📆 Friday, August 2
► After Wall Street had fallen sharply in the previous session, there was heavy selling on the global stock markets. Europe opened significantly weaker and the Euro Stoxx 600 was down 1.4 %. In Asia, and particularly in Japan, the losses were even greater, with Japanese equities recording their worst day since 2016. The Japanese Topix index plunged by 6.1% (!), while the broad regional MSCI Asia Pacific index slumped by 3.4%. The losses in Asia and Europe thus followed the losses in New York. The interest rate-sensitive two-year US government bond yield fell by more than 25 basis points this week, while gold approached a record high and jumped again in overnight trading (as we predicted).
► Futures contracts for the Nasdaq 100 are trading sharply lower pre-market, also due to additional headwinds from yesterday's weak tech earnings after the bell. While Amazon delivered overall, investors were again concerned about whether artificial intelligence revenues were worth the cost after Microsoft and Alphabet delivered similarly disappointing reports. However, Meta showed that AI can significantly accelerate revenue growth and help improve operating margins. Apple was optimistic, predicting that its new AI capabilities will boost iPhone upgrades in the coming months and help the company recover from the sales slump that has hit its China business particularly hard. As always, there will be winners and losers, the absolute AI hype, where everything to do with AI rises, is over for now in my opinion.
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