Overnight US Stocks | Is the Fed's interest rate cut in September a certainty? The three major indexes fell, and US Treasury yields rose

According to the Wise Finance APP, on Thursday, the three major indexes fell, U.S. Treasury yields rose, and Philadelphia Fed President Harker explicitly expressed support for a rate cut in September. The 10-year U.S. Treasury yield rose by 8.6 basis points to 3.862%. The 2-year U.S. Treasury yield rose by 9.4 basis points to 4.016%.

[U.S. Stocks] At the close, the Dow fell by 177.71 points, or 0.43%, to 40712.78 points; the Nasdaq fell by 299.63 points, or 1.67%, to 17619.35 points; the S&P 500 fell by 50.21 points, or 0.89%, to 5570.64 points. NVIDIA (NVDA.US) fell by nearly 4%, Tesla (TSLA.US) fell by over 5%, Intel (INTC.US) fell by 6%. The Nasdaq Golden Dragon Index fell by 1.5%.

[European Stocks] The German DAX30 index rose by 36.50 points, or 0.20%, to 18488.25 points; the UK FTSE 100 index rose by 2.48 points, or 0.03%, to 8285.91 points; the French CAC40 index fell by 0.61 points, or 0.01%, to 7524.11 points; the Euro Stoxx 50 index rose by 0.17 points, or 0.00%, to 4885.45 points; the Spanish IBEX35 index rose by 45.05 points, or 0.41%, to 11159.95 points; the Italian FTSE MIB index rose by 8.59 points, or 0.03%, to 33321.00 points.

[Asia-Pacific Stock Markets] The Nikkei 225 index rose by 0.68%, the Indonesia Jakarta Composite Index fell by 0.87%, and the Vietnam VN30 index rose by 0.07%.

[Gold] COMEX December gold futures fell by 1.13% to $2518.8 per ounce; COMEX September silver futures fell by 2.08% to $28.920 per ounce.

[Cryptocurrency] Bitcoin fell by nearly 1% to $60582.1 per coin; Ethereum fell by 0.28% to $2623.71 per coin.

[Crude Oil] WTI October crude oil futures rose by $1.08, or 1.50%, to $73.01 per barrel; Brent October crude oil futures rose by $1.17, or about 1.54%, to $77.22 per barrel.

[Metals] London metals fell, with LME copper falling by over 1.40%, LME lead falling by over 1.53%, LME tin falling by about 1.16%, and LME nickel falling by over 1.81%.

[Macro News]

Initial jobless claims in the U.S. rose last week. The number of initial jobless claims in the U.S. increased slightly last week, but still indicated that the gradual cooling trend in the labor market remains unchanged. Data on Thursday showed that for the week ending August 17, initial jobless claims increased by 4,000 to 232,000, compared to market expectations of 230,000. The latest data should continue to alleviate concerns about a rapid deterioration in the labor market, which emerged for the first time after a significant slowdown in job growth in July. Federal Reserve officials stated that they are closely monitoring the labor market and are aware that waiting too long to cut rates could cause serious damage to the economy As of the week ending August 10, the number of continued jobless claims increased by 4,000 to 1.863 million.

US Existing Home Sales Increase for the First Time in Five Months. Existing home sales in the US increased for the first time in five months in July, indicating a stabilization in the real estate market as mortgage rates decline. Data released by the National Association of Realtors (NAR) on Thursday showed a 1.3% increase in contract signings in July compared to the previous month, the slowest growth since July 2010, with an annualized sales volume of 3.95 million units. Lawrence Yun, Chief Economist at NAR, stated, "Although home sales saw a slight increase, they remain sluggish. However, consumers now have more choices, and affordability is improving due to the decrease in interest rates." The NAR report revealed that the median sales price in July increased by 4.2% compared to the same period last year, reaching $422,600, the highest on record for July in NAR data.

Fed's Harker: Rate Cut Process Should Be Initiated as Long as Data Doesn't Surprise. Philadelphia Fed President Harker stated on Thursday that he supports a rate cut in September as long as the data meets his expectations. Harker said in an interview, "For me, if the data from now until then doesn't have any surprises, I think we need to start the rate cut process." He emphasized that the scale of any specific actions is less important than the overall magnitude of rate cuts, stating, "I think a slow and steady rate cut is the right approach." He mentioned that the business community he interacts with is calling for predictable actions and does not want rate cuts to mirror aggressive rate hikes in the spring of 2022.

Fed's Rosengren: Expects Rate Cuts to Begin Soon, Gradual Pace of Cuts Likely. Boston Fed President Rosengren expressed her expectation that the Fed will soon begin rate cuts, with a "gradual and orderly pace of rate cuts" likely to be appropriate. Rosengren stated in an interview, "The data will tell us what pace is reasonable. There is no predetermined path." "I think our overall situation is good. It is important to maintain this condition in the context of reducing inflation." The anticipated revisions to nonfarm payroll data are within expectations, with the unemployment rate remaining low. Rosengren noted that overall, the labor market is quite healthy, and maintaining this healthy labor market is crucial.

US Manufacturing Activity Contracts at Fastest Pace This Year in August. Due to further weakness in production, orders, and factory employment, US manufacturing activity contracted at the fastest pace this year in August. The August preliminary reading of the S&P Global Manufacturing PMI fell to 48, while service sector activity expanded at a robust pace, indicating the overall health of the largest component of the economy. The index measuring prices received by service providers dropped to the lowest level since the beginning of the year. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated, "Overall, inflation is continuing to slowly return to normal levels, with the economy facing risks of a slowdown amid imbalances." All five components of this month's manufacturing PMI weakened, with output seeing the largest decline in 14 months, orders contracting for the second consecutive month, and employment nearly stagnating. Additionally, finished goods inventories for manufacturers increased for the third consecutive month in the past four months, indicating an increased risk of production cuts amidst declining order volumes Economist El-Erian: The market is exaggerating the extent of the Fed rate cut. Traders currently expect the Fed to cut rates by 100 basis points by the end of the year. Economist Mohamed El-Erian stated that the market is exaggerating the possibility of a significant rate cut by the Fed before the end of the year: "In my view, the market has already priced in so many rate cuts, which is problematic." In recent days, traders in the derivatives market have solidified bets that the Fed will cut rates by up to 100 basis points by the end of the year, with a possible 25 or even 50 basis points cut in September. The minutes of the Fed's July meeting indicated that some officials believe a rate cut next month is possible, and the latest employment data shows that job growth is far weaker than previously reported, further indicating that a rate cut is almost certain. According to El-Erian, the Fed will cut rates by 75 basis points before the end of the year. He said, "There is a view that a soft landing policy needs to be achieved through a hard landing, and there needs to be some kind of reconciliation between the two. The market will adjust one day."

Pajit Investment: Finding a job in the United States is becoming increasingly difficult. Nancy Lazar and Dave Wigglesworth of Pajit Investment pointed out in a report that the number of initial jobless claims has risen from 228,000 to 232,000, stating, "The number of people looking for jobs in the United States is likely to expand due to increased economic pressure, as excess savings have disappeared, credit is difficult to obtain and costly. With the slowdown in hiring demand and a large number of people re-entering the labor market competing for jobs, the unemployed are finding it increasingly difficult to find work and seek wage growth." The cooling labor market is providing support for the Fed's rate cuts.

[Stock News]

Walmart (WMT.US) collaborates with Burger King to offer discounts to members. Walmart announced on Thursday that it has partnered with Burger King, a subsidiary of Restaurant Brands, to offer discount benefits to its member customers. The retail giant aims to enhance the attractiveness of its services to better compete with Amazon's Prime membership service. The company stated that Walmart members can enjoy discounts at Burger King, including a 25% discount on any amount order daily. In addition, starting from September, members can receive a free Whopper for every purchase at Burger King every three months. Walmart's subscription service Walmart Plus charges $12.95 per month or $98 per year, while its main competitor Amazon Prime charges $14.99 per month or $139 per year in the United States. Walmart Plus membership services include online and in-store benefits such as free delivery and Paramount+ streaming services.

Guo Mingchi: Apple (AAPL.US) significantly delays mass production of foldable MacBook. Renowned analyst Guo Mingchi stated in a recent post that the final size of Apple's foldable MacBook is set at 18.8 inches, with the 20.25-inch design being canceled. Due to technical challenges such as the display, the assembly and mass production time has been delayed from the first half of 2026 to the end of 2027 or 2028 Previously, some market participants were expecting Apple to launch a foldable iPad in 2025, but a current supply chain investigation shows that there is no visibility on the foldable iPad yet. It is also possible that some people are referring to the foldable MacBook as the foldable iPad.

【Major Bank Rating】

Investment bank Evercore ISI: Raised the target price of Walmart (WMT.US) from $78 to $80