Rabu, 10 Juli 2024

S&P 500 Soars: Brace for Market Chaos!

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S&P 500 Soars: Brace for Market Chaos!

Plus: Powell's Warnings, Gold Rush, Real Estate Deals

Josh Belanger

Jul 10

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Good afternoon! Big news today as the S&P 500 hits a historic 5,600 mark, with Big Tech leading the charge. Meanwhile, Fed Chairman Powell is back on Capitol Hill, discussing inflation and rate-cuts with lawmakers.

Powell’s not ready to say he’s confident about inflation just yet, leaving traders on edge. Everyone’s also gearing up for Thursday’s key inflation data. Buckle up, it's going to be a wild ride!

Brace for Market Volatility

JPMorgan warns: Expect stock market swings this week.

Key trigger: Thursday's Consumer Price Index (CPI) report.

Predictions:
- >0.3% rise: S&P 500 may drop 2.5%.
- 0.15%-0.2% rise: S&P 500 could rise 1%.
- <0.1% rise: Potential 1.75% rally.

Why it matters: Tomorrow's CPI report could trigger profit-taking at all-time market highs. Big swings might impact your portfolio and investment strategy.

Gold ETF Inflows Rise

Gold ETFs see gains: June marked the second consecutive month of inflows for global gold-backed exchange-traded funds (ETFs), according to the World Gold Council (WGC).

Numbers: Total holdings rose by 18 tonnes to 3,106 tonnes. Inflows valued at $1.4 billion boosted assets under management (AUM) to $233 billion, despite a $400 million decline from May due to falling gold prices.
Regional Performance:
- North America: Saw mild losses for the second month, with an 8-tonne drop in holdings.
- Europe and Asia: Offset North American losses with 18-tonne and 7-tonne inflows respectively. European AUM reached $98 billion; Asian AUM hit $14 billion.

Why it matters: Despite recent gains, the first half of the year was the worst for global gold ETFs since 2013. However, lower yields and weaker currencies have increased gold's appeal. Recent geopolitical tensions and market conditions continue to influence investor behavior.

China’s $800B Green Energy Push

Massive Investment: China plans to invest over $800 billion in its electricity grid over the next six years to shift from coal to renewables.

Current Spending: $17 billion invested in the first four months of this year alone.
Comparison: U.S. invested $3.5 billion last October for grid projects.

Challenges: The grid struggles with distributing and transmitting renewable energy.

Suspensions: Over 100 counties suspended new small-scale solar projects.
Battery Storage: 12 provinces demand solar operators use batteries.

Why it matters: China aims to reach peak carbon emissions by 2030 and carbon neutrality by 2060. Grid improvements are crucial for these goals. However, rapid renewable energy growth outpaces grid upgrades, causing increased solar and wind power curtailment.

Distressed Investors Eye US Real Estate

Huge Opportunity: Investors see a prime chance to buy troubled US real estate as the commercial property market crashes.

Private Equity: 64% of $400B earmarked for property investment targets North America.
Office Values: Fell by nearly 25% last year, more than in Europe.

Why it matters: With nearly $1 trillion of commercial real estate debt maturing this year, rising defaults create opportunities for buyers. However, this strong US focus might delay recoveries in Europe and Asia, further stressing global markets.

Quick Hits:

Coffee Prices to Climb: Lavazza warns coffee prices will rise due to climate change, shipping issues, and new EU regulations. Coffee futures hit $4,844 per tonne, and prices may rise 10% next year.
Nonalcoholic Beer Boom: Athletic Brewing, the largest nonalcoholic beer brand in the US, doubled its valuation to $800 million. The company plans to expand with new capital and increase brewing capacity.
BP Earnings Hit: BP warns of weaker profits due to lower refining margins and a drop in oil trading performance. The company expects a $500-700 million hit to Q2 earnings.
Saudi Aramco's ICE Bet: Saudi Aramco invests €740 million in Horse Powertrain, betting that internal combustion engines (ICEs) will remain important despite the rise of electric vehicles.
X Growth Slows: User growth at Elon Musk's social media platform, X, has stalled amid new competition from Meta's Threads. X saw a slight increase in daily active users, while Threads reached 175 million monthly users.
Tesla vs. Lawyers: Tesla urges a judge to reject a $7 billion fee request from lawyers who challenged Elon Musk's pay package, calling it an "unjustifiable windfall."
Microsoft's Carbon Deal: Microsoft and Occidental Petroleum sign a record carbon credit deal, with Microsoft buying 500,000 permits to offset emissions from AI-driven energy use.

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