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At Tuesday's close, the Dow Jones (US30) Index was up 0.76%, while the S&P 500 (US500) Index was up 1.04%. The Nasdaq Technology Index (US100) closed positive 1.03%. US stocks recovered strongly on Tuesday, rebounding after a three-day sell-off. Dip buyers emerged yesterday, pushing stocks higher after Monday's sharp decline. The sharp rise in Japanese stocks today provided support for US stocks. All sectors were up, with real estate and technology leading the way. Japan's Nikkei Stock Index (JP225) rose more than 10% today as a weaker yen sparked a rally in Japanese exporters after the Bank of Japan (BoJ) said it will hold a trilateral meeting with the Ministry of Finance and the Financial Services Agency in Tokyo to discuss international markets.

Nvidia (NVDA) shares are up more than 5% after New Street Research upgraded the stock to "buy" from "neutral" with a $120 price target. Uber Technologies (UBER) is up more than 7% after reporting second-quarter gross orders of $39.95 billion, better than the consensus estimate of $39.70 billion Palantir Technologies (PLTR) is up more than 10% after reporting second-quarter revenue of $678.1 million, better than the consensus of $652.8 million, and raising its full-year revenue outlook

The US trade deficit narrowed to $73.1 billion in June from a revised $75.1 billion in May but was larger than expectations of $72.5 billion and a negative for second-quarter GDP. The market consensus expects second-quarter earnings for S&P 500 companies to rise 9% year-over-year. About half of the companies in the S&P 500 have already reported. According to Bloomberg data, most of the companies that reported beat consensus on earnings, but only 43% beat revenue expectations, the lowest in five years.

Equity markets in Europe traded mixed yesterday. Germany's DAX (DE40) rose by 0.09%, France's CAC 40 (FR40) closed down 0.27%, Spain's IBEX 35 (ES35) fell 0.32%, and the UK's FTSE 100 (UK100) closed positive 0.23%. Eurozone retail sales fell by 0.3% m/m in June, weaker than expectations of 0.1% m/m and the biggest decline in 6 months. German factory orders rose by 3.9% m/m in June, which was stronger than expectations of 0.5% m/m and was the largest increase in the last 6 months. Swaps discount the probability of a 25bp ECB rate cut at the September 12 meeting to 100%.

The US crude oil inventories rose by 4.495 million barrels in the week ended August 2, 2024, after declining by 4.495 million barrels in the previous week, data from API's weekly statistical bulletin showed. This marked the fifth consecutive week of decline in crude inventories and was below market expectations of a 0.85 million barrel increase.

Asian markets traded flat yesterday. Japan's Nikkei 225 (JP225) was up 10.23%, China's FTSE China A50 (CHA50) was down 0.66%, Hong Kong's Hang Seng (HK50) lost 0.31% by Tuesday's close, while Australia's ASX 200 (AU200) was positive 0.41%.

The offshore yuan slipped to 7.18 per dollar, falling short of the seven-month peak reached earlier this week, as traders reacted to the latest economic data from China. On Wednesday, China reported a trade surplus of $84.65 billion for July 2024, up from $80.22 billion in the same month a year earlier but short of market expectations of $99 billion. Exports rose 7% year-on-year in July, below the 9.7% growth estimate and the slowest growth since April. In contrast, imports posted the fastest growth rate since April, rising 7.2% from a year earlier and well ahead of the prognosis of 3.5% increase.

New Zealand's unemployment rate rose to 4.6% in the three months to June 2024, following an upwardly revised 4.4% in the previous quarter. This is the highest rate since the first quarter of 2021 and slightly below market expectations of 4.7%. This will increase the likelihood of an earlier rate cut by the RBNZ and will harm the kiwi.

• S&P 500 (US500) 5,240.03 +53.70 (+1.04%)
• Dow Jones (US30) 38,997.66 +294.39 (+0.76%)
• DAX (DE40) 17,354.32 +15.32 (+0.09%)
• FTSE 100 (UK100) 8,026.69 +18.46 (+0.23%)
• USD Index 102.96 +0.27 (+0.26%)
   

Important events today:

• – New Zealand Unemployment Rate (q/q) at 01:45 (GMT+3);
• – German Industrial Production (m/m) at 09:00 (GMT+3);
• – German Trade Balance (m/m) at 09:00 (GMT+3);
• – Canada Ivey PMI (m/m) at 17:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3).

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