Tonight’s Highlights | 48-Hour Critical Window Opens, Powell Faces ‘Consensus Crisis’

The financial markets have officially entered an intense and thrilling 48-hour battle.

 

A series of major financial data releases, Federal Reserve rate decisions, and earnings reports from corporate giants will unfold in sequence, with the highly uncertain tariff issue reaching a critical juncture.  

 

Remarkably, the U.S. stock market has seen no significant broad-market volatility for quite some time. Including Tuesday, the S&P 500 has recorded 24 consecutive trading days with moves under 1%.  

S&P 500 daily chart, source: TradingView

 

As of this writing, following the latest economic data release, Nasdaq 100 futures (2409 contract) rose 0.16%, S&P 500 futures gained 0.08%, and Dow futures edged up 0.02%.  

 

The latest data shows U.S. Q2 GDP growth at an annualized rate of 3%, well above the expected 2.4%.

 

However, the core PCE price index for Q2 also hit 2.5% annualized, exceeding forecasts. Additionally, the often-misleading “mini non-farm” ADP employment data for July added 104,000 jobs, surpassing the expected 75,000.  

 

Post-data, U.S. stock futures remained volatile, with the dollar and Treasury yields rising, signaling support for the view that the Fed is in no rush to cut rates.  

 

Undoubtedly, the main event remains the Federal Reserve rate decision.

 

While global investors know a rate cut isn’t on the table tonight, Fed Chair Powell may face the fiercest opposition of his tenure—with up to two Fed governors potentially voting against the decision.  

 

Nick Timiraos, dubbed the “Fed mouthpiece,” noted that the last time multiple governors expressed dissent via votes was back in 1993.

 

Worse still, the Fed’s dozen or so decision-makers are split into three camps: accelerating rate cuts, waiting for data to initiate cuts, and cautioning about summer inflation, favoring a “wait-and-see” approach.

For Powell, renowned for building consensus, tonight poses a severe test.  

 

After the close today, Microsoft and Meta will release their latest earnings. Combined with Apple and Google (Alphabet) reporting Thursday after the close, these four companies boast a total market cap of $11.78 trillion.  

 

Amid this packed schedule, the White House Digital Assets Working Group will release a highly anticipated policy report on Wednesday, outlining the U.S. government’s vision for reshaping cryptocurrency regulation.

 

Given the recent activity in U.S. stock “crypto” concept stocks, this report is expected to create fresh ripples.  

Other Market News  

Novo Nordisk Continues to Slide, New CEO Fails to Win Market Trust  

 

As of this writing, Novo Nordisk, which plummeted 21% yesterday, fell over 5% in pre-market trading. Analysts suggest new CEO Dusdar has failed to reassure investors, reportedly claiming “Wegovy is experiencing remarkable growth.”

 

Emily Fred, Barclays’ European pharma research head, said, “This has become a serious credibility issue. Their view of their problems isn’t as severe as the market’s.”  

 

Another Apple AI Talent Poached by Meta  

 

Renowned Apple leaker Mark Gurman reports that another AI researcher has left Apple for Meta, marking the fourth such move in a month.

 

Citing insiders, Gurman notes that multimodal AI researcher Bowen Zhang departed Apple last Friday and is expected to join Meta’s new “Superintelligence” team.  

 

LG Energy Solution Secures Major LFP Battery Deal, Allegedly with Tesla  

 

Korean battery maker LG Energy Solution announced Wednesday it has secured an LFP battery supply contract worth 59.442 trillion KRW (about $43 billion).

 

This represents 23.2% of its 2024 annual revenue (256 trillion KRW), though the client wasn’t disclosed. Industry sources later revealed the $43 billion deal is with Tesla.