Traders Market Weekly: Central Banks and Big Tech Calibrations

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    Total housing starts declined 8.0% month-over-month to a seasonally adjusted annual rate of 1.434 million (consensus 1.475 million), with single-family starts down in all regions except the West (+4.6%), following a downwardly revised 1.559 million (from 1.631 million) for May.

    Building permits decreased 3.7% month-over-month to a seasonally adjusted annual rate of 1.440 million (consensus 1.472 million), with permits for single-family units flat to positive in all regions, following an upwardly revised 1.496 million (from 1.491 million) for May.

    The key takeaway from the report is that higher financing costs are creating headwinds for builders and preventing activity from being stronger in a supply-constrained housing market.

    Treasury yields pulled back after the data.

    The 2-yr note yield is down four basis points to 4.73% and the 10-yr note yield is down five basis points to 3.74%.


    Netflix Q2 23 Earnings:

    Adj EPS: $3.29 Beat (Est $2.90)
    Revenue: $8.19B Missed (Est $8.30B)
    Streaming Paid Memberships 238.4m Beat Est. 234.5m
    5.89m net additions v 2.1m expected
    Sees Q3 EPS $3.52, Est. $3.23
    BUT Sees Q3 Rev. $8.52b v Est. $8.67b

    $NFLX $457.00 -20.59 (-4.31%) AH


    Tesla Q2 23 Earnings:

    Adj Eps 91c Beat Est. 81c
    Rev. $24.9b Beat Est. $24.51b
    Free Cash Flow $1.01b Miss Est. $2.18b
    Q2 Gross Margin 18.2% Miss Est. 18.8%
    9.6% operating margin
    Still Sees FY Production 1.80m Vehicles, Est. 1.88m

    $TSLA $292.10 +0.84 (+0.29%) After hours


    United Airlines Q2 23 Earnings:

    Adj EPS $5.03 Beat Est. $3.99
    Oper Revenue $14.18b Beat Est. $13.9b
    Passenger Revenue $13.00b Beat Est. $12.71b
    Rev. Passenger Miles 63.5b Beat Est. 62.7b

    $UAL 56.10 +1.30 (+2.37%) After hours


    U.S. Treasuries curve continues to diverge, shorter-dated Treasuries near their lowest levels of the day while the long bond outperforms, trading just below highs. The 30-yr bond is holding highs after the completion of today’s $12 bln 20-yr bond reopening, which met decent demand but nothing spectacular. The sale drew a high yield of 4.036%, which tailed the when-issued yield by a tenth of a basis point. However, the bid-to-cover ratio (2.68x) was above average (2.62x) while indirect takedown (68.8%) was shy of average (72.0%). Equities have backtracked from their starting highs with the S&P 500 narrowing its gain to 0.2% while the Nasdaq (-0.1%) is now down slightly. The desk gave a C- rating on the auction.

    Strong Domestic Demand in 20-year Bond Auction Reflecting Curve Divergence


    Steel Dynamics Q2 23 Earning
    EPS $4.81, Est. $4.76
    Net Sales $5.1b, Est. $5.47b

    $STLD 103.03 -2.27 (-2.16%) After hours


    ^^^ +1s and thank you for excellent earnings updates after hours

    Dow 35,061.21 109.28 0.31%
    S&P 500 4,565.72 10.74 0.24%
    Nasdaq 14,358.02 4.38 0.03%
    VIX 13.76 0.46 3.46%
    Gold 1,980.60 -0.20 -0.01%
    Oil 75.32 -0.43 -0.57%

    Equities may still be soaring too high
    And one must be “cautious” or those “golden wings of WAX may melt”


    Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note.

    Japan’s Nikkei: -1.3%,
    Hong Kong’s Hang Seng: -0.2%,
    China’s Shanghai Composite: -0.9%,
    India’s Sensex: +0.7%,
    South Korea’s Kospi: -0.3%,
    Australia’s ASX All Ordinaries: +0.1%.


    Japan’s adjusted June trade deficit JPY550 bln (expected deficit of JPY900 bln; last deficit of JPY780 bln).
    June Imports -12.9% yr/yr (expected -11.3%; last -9.8%)
    Exports 1.5% yr/yr (expected 2.2%; last 0.6%)


    Australia reported better than expected employment figures for June, but ANZ maintained its view that the Reserve Bank of Australia is done raising rates.

    Australia’s June Employment Change 32,600 (expected 15,000; last 76,600) and full employment change 39,300 (last 61,700). June Unemployment Rate 3.5% (expected 3.6%; last 3.5%) and June Participation Rate 66.8% (expected 66.9%; last 66.9%)


    The People’s Bank of China made no changes to its one-year and five-year loan prime rates. The central bank also announced an increase to the cross-border macro ratio, opening the door to increased overseas borrowing by Chinese companies.

    China State Council repeated that it will work to “optimize conditions” for the private economy.

    Hong Kong’s June CPI 0.2% m/m (last -0.3%); 1.9% yr/yr, as expected (last 2.0%)


    Major European indices trade on a higher note with the U.K.’s FTSE (+0.6%) and Spain’s IBEX (+0.6%) showing relative strength.

    STOXX Europe 600: +0.2%,
    Germany’s DAX: +0.2%,
    U.K.’s FTSE 100: +0.6%,
    France’s CAC 40: +0.4%,
    Italy’s FTSE MIB: +0.2%,
    Spain’s IBEX 35: +0.6%.


    Eurozone’s May Current Account surplus EUR9.1 bln (expected surplus of EUR2.5 bln; last surplus of EUR3.8 bln)

    European Central Bank policymaker Stournaras said that another 25-bps rate increase would be sufficient, and that excessive tightening could hurt the economy.


    Germany’s June PPI -0.3% m/m (expected -0.4%; last -1.4%); 0.1% yr/yr (expected 0.0%; last 1.0%)

    France’s July Business Survey 100, as expected (last 100)

    Spain’s May trade deficit EUR3.11 bln (expected deficit of EUR6.99 bln; last deficit of EUR4.38 bln)

    Swiss June trade surplus CHF4.823 bln (expected surplus of CHF4.031 bln; last surplus of CHF5.442 bln)


    Bank of England policymaker Ramsden said that he sees a potential for increasing the pace of the central bank’s balance sheet reduction.
    EasyJet reported solid quarterly results and issued upbeat guidance due to strong booking trends.

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