Marcus Today Pre-Market Podcast – Friday 4th August

All three major US Indexes finished lower overnight after a choppy trading session as US bond yields hit nine-month highs and the dollar dipped following a US credit downgrade. Dow Jones fell 67 points (-0.19%). Dow at best up 66 points. Dow at worst down 160 points. S&P 500 posted its third straight decline, down 0.25% on track to break four-straight weekly gains. Tech under pressure as their rallies in July increased their already high sensitivity to surging treasury yields, NASDAQ down 0.1%. Treasury yields reached nine-month highs due to economic data suggesting easing inflation. The yield on 10Y Treasury notes rose by 10.7bps to 4.185%, while 30Y rates increased by 13.8bps to 4.302%. The rise in yields was attributed to investor positioning and market liquidity rather than fundamental factors. Meanwhile, the dollar remained steady against major currencies at $102.48, close to a one-month high. Among stocks, PayPal and Qualcomm tanked by 12.3% and 8.2%, respectively on poor corporate earnings.

• ASX to edge lower. SPI Futures down 7 points (-0.10%).

Apple Results: Apple -0.73% reported sales of $81.8bn, a 1.4% fall, but still higher than the expected $81.69bn. EPS rose 5% to $1.26, beating analyst estimates of $1.19. Despite iPhone sales slightly missing expectations, strong sales in China, with an 8% YoY growth, helped offset the global smartphone market decline. Apple's gross profit margin for the next quarter is expected to be between 44% to 45%, higher than the anticipated 43.4%. The company's research and development spending reached $22.61bn, driven partly by investments in AI. iPhone sales in China grew by "double digits," and services revenue reached $21.21bn with a record number of 1bn subscribers. The wearables business had revenue of $8.28bn. Mac and iPad sales were $6.84bn and $5.79bn, respectively.

• Russell 2000 -0.28%
• US ISM Services PMI fell to 52.7 from June's 53.9, below the forecast of 53, signalling a slowdown in services growth due to smaller increases in business activity/production.
• The number of Americans filing for unemployment benefits rose by 6k to 227k in the week ending July 29th, in line with expectations. Continuing claims increased by 21k to 1.7m during the same period, also meeting expectations.
• Gold was flat overnight, sitting at a 3-week low.
• Tin rose 2.76% as turmoil in Myanmar reduces supply.
• Copper +1.33%, Nickel +0.21%, Aluminium +0.75%, Zinc +0.7%, Lead +0.26%
• WTI and Brent gained 2.59% and 2.18% as Saudi Arabia and Russia maintain tight supplies.
• 10Y Bond Yields mixed: US 4.18%, Australia 4.13%, and Germany 2.57%.

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