US OPEN: Bonds keep climbing, semiconductors give back gains

US stocks extend losses at Thursday’s open. The biggest decliners are Nasdaq and Russell, with their futures down more than 1%. US500 and US30 are holding up better, with losses limited to around 0.8%.

• Sentiment at the start of the session is clearly negative. No prospects for de-escalation in the Persian Gulf, macroeconomic data, concerns about the stability of fiscal policy, and uncertainty around Oracle’s results are giving sellers additional momentum.
• Today’s declines are concentrated mainly in semiconductor stocks. Micron and Intel stand out, both down about 4% at the open. This may imply lower demand for risk, making assets in this sector less attractive despite no company-specific fundamental news.
• A potentially high-impact item, though still with low implied probability, is a reported “dividend” that the D. Trump administration would pay to “all adult Americans” if the Republican Party wins the midterm elections. The figure mentioned was USD 5,000, which would imply a hypothetical total of around USD 1 trillion.
• US 10-year Treasury yields are moving very close to the psychological 5% level (currently around 4.92%). Such a high level could prompt renewed intervention by the Treasury Department and/or the Fed.

Company news:

• Amazon (AMZN.US): A key player in e-commerce and AI announced an expansion of cooperation with OpenAI and integration with ChatGPT. According to a Bloomberg report, Amazon’s advertising algorithms will now be able to deliver personalized content to users of OpenAI’s platform. The stock is down about 0.5%.
• Coinbase (COIN.US): Morgan Stanley published a valuation report highlighting a range of complex issues and the company’s outlook. Despite the positive tone, the stock is down about 2%.
• Oracle (ORCL.US): The company reports earnings after today’s session close. Analyst consensus expects EPS to fall to around $1.75 in the latest quarter, and revenue to decline to about $19.15 billion. The stock is down about 2.5% ahead of the release.
• Blackstone (BX.US): The company acquired a majority stake in Sanha Logistics Park II, a dry logistics warehouse facility in South Korea. The investment is expected to be completed in 2028, cover 334,000 square meters, and cost about USD 450 million in total. The stock is down about 2%.
• Blackstone (BX.US): The company acquired a majority stake in Sanha Logistics Park II, a dry logistics warehouse facility in North Korea. The investment is expected to be completed in 2028 and cover 334,000 square meters, with a total cost of about USD 450 million. The stock is down about 2%.
• Apple (AAPL.US): The company unveiled its new product, a foldable iPhone model. This is the first presentation of its kind under the new CEO. The model is expected to cost USD 1,999. The stock is up about 1%.
• Rocket Lab (RCKT.US): Space stocks are continuing yesterday’s gains, driven mainly by Rocket Lab’s presentation of a new generation of orbital solar cells. The stock is up about 1.5%.

Technical analysis of US100 (D1)

After completing a double-top pattern and then extending the correction toward around 27,750, the price normalized and entered a narrow consolidation range between 30,000 and 28,900 points. Despite the decline, buyers remain relatively strong, quickly closing significant downside deviations from the regression line of recent months. In this context, the RSI (14) is around 45, implying moderate weakness, while the Williams %R is already at -73, implying significant oversold conditions. To assess the next direction, it will be key to watch the EMA100, which should act as strong support for buyers, and the level above 30,000, which is currently an equally strong resistance. Source: xStation5

Macroeconomic data

• The European Central Bank raised interest rates in line with market expectations. The futures market is currently pricing in about another 75 bps of hikes over the next 12 months.
• The initial jobless claims report showed a decline to 206k versus expectations of 205k.
• US PPI rose year over year above expectations, to 5.4% (5.3% expected). The monthly increase was 0.4%. Core producer prices rose 4.6% year over year and 0.2% month over month.
• US existing home sales fell to 3.98 million in August, a 2% monthly decline. The reading matched expectations.
• Two hours after the session opens, Atlanta Fed will publish its Q3 GDP estimate.
• Two and a half hours after the session opens, the EIA will publish US crude oil and distillate inventories. The market expects crude inventories to decline by 1.4 million barrels.