Fixed Income Market Overview
Treasury yields fell Thursday after Federal Reserve Chair Jerome Powell hinted at a potential rate cut in September and U.S. jobless claims surged. The 10-year Treasury yield dropped to 3.981%, its lowest since February 2, while the 2-year yield slipped to 4.156%. Powell indicated the economy is nearing a point where a rate reduction might be appropriate, dependent on economic data. Jobless claims rose to 249,000, above forecasts, and the ISM manufacturing index fell to 46.8, signaling economic contraction. Analysts suggest these signs indicate the Fed should start easing sooner rather than later. Meanwhile, the Bank of England cut its key interest rate to 5%, the first reduction in over four years. The decision was narrowly passed with a 5-4 vote, led by Governor Andrew Bailey. Following the announcement, U.K. gilt yields fell, with the 10-year gilt yield dropping to 3.880% and the 2-year gilt yield to 3.702%. The BOE also released its quarterly Monetary Policy Report, with the next policy meeting set for September 19.
BoE lowers rates to 5% in first cut since 2020.
Biogen lifts profit forecast, signals progress in turnaround effort.
U.S. crude oil breaks $78 per barrel as fears of war between Iran and Israel grow.
Moderna stock falls more than 15% as it slashes guidance on low EU sales, tough U.S.
Indexes tank as data paints a negative picture for the economy.
Major Indicies
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DJIA | 40,347.97 | -494.82 | -1.21%↓ |
| NASDAQ | 18,890.39 | -472.04 | -2.43%↓ |
| S&P 500 | 5,446.68 | -75.62 | -1.36%↓ |
| FTSE 100 | 8,283.36 | -84.62 | -1.01%↓ |
| SX5E | 4,765.72 | -107.22 | -2.20%↓ |
| NIKKEI | 38,126.33 | -975.49 | -2.49%↓ |
| HSI | 17304.96 | -39.64 | -0.22%↓ |
| VIX | 18.59 | 2.23 | 13.63%↑ |
Bonds
| Name | Yeild | CHG |
|---|---|---|
| US 10-YR | 3.97% | -0.02 |
| US 30-YR | 4.27% | -0.02 |
| US 5-YR | 3.83% | -0.01 |
| JPN 10-YR | 1.04% | -0.09 |
| UK 10-YR | 3.66% | -0.03 |
Futures & Commodities
| Name | Last | Change | %Change |
|---|---|---|---|
| WTI CRUDE | 76.31 | -1.6 | -2.05%↓ |
| NAT GAS | 1.96 | -0.06 | -3.34%↓ |
| GOLD | 2,446.26 | -1.34 | -0.05%↓ |
| SILVER | 28.52 | -0.48 | -1.67%↓ |
| COPPER | 4.08 | -0.09 | -2.25%↓ |
Equity Market Overview
Apple
Apple’s fiscal third-quarter earnings surpassed Wall Street expectations, with revenue rising 5% to $85.78 billion and EPS at $1.40. Key segments like iPhone, iPad, and Services all exceeded estimates, with iPad sales notably growing nearly 24%. Apple forecasted similar overall revenue growth for the current quarter and expected Services to maintain a 14% growth rate. The company reported $21.45 billion in net income, with a strong gross margin of 46.3%. Despite challenges in China, Apple remains optimistic about its long-term prospects. Apple spent $32 billion on dividends and share repurchases during the quarter.
Amazon
Amazon reported weaker-than-expected revenue for the second quarter, missing expectations with $147.98 billion compared to the forecasted $148.56 billion, and issued a disappointing forecast for the current period. Earnings per share beat estimates at $1.26 versus $1.03 expected. Amazon Web Services (AWS) revenue was $26.3 billion, slightly above estimates, while advertising revenue fell short at $12.8 billion. The company forecasted third-quarter revenue between $154 billion and $158.5 billion, below analyst expectations. Despite a 19% growth in AWS, it lags behind rivals Microsoft and Google. Amazon’s advertising revenue grew 20% but fell short of projections. Net income doubled to $13.5 billion due to significant cost-cutting.
Intel
Intel shares dropped 20% after announcing over 15% layoffs and a $10 billion cost-reduction plan. The company missed analysts’ expectations with earnings of 2 cents per share and $12.83 billion in revenue, reporting a $1.61 billion net loss for the quarter. Intel’s revenue from AI PC chips exceeded expectations but competitive pricing pressures affected overall performance. The company forecasts lower Q3 revenue between $12.5 billion and $13.5 billion, below analysts’ estimates. Intel plans strategic investments in AI and next-gen chips to improve margins by 2026, while reducing full-year capital expenditures by over 20%.
