On the 10th local time, the three major U.S. stock indexes closed up slightly. Among them, the Dow rose 0.62%, the S&P 500 rose 0.24%, and the Nasdaq rose 0.18%.
In terms of individual stocks, Facebook's parent company Meta rose 1.23%, and its market value surpassed that of "stock god" Buffett's Berkshire Hathaway. According to data tracking site Quiver Quantitative, Meta's new app Threads has surpassed 100 million registrations in just five days. Evercore ISI, a well-known Wall Street organization, reiterated its rating on Meta outperforming the market, with a target price of $350, a nearly 20% increase from Monday's closing price.
On the news side, the US June CPI data will be released on Wednesday, and this week will usher in a major test of the earnings season. The Conference Board Employment Trend Index (ETI) in June was 114.31. Selcuk Eren, senior economist at the Conference Board, said the ETI had fallen for two straight months, pointing to slower job growth in the coming months.
Many Fed officials "voiced" on Monday. Michael Barr, vice chairman of the Federal Reserve for financial supervision, said, "Inflation is too high now, and there is still work to be done." San Francisco Fed President Daly believes, "We may need to raise interest rates a few more times this year." Cleveland Fed President Mester believes that "in addition to raising interest rates, it needs to be maintained at the peak for a period of time." Atlanta Fed President Bostic emphasized, "If inflation expectations lose anchor, further interest rate measures may be needed."
In addition, "stock god" Buffett also has the latest action. On July 10 local time, Buffett's Berkshire Hathaway Power Company (BHE GT&S) announced that it had signed an agreement to purchase 50% of the limited partnership shares in Cove Point's liquefied natural gas and liquefied petroleum gas business held by Dominion Energy.
U.S. stocks closed slightly higher this week, CPI joined hands with the earnings season
On the 10th local time, the three major U.S. stock indexes closed up slightly. At the close, the Dow rose 0.62% to 33944.40 points; the S&P 500 rose 0.24% to 4409.53 points; the Nasdaq rose 0.18% to 13685.48 points.
In terms of macroeconomics, US wholesale sales in May fell by 0.2% month-on-month, expected to rise by 0.30%, and the previous value was revised to 0%.
In June, the Conference Board Employment Trend Index (ETI) was 114.31, the previous value was revised to 115.53. Selcuk Eren, senior economist at the Conference Board, said the ETI had fallen for two straight months, pointing to slower job growth in the coming months. Although the index has been on a downward trend since March 2022, it is still quite high in the historical context. This suggests that the U.S. will continue to add jobs, albeit at a slower pace. Need to see a further drop in ETI before predicting if and when job growth turns negative.
Looking forward to this week, Wall Street traders will undoubtedly usher in the most critical moment before the July interest rate meeting. On the one hand, the high-profile U.S. CPI data for June will be released on Wednesday. On the other hand, the Federal Reserve will also enter the silence period before the interest rate decision this weekend. This week will be the final "voice" of Fed officials to influence the market Timing of interest rate pricing.
On Monday, Michael Barr, the Federal Reserve's vice chairman for financial regulation, said, "Inflation is too high right now, and there is still work to be done." San Francisco Fed President Daly believes, "We may need to raise interest rates a few more times this year." Cleveland Fed Chairman Mester believes that "in addition to raising interest rates, it needs to be maintained at the peak for a period of time." Atlanta Fed President Bostic emphasized, "If inflation expectations lose anchor, further interest rate measures may be needed."
It is worth mentioning that this week's upcoming U.S. CPI data may put the Fed in a slightly awkward position, because at a time when the market is fully pricing in the probability of a 25 basis point interest rate hike at the end of the month, the performance of this inflation data But it might be quite "amazing".
Industry insiders now generally estimate that the year-on-year increase in CPI in the United States is expected to fall further to 3.1% in June-this will be the smallest increase since March 2021, mainly due to the decline in gasoline prices. Year-on-year growth in the core CPI, which excludes volatile food and energy items, is expected to slow to 5%, the weakest since November 2021. Of course, that's still more than double the Fed's inflation target.
This week also ushers in the big test of earnings season. Nigel Green, chief executive of DeVere Group, said investors should expect heightened volatility in the coming weeks as the second-quarter earnings season approaches. "Markets are bracing for the worst earnings season since the end of the pandemic. There was a lot of negative guidance in last quarter's earnings. With a perfect storm of several major economic headwinds brewing, we're likely to see that narrative be dismissed. Proved to be correct."
Goldman Sachs equity strategist David Kostin said revenue may not grow this earnings season, but earnings corrections appear to have bottomed out. It advocates attaching importance to four major themes including artificial intelligence.
Morgan Stanley analyst Michael Wilson is one of the most pessimistic about U.S. stocks. He has been skeptical this year whether U.S. stocks can continue to rise. He believes that this earnings season will not promote a rebound in US stocks. Given rising stock valuations, rising interest rates and reduced liquidity, company guidance will matter more than usual this time around, and the "better than expected" argument may no longer hold water.
The total market value of Meta surpassed Berkshire Hathaway's Threads, and its users exceeded 100 million in less than 5 days
In terms of sectors, seven of the eleven major sectors of the S&P 500 rose and four fell. The industrials and medical sectors led the gains with gains of 1.39% and 0.81%, respectively, while the communications services and utilities sectors led the decline with losses of 0.92% and 0.42%, respectively.
Most of the large technology stocks fell, Google A, Amazon fell more than 2%, Apple, Microsoft, Tesla fell more than 1%, Nvidia fell slightly; Facebook's parent company Meta rose 1.23%, and its market value surpassed the "stock god" Buffett's Burke Hill Hathaway.
According to data tracking site Quiver Quantitative, Meta's new app Threads has surpassed 100 million registrations in just five days. In contrast, it took ChatGPT nearly two months to reach 100 million monthly users.
However, from the perspective of a social application, Threads still has many key functions missing. After this application was launched, the collective reaction of users was the most intense. Threads did not have an information flow homepage based on the attention list, but pushed a series of dynamics released by brands, Internet celebrities and celebrities through algorithms in a messy manner. In response, Adam Mosseri, the head of Instagram, also responded on Threads: We are doing it. At the same time, Threads does not yet have functions such as content retrieval, private messaging, topic/tag system, etc. In addition, Threads did not support the decentralized network protocol ActivityPub at the beginning of its launch.
Analysts at Evercore ISI, a well-known Wall Street organization, estimate that Threads, Meta Platforms' latest application, may have close to 200 million daily users, and its annual revenue will reach about $8 billion in the next two years. Data shows that by July 2022, Twitter will have 237.8 million users. The analysts, led by Mark Mahaney, said it is "too early to say how big or profitable Threads will be." However, they note that assuming a 50% incremental margin, "estimated $8 billion in revenue for the Threads platform Will bring incremental EPS of nearly $1.50, or add 6%-7% to Meta's EPS." Meta is one of Evercore's top picks, and the bank reiterated its outperform rating on Meta with a target price of $350 , up nearly 20% from Monday's closing price.
Most energy stocks rose, with Exxon Mobil and ConocoPhillips up more than 1%, while Chevron and Shell rose slightly. International oil prices fell on the 10th. By the end of the day, the price of light crude oil futures for August delivery on the New York Mercantile Exchange fell by US$0.87 to close at US$72.99 a barrel, a decrease of 1.18%; the price of London Brent crude oil futures for September delivery fell by US$0.78, It settled at $77.69 a barrel, down 0.99%.
Most of the popular Chinese concept stocks rose, the Ninth City rose by more than 25%, Weilai rose by nearly 8%, New Oriental rose by more than 5%, TAL rose by more than 2%, JD.com, Baidu, and Pinduoduo rose slightly; Dingdong Maicai fell by more than 2% 7%, Lixiang Automobile and Xiaopeng Automobile fell slightly.
European stocks are now at a historic "discount" Citi shouted: buy quickly
The three major European stock indexes rose across the board on the 10th. By the end of the day, the average price index of 100 stocks in the "Financial Times" of the London stock market was at 7273.79 points, up 0.23%; the CAC40 index of the Paris stock market in France was at 7143.69 points, up 0.45%; The index reported 15673.16 points, up 0.45%.
Citi strategists led by Beata Manthey said European stocks were the cheapest ever compared to U.S. equities. The bank adjusted its global asset allocation, they upgraded European stocks to "overweight" and downgraded U.S. stocks to "neutral". "European equities are again at a record discount and should benefit from a weaker dollar," Citi strategists wrote in a note on Monday.
While U.S. stocks have rallied this year, gains in European shares have stalled as concerns about rising interest rates have weighed on equities. Based on 12-month forward price-to-earnings ratios, the Stoxx Europe 600 is trading at a 36% discount to the S&P 500. The divergence between the two benchmark stock indexes is because the rise in U.S. stocks in the first half of the year was mainly driven by huge gains in technology giants such as Apple, Microsoft and Nvidia.
Along with this, Manthey and her team downgraded global information technology stocks. They expect big growth stocks to pull back, but said they would consider buying the dip.
Citi strategists also upgraded emerging market stocks to "overweight" and downgraded UK equities to "neutral," reflecting the LSE's lack of exposure to growth stocks, while a stronger pound could continue to be a drag.
Buffett increases his holdings of energy stocks again! $3.3 billion stake in natural gas company Cove Point to 75%
On July 10, local time, Buffett’s Berkshire Hathaway Power Company (BHE GT&S) announced that it had signed an agreement to purchase 50% of the limited partnership shares in Cove Point’s liquefied natural gas and liquefied petroleum gas business held by Dominion Energy . Subject to regulatory approvals, the purchased interest will be held by BHE GT&S. A subsidiary of BHE GT&S is also the current general partner and operator of the Cove Point natural gas pipeline and its liquefied natural gas terminal in Lusby, Maryland.
It is reported that the total value of the transaction is US$3.5 billion, including the transaction price (US$3.3 billion) and the expected income from the termination of related interest rate derivatives (approximately US$200 million), which is estimated to be about 50% of the non-controlling interest held by Dominion Energy in 2025. 10.8 times EBITDA of $325 million. Buying and selling will be done in the form of cash and cash realized from the liquidation of certain investments. Upon completion of the transaction, Berkshire Hathaway will own a 75% limited partnership interest in Cove Point LNG. A subsidiary of Brookfield Infrastructure Partners holds the remaining 25% limited partnership in Cove Point LNG.
BHE GT&S is an American interstate natural gas transmission and storage company headquartered in Richmond, Virginia, and is a direct subsidiary of Berkshire Hathaway Power Company. The company currently operates 5,400 miles of natural gas transmission pipelines in the eastern United States, 756 Bcf (billion cubic feet) of total natural gas storage capacity, including 420 Bcf of industrial natural gas capacity, and natural gas exploration and processing assets. BHE GT&S provides LNG solutions through Cove Point LNG, Pivotal LNG and other LNG processing and storage companies.