Fixed Income Market Overview
Treasury yields fell on Monday as investors moved to safer assets amid a global stock market sell-off driven by U.S. recession fears. The 10-year Treasury yield dropped 3 basis points to 3.763%, and the 2-year Treasury yield was nearly unchanged at 3.867%. Despite yields rising slightly after positive U.S. services sector data, the markets remained tense following weak economic reports last week, including a disappointing July jobs report and rising unemployment. Investors are now pricing in a high chance of a 50 basis-point rate cut by the Federal Reserve in September. Global markets, including Japan’s Nikkei 225 and European stocks, also experienced significant declines.
Europe stocks close 2.2% lower amid global downturn as volatility index spikes to Covid-era high.
Novo Nordisk spends record amounts on research to fend off weight-loss rivals.
U.S. crude oil falls to $73 per barrel as market sells off on recession fears.
US banks tumble as weak economic data sparks recession fears.
Japan’s Nikkei sees biggest rout since 1987 Black Monday.
Major Indicies
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DJIA | 38,703.27 | -1,033.99 | -2.60%↓ |
| NASDAQ | 17,895.15 | -545.70 | -2.96%↓ |
| S&P 500 | 5,186.33 | -160.23 | -3.00%↓ |
| FTSE 100 | 8,008.23 | -166.48 | -2.03%↓ |
| SX5E | 4,571.60 | -67.10 | -1.44%↓ |
| NIKKEI | 31,458.42 | -4,451.28 | -12.39%↓ |
| HSI | 16,698.36 | -247.15 | -1.46%↓ |
| VIX | 38.57 | 15.18 | 64.90%↑ |
Bonds
| Name | Yeild | CHG |
|---|---|---|
| US 10-YR | 3.79% | -0.06 |
| US 30-YR | 4.07% | -0.04 |
| US 5-YR | 3.64% | 0.07 |
| JPN 10-YR | 0.79% | -0.11 |
| UK 10-YR | 3.63% | -0.05 |
Futures & Commodities
| Name | Last | Change | %Change |
|---|---|---|---|
| WTI CRUDE | 72.94 | -0.58 | -0.79%↓ |
| NAT GAS | 1.94 | -0.02 | -1.27%↓ |
| GOLD | 2,410.79 | -32.45 | -1.33%↓ |
| SILVER | 27.26 | -1.29 | -4.54%↑ |
| COPPER | 3.99 | -0.10 | -2.54%↑ |
Equity Market Overview
Berkshire Hathaway
Warren Buffett shocked investors by cutting his Apple stake by nearly half, leading to a significant drop in Apple’s stock amid a global market sell-off. Berkshire Hathaway’s filing revealed the Apple holding was valued at $84.2 billion at the end of Q2, indicating a 49% reduction. Apple shares fell over 5% on Monday, driven by concerns of an economic slowdown. Buffett’s massive selling spree included over $75 billion in equities in Q2, raising Berkshire’s cash reserves to a record $277 billion. While tax considerations initially motivated the selloff, the scale suggests additional factors at play. Apple, previously Berkshire’s largest holding, once constituted half its equity portfolio.
Palantir
Palantir Technologies raised its annual revenue and profit forecast for the second time this year, driven by surging demand for its AI software services. Shares rose over 12% in extended trading, adding to a year-to-date gain of more than 39%. The company reported its largest ever quarterly profit and forecasted third-quarter sales above estimates. Palantir now expects annual revenue between $2.74 billion and $2.75 billion, and adjusted income from operations between $966 million and $974 million. The U.S. commercial business grew 55% to $159 million in the second quarter. Palantir recorded adjusted earnings of 9 cents per share, surpassing the 8 cents estimate.
Carlyle Group
Carlyle Group reported an 11.7% year-on year drop in second-quarter distributable earnings due to lower performance fees despite record management and transaction fees. Distributable earnings fell to $343 million from $389 million, translating to 78 cents per share, missing the Wall Street estimate of 83 cents. Carlyle’s assets under management rose 13% to $435 billion, and its fee-related earnings hit a record $273 million. Shares dropped 11.08% amid global market volatility and U.S. recession fears. Carlyle raised $12.4 billion, spent $4 billion on acquisitions, and retained $83 billion of unspent capital. The firm also announced the sale of Cogentrix Energy for $3 billion and a $10 billion student loan book acquisition with KKR.
