ADDX GO Market Morning Wrap - 15th Aug

Stock Market  

The U.S. stock market’s momentum toward new highs hit a reality check—the tariff-driven U.S. inflation wave has finally surfaced. The three major indices struggled throughout the day, ultimately closing nearly flat.

 

 

At close, the S&P 500 rose 0.03% to 6,468.54 points, the Nasdaq Composite fell 0.01% to 21,710.67 points, and the Dow Jones Industrial Average dropped 0.02% to 44,911.26 points. Theoretically, the S&P 500 set a new “all-time closing high,” but today was clearly not a celebratory scene.  

 

Intel surged over 7%, Amazon and Netflix rose more than 2%, while Microsoft, Nvidia, Google, and Meta saw modest gains. Tesla fell over 1%, and Apple dipped slightly. The “third pole” exchange MIAX closed up over 33% on its IPO debut day.

 

As background, the U.S. July Producer Price Index rose 0.9% month-over-month, the largest increase since the inflation peak in June 2022, against a market expectation of 0.2%. The year-over-year growth also reached 3.3%, significantly above the expected 2.5%.

 

Oxford Economics economist Matthew Martin stated that the PPI report likely foreshadows what U.S. consumers will face in the future.

 

 

This also dampened the market’s enthusiasm from yesterday, which had been anticipating an accelerated Federal Reserve rate cut. Traders who had fully priced in a 100% chance of a September rate cut have now adjusted the probability of a 25-basis-point cut back to 92%.

 

Clark Geranen, Chief Market Strategist at CalBay Investments, interpreted that the higher-than-expected PPI alongside relatively soft CPI suggests U.S. companies are currently absorbing most tariff costs rather than passing them on to consumers. However, he noted that companies may soon change tactics and start transferring these costs to consumers.  

 

He also said the importance of Powell’s speech at Jackson Hole lies in the fact that the stock market has rallied in recent weeks due to expectations of a September rate cut, and investors are eager for further validation of this outlook.  

 

Some market participants suggested that Thursday’s lack of a major sell-off may partly be due to expectations surrounding the Friday U.S.-Russia leaders’ summit. However, both governments have been signaling in recent days, urging the public to lower expectations for the meeting’s outcomes.  

Global Hotspots  

Russia Confirms “Putin-Trump Summit” to Be Held at Alaska U.S. Military Base

 

Russian Presidential Aide Ushakov stated on August 14 local time that the main portion of the U.S.-Russia leaders’ summit will take place at Joint Base Elmendorf-Richardson in Anchorage, Alaska.

 

Ushakov also announced that the meeting between Putin and Trump will begin at 10:30 PM Moscow time on the 15th, conducted one-on-one with interpreters. This will be followed by a “5-on-5” delegation-level consultation. The two leaders will hold a joint press conference after the talks.  

 

Market News: Trump Administration Discussing Stake in Intel

 

A sudden report emerged before Thursday’s close, suggesting the Trump administration is negotiating with Intel to potentially take a stake to support its efforts to expand U.S. domestic semiconductor manufacturing. Insiders say the plan stems from a meeting this week between Trump and Intel CEO Chen Lizhi, with the idea involving government equity investment, though details are yet to be finalized.

 

Influenced by this news, Intel surged late in the session, closing up 7.38%. Intel responded: “We look forward to continuing our collaboration with the Trump administration on these shared priorities, but we will not comment on rumors or speculation.”  

 

Wall Street Bets on September Rate Cut, Fed Officials Respond

 

Too Early to Decide: St. Louis Fed President Alberto Musalem recently stated that it is too early to conclude whether to lower rates at next month’s meeting. In an interview on August 14 local time, Musalem said, “For me, it’s still too early, and I cannot clearly state what policy stance I would support at the September meeting.”  

Company News  

Berkshire Builds $1.5 Billion Stake in UnitedHealth, Sparks Stock Surge

 

In the 13F filing released early Friday Beijing time, Berkshire disclosed it built a position of 5.039 million shares in U.S. healthcare company UnitedHealth during Q2, valued at $1.57 billion at quarter-end.

 

Additionally, Berkshire opened positions in steelmaker Nucor, outdoor advertising company Lamar Advertising, and security firm Allegion, while repurchasing shares of homebuilders Lennar Class A and DR Horton. Influenced by this, UnitedHealth’s after-hours trading rose 10% as of press time, with Nucor jumping over 6%.  

 

Applied Materials Guidance Disappoints, Drops Over 13% After Hours

 

Semiconductor equipment giant Applied Materials fell over 13% after hours on Thursday. The company’s revenue and profit guidance for the current quarter fell short of market expectations. CEO Gary Dickerson cited “increased uncertainty and reduced visibility” due to the current macroeconomic and policy environment.  

 

Good News Before Fall Launch: Apple Watch Regains Blood Oxygen Feature in U.S.

 

After months of legal battles, Apple has restored the blood oxygen monitoring feature on its smartwatches in the U.S. On August 14 local time, Apple announced on its website that it will roll out a redesigned blood oxygen monitoring feature for Apple Watch users via a software update for iPhones and Apple Watches later that day.  

 

Coach Parent Tapestry Plummets Due to Tariffs, Impairment Charge

 

Luxury holding group Tapestry dropped 15.71% on Thursday. CFO Scott Roe stated that U.S. tariffs will add approximately $160 million in extra costs for the fiscal year. Despite strong performance from its Coach brand, underperformance at Kate Spade led to an $855 million impairment charge.  

Forex & Commodities  

International oil prices rose on August 14. At close, NYMEX WTI crude futures for the current month settled up $1.31 to $63.96 per barrel, a 2.09% gain, while London Brent crude futures rose $1.21 to $66.84 per barrel, up 1.84%.  

 

COMEX gold futures for the current month fell $25.10, or 0.74%, to $3,383.2 per ounce.

 

At New York’s close, the U.S. Dollar Index rose 0.42% to 98.21, with most non-U.S. currencies declining.  

Key Events  

Global Oil Market May Face “Significant Surplus,” U.S. Energy Heartland in Anxiety

 

U.S. shale oil producers are idling rigs and cutting spending to cope with the oil price crash triggered by OPEC’s increased production, potentially leading to a noticeable decline in U.S. oil output. Last week, the number of hydraulic fracturing crews—a key indicator of industry activity—dropped to a four-year low, with producers slashing about $1.8 billion in capital expenditure plans over two quarters.  

Cryptocurrency  

Major digital assets fell on Thursday. Bitcoin dropped 3.4% to $118,405, with 24-hour trading volume surging 23.5% to $107.8 billion.

 

Ethereum (ETH-USD) fell 3.5% to $4,557. XRP (XRP-USD) lost 5.6%, BNB (BNB-USD) declined 0.3%, and Solana (SOL-USD) fell 3.2%.

 

Dogecoin (DOGE-USD) shed 7.7%, while Cardano (ADA-USD) rose 2.8%. The total market value of the cryptocurrency industry declined 3.3% in the past 24 hours to $4.01 trillion, with trading volume up 19.6% to $291.49 billion.  

Key Events  

U.S. Treasury Secretary Clarifies Government Crypto Strategy

 

No New Bitcoin Purchases, But Reserve Expansion Plan Not Terminated: According to Axios, U.S. Treasury Secretary Scott Bessent clarified on Fox Business Network on Thursday local time that the U.S. government will not directly buy more Bitcoin.

 

However, he added that this does not mean the plan to expand crypto asset reserves has been abandoned.