Fixed Income Market Overview
U.S. Treasury yields declined on Thursday as investors reviewed economic data and anticipated next week’s Federal Reserve meeting. The 10-year Treasury yield fell by 5 basis points to 4.234%, while the 2-year Treasury yield decreased slightly to 4.406%. Yields and prices move inversely, and one basis point equals 0.01%. Despite initial drops, yields rose slightly after a Commerce Department report indicated a stronger-than-expected GDP growth of 2.8% in Q2, compared to the forecasted 2.4%. Initial jobless claims matched expectations at 235,000. Conflicting economic signals emerged this week, with July’s manufacturing sector index falling below expectations. Key inflation figures from the personal consumption expenditures price index, the Fed’s preferred measure, are due Friday, potentially impacting the Fed’s upcoming monetary policy decisions. Markets expect rates to remain unchanged but seek guidance on future rate cuts.
US economy grew at 2.8% rate in second quarter.
Berkshire Hathaway dumps $2.3 billion worth of Bank of America shares.
Copper prices fall again on concerns about Chinese demand.
Global tech stocks sink as selloff spreads to Europe and Asia.
Oil prices fall as worries about Chinese economy grow after surprise rate cuts.
Major Indicies
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DJIA | 39,935.07 | 81.2 | +0.20 %↑ |
| NASDAQ | 18,830.58 | -201.81 | -1.06%↓ |
| S&P 500 | 5,399.22 | -27.91 | -0.51%↓ |
| FTSE 100 | 8,186.35 | 70.36 | +0.86%↑ |
| SX5E | 4,811.28 | 41.54 | 0.86%↑ |
| NIKKEI | 37,869.51 | -202.1 | -0.53%↓ |
| HSI | 17,004.97 | 16.34 | 0.10%↑ |
| VIX | 18.46 | 0.42 | +2.28 %↑ |
Bonds
| Name | Yeild | CHG |
|---|---|---|
| US 10-YR | 4.24% | 0.005 |
| US 30-YR | 4.48% | 0.007 |
| US 5-YR | 4.13% | 0.005 |
| JPN 10-YR | 1.06% | 0.008 |
| UK 10-YR | 3.91% | 0.001 |
Futures & Commodities
| Name | Last | Change | %Change |
|---|---|---|---|
| WTI CRUDE | 78.28 | 0.69 | +0.89%↑ |
| NAT GAS | 2.04 | -0.08 | -3.73%↓ |
| GOLD | 2,364.6 | -33.14 | -1.38%↓ |
| SILVER | 27.849 | -1.06 | -3.67%↓ |
| COPPER | 4.11 | 0.02 | +0.55%↑ |
Equity Market Overview
Unilever
Unilever beat first-half profit expectations due to resilient pricing, although sales growth fell short. Shares rose 6.8%, leading London’s FTSE 100 index. The company reported a 3.9% increase in Q2 underlying sales, below the expected 4.2%. It maintained its full-year sales growth forecast of 3%-5%, driven mainly by volume, and predicted an operating margin of at least 18%. Despite lower-than-expected price growth at 1%, volume sales exceeded estimates at 2.9%. Unilever’s underlying operating profit increased 17% to €6.1 billion, with a margin widening to 19.6%, but expects this to slow in the second half. CEO Hein Schumacher emphasized ongoing transformation efforts for higher performance.
LLoyds
Lloyds Banking Group reported a 14% fall in first-half pretax profit to £3.3 billion, slightly above forecasts. Tough trading conditions and rising costs led to a 3% drop in shares. Despite robust profits due to rising central bank interest rates, the slow economic recovery poses long-term challenges. Operating costs rose 7% to £4.7 billion. The bank maintained its net interest margin at 2.94% and left its performance guidance unchanged, projecting confidence in meeting targets through 2026. Lloyds announced a 15% increase in its interim dividend. The UK housing market remains resilient, supporting Lloyds’ earnings, with two expected Bank of England rate cuts this year.
AbbVie
AbbVie Inc. reported second-quarter adjusted EPS of $2.65, down 8.9% year over year, beating the consensus of $2.57. Net revenues reached $14.46 billion, up 4.3%, beating the consensus of $14.03 billion. The immunology portfolio generated $6.97 billion in sales, with Humira revenues at $2.81 billion (down 29.8%), Skyrizi sales at $2.73 billion (up 44.8%), and Rinvoq revenues at $1.43 billion (up 55.8%). Oncology product sales were $1.63 billion, up 10.5%, and neuroscience revenues were $2.16 billion, up 14.7%. AbbVie raised its 2024 adjusted EPS guidance to $10.71-$10.91. The company discontinued development of the Alzheimer’s drug ABBV-916. AbbVie’s stock fell 5.14% to $185.26.
