Estate index rose by 2.70%.

Germany's DAX 30 index fell by 2.33%, retracing more than 6.40% from its all-time closing high of 18869.36 points on May 15th, with a weekly decline of 4.11%. France's CAC 40 index fell by 1.61%, retracing over 11.99% from its closing high of 8239.99 points on May 15th, with a weekly decline of 3.54%.

Italy's FTSE MIB index fell by 2.55%, with a weekly decline of 5.30%. UK's FTSE 100 index fell by 1.31%, with a weekly decline of 1.34%. Netherlands' AEX index fell by 3.11%, with a weekly decline of 3.06%, and Spain's IBEX 35 index fell by 1.67%, with a weekly decline of 4.42%.

Among the volatile individual stocks:
In the European technology sector, ASM International fell by 12.63%, ASML Holding fell by 11.18%, retracing over 25% from their historical highs, and BE Semiconductor Industries fell by 9.34%.

## Expectations of rate cuts surged on "Non-Farm Payrolls Day", "US Hard Landing" becomes the preferred safe haven, with US Treasury bonds rising for seven consecutive days

The yield on Germany's 10-year bund benchmark fell by 7.0 basis points to 2.174%, with a weekly decline of 23.4 basis points. The 2-year German bund yield fell by 10.2 basis points to 2.352%, with a weekly decline of 27.0 basis points.

France's 10-year government bond yield fell by 2.6 basis points, with a weekly decline of 14.8 basis points. Italy's 10-year government bond yield fell by 1.4 basis points, with a weekly decline of 13.3 basis points. Spain's 10-year government bond yield fell by 3.0 basis points, with a weekly decline of 17.2 basis points. Greece's 10-year government bond yield fell by 0.6 basis points, with a weekly decline of 13.4 basis points. The 2-year UK gilt yield fell by 11.8 basis points, with a weekly decline of 31.5 basis points. The UK's 10-year government bond yield fell by 5.4 basis points, with a weekly decline of 27.2 basis points.

## Rising risk of a hard landing for the US economy, investors bearish on oil demand outlook, US oil falls over 3% to a two-month low

WTI September crude oil futures fell by $2.79, a decrease of nearly 3.66%, to $73.52 per barrel. The weekly decline was 4.72%. Brent October crude oil futures fell by $2.71, a decrease of nearly 3.41%, to $76.81 per barrel.

This week's cumulative decline is 5.32%.

WTI and Brent crude oil rose by nearly 1.3% and 1.2% respectively in the early trading session of European stocks, breaking through $77 and $80 respectively, but both saw significant declines, hitting daily lows around 2:00 AM Beijing time. WTI and Brent crude oil fell by nearly 4.4% and 3.9% respectively, breaking through $73 and approaching $76.

Due to economic recession fears, concerns about weak oil demand have intensified, overshadowing the geopolitical risk premium in the Middle East, causing crude oil prices to fall to a two-month low.

Analysts say that despite escalating tensions in the Middle East, WTI fell by over 4.7% this week, as weak economic growth in major economies may suppress oil demand, outweighing concerns about supply disruptions caused by the Middle East tensions. The largest oil-importing countries globally, as well as weakening manufacturing data in most Asian and European countries, have increased the risks of global economic slowdown, putting pressure on oil consumption. Asia's crude oil imports in July fell to the lowest level in two years. Meanwhile, the OPEC+ meeting held on Thursday maintained its oil production policy unchanged and plans to gradually phase out production cuts starting from October.

U.S. natural gas futures for September fell by 0.05% to $1.9670 per million British thermal units. This week's cumulative decline is 1.94%. Investors are focusing on supply risks, driving European natural gas futures to rise by over 14% this week, marking the largest weekly increase since April. The TTF Dutch natural gas futures, a European benchmark, rose by 0.27% to €37.000 per megawatt-hour, with a weekly increase of 14.02%. ICE UK natural gas futures rose by 0.81% to 90.900 pence per therm, with a cumulative increase of 13.23% this week.

Offshore Renminbi Surges Over 1000 Points Intraday

Offshore Renminbi (CNH) against the U.S. dollar rose by 873 points in the closing session to 7.1638 yuan, trading overall in the range of 7.2521-7.1437 yuan during the session. Offshore Renminbi surged over 1000 points intraday, expanding by over 1.4% to 7.1437 yuan, reaching a new high since January.

As the Middle East geopolitical conflict escalates, Israeli assets plummet, with the Israeli Shekel falling for the fifth consecutive day, marking the longest decline since October 2023.

According to coinglass data, in the past 24 hours, nearly 90,000 people were liquidated in the cryptocurrency market, with a total liquidation amount of $255 million.

"Non-Farm Payrolls Day" Economic Recession Deepens, Weakening Dollar Boosts Gold to Rise Over 1%, Later Turns Lower on Profit-Taking, But Still Rises by Over 2.3% This Week

The weakening dollar boosted gold to rise during the session, but it fell back towards the end. COMEX December gold futures fell slightly by 0.06% to $2479.3 per ounce, closer to its historical high, while COMEX September silver futures rose by 0.45% to $28.605 per ounce Gold and silver rose before the U.S. stock market opened. After the release of U.S. non-farm payroll data at 8:30 pm Beijing time, gold hit a daily high, rising nearly 1.3% to nearly $2500, while silver rose by as much as 2.5% to break through the $29 mark. However, both gold and silver prices plunged in early U.S. trading, with gold falling by over 1.4% to nearly $2400, and silver, which has industrial metal properties, dropping by over 2% to break through the $28 mark.

Gold prices tested historical highs again on Friday before sharply retreating, but closed higher for the week.

Analysts say that the earlier rise in gold prices was due to the significantly lower-than-expected U.S. non-farm payroll data, which increased rate cut expectations. The weakening of the U.S. dollar and bond yields together boosted gold prices by over 1%. Additionally, this week, tensions in the Middle East led to increased safe-haven demand and rate cut expectations from the Federal Reserve, pushing gold prices up by 1.8%.

The subsequent fall in gold prices was due to profit-taking and some pullback from the high levels. Alex Ebkarian, Chief Operating Officer of Allegiance Gold, stated that from a fundamental perspective, the upside potential far outweighs the downside risks.

Most London industrial base metals closed lower. Dr. Copper, an economic barometer, rose by $3 to $9056 per ton, with a cumulative decline of over 0.60% for the week. London aluminum fell by over 1.39% to $2264 per ton. London zinc fell by over 1.99% to $2653 per ton. London lead fell by 1.89% to $2023 per ton, with a cumulative decline of over 2.17% for the week. London nickel fell by $9 to $16273 per ton, with a cumulative increase of over 3.03% for the week. London tin rose by $294, up by over 0.98% to $30188 per ton, with a cumulative increase of over 2.08% for the week