ADDX GO Market Morning Wrap - 22nd Aug
Stock Market
On Thursday Eastern Time, the major U.S. stock indices closed lower collectively, as investors grew concerned that Federal Reserve Chair Jerome Powell might deliver hawkish remarks, potentially triggering market volatility.
At the same time, the quarterly performance of major retailer Walmart also dampened market sentiment.
Most large-cap tech stocks declined, with Tesla and Meta dropping over 1%, and Apple, Microsoft, Nvidia, Netflix, Amazon, AMD, and Intel seeing modest declines; Google posted a slight gain.
Global attention is focused on the Jackson Hole Global Central Bank Symposium, where Federal Reserve Chair Jerome Powell will deliver a keynote speech today. Traders will dissect his every word for clues about a September rate cut. Previously, signs of a softening U.S. labor market had fueled high expectations for a rate cut.
CFRA Research Chief Investment Strategist Sam Stovall noted: “The probability of a Fed rate cut in September remains around 80%, but this expectation is under pressure. Investors are reassessing related risks and opting to take profits early.”
According to LSEG data, traders’ bets on a 25-basis-point rate cut in September have plummeted from 99.9% last week to 79%. Market observers note that August trading is typically light, and Powell’s speech could spark significant volatility.
LPL Financial Chief Technical Strategist Adam Turnquist said: “The uncertainty surrounding Powell’s Jackson Hole speech is clearly impacting risk appetite. If his remarks turn out to be more hawkish than expected, it could trigger a broader sell-off.”
On Thursday, policymakers including Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, and Kansas City Fed President Jeffrey Schmid signaled caution, emphasizing that monetary policy must be data-dependent and not rushed into rate cuts.
Additionally, two data releases on Thursday added complexity to the situation: one showed a rebound in U.S. business activity in August, while another reported an unexpected month-on-month increase in July existing home sales. These figures drove up U.S. Treasury yields, further pressuring stocks.
Earlier this week, a tech stock sell-off sparked market panic, and while Thursday’s decline moderated, stars like Nvidia, Meta, Amazon, and AMD remained weak.
Investors are worried that tech stock valuations, which have surged since the April low, are now excessively high, while increasing regulatory scrutiny and intervention by the U.S. government in the tech sector are heightening concerns.
Global Hotspots
Fed’s Mester: No Support for September Rate Cut
On Thursday local time, Cleveland Fed President Beth Mester stated that if Fed officials were to decide policy tomorrow, she would not support a rate cut in September. In an interview with media, Mester said: “Inflation remains too high and has trended upward over the past year.
Based on the information I have, I see no reason to lower rates if a meeting were held tomorrow.”
U.S.-EU Trade Framework Agreement Finally Lands, But Auto and Steel Tariffs Remain Uncertain
The long-stalled U.S.-EU trade agreement saw a major breakthrough. On August 21, the U.S. and EU issued a joint statement announcing agreement on the “Reciprocal, Fair, and Balanced Trade Agreement Framework.”
On July 27, U.S. President Trump and European Commission President Ursula von der Leyen jointly announced a new trade deal in Scotland, though specific terms and implementation details were not disclosed.
U.S. Justice Department Plans Investigation into Fed Governor Cook, Urges Powell to Remove Her
Reports indicate that the U.S. Justice Department plans to investigate Federal Reserve Governor Lisa Cook and has urged Fed Chair Jerome Powell to remove her.
On Thursday local time (August 21), U.S. Justice Department pardon attorney Ed Martin wrote to Powell, stating that Cook’s case “requires further review” and urging her removal from the Fed Board.
U.S. Government: Reviewing Over 55 Million U.S. Visa Holders for Violations
According to News, on August 21 local time, the U.S. government announced it is reviewing over 55 million individuals holding U.S. visas for potential violations that could lead to deportation.
The U.S. State Department stated that visas could be revoked at any time if there are indications of overstaying, criminal activity, threats to public safety, involvement in any form of terrorism, or support for terrorist organizations.
Guterres Calls for U.S. and Venezuela to Ease Tensions
A spokesperson for UN Secretary-General António Guterres stated that Guterres urges the U.S. and Venezuela to de-escalate tensions, exercise restraint, and resolve disputes peacefully. Earlier reports noted that the U.S. has ordered an amphibious task force to the southern Caribbean to support efforts against Latin American drug cartels, with the fleet potentially arriving near Venezuela by the 24th.
Venezuelan President Nicolás Maduro condemned the U.S. military deployment in the Caribbean on the 20th, calling it a violation of international law and a threat to regional peace.
Company News
U.S. Regulator Investigates Tesla for Delayed Reporting of Autopilot-Related Incidents
The U.S. auto safety regulator is investigating Tesla for delays in reporting details of incidents involving its driver-assistance technology. According to documents on the National Highway Traffic Safety Administration (NHTSA) website, the agency found that multiple Tesla incident reports were submitted “months or more” after the accidents occurred.
Companies are typically required to file such reports within one or five days of receiving notification.
Gilead’s HIV Drug Faces Winding Road to Insurance Coverage
U.S. healthcare giant CVS Health stated that it has not yet added Gilead’s HIV drug to its commercial drug plan. CVS spokesperson David Whitrap confirmed that Gilead’s drug is not currently included in the CVS Caremark commercial plan or the Affordable Care Act (ACA) plan.
Whitrap said in a statement: “As with other newly launched drugs, we conduct a thorough review of clinical, financial, and regulatory factors.” Affected by this news, Gilead Sciences’ stock closed down 2.2%.
Anthropic in Talks to Raise Up to $10 Billion in New Funding
Insiders reveal that Anthropic is close to securing a new funding round of up to $10 billion, exceeding expectations and marking one of the largest fundraising efforts by an AI startup to date. The negotiations are ongoing, and the final amount could vary. Previous reports suggested Anthropic was in deep discussions to raise $5 billion, with a valuation of $170 billion.
Due to strong investor demand, the amount has increased significantly. Iconiq Capital is expected to lead the round, with anticipated participants including TPG Inc., Lightspeed Venture Partners, Spark Capital, and Menlo Ventures. Anthropic has also held talks with the Qatar Investment Authority and Singapore’s sovereign wealth fund GIC about joining the round.
Apple Raises Apple TV+ Monthly Subscription Price, Aims to Boost Service Revenue
Apple has increased the monthly subscription price of its streaming platform Apple TV+ by 30% to $13, part of its strategy to expand service revenue. The price hike took effect for new subscribers in the U.S. and some international markets starting Thursday. The annual plan remains at $99, and Apple has not adjusted the price of the Apple One bundle.
Following competitors, Apple is steadily raising prices, though unlike Netflix, Disney+, and HBO Max, Apple TV+ offers only a single subscription tier. Since its 2019 launch, Apple TV+ has lagged behind competitors in user numbers but continues to earn praise for its original content. The service business has been a highlight for Apple, with revenue growing 13% to $27.4 billion last quarter.
Forex & Commodities
International crude oil futures settled up over 1%.
WTI October crude rose 1.29% to $63.52/barrel; Brent October crude gained 1.24% to $67.67/barrel.
COMEX gold futures fell 0.17% to $3,382.9/oz; COMEX silver futures rose 0.81% to $38.08/oz.
At New York’s close, the dollar index rose 0.41% to 98.65, with most non-U.S. currencies declining.
Key Events
Jackson Hole Eve: Can Gold Break the $3,351 Ceiling?
Analysts believe spot gold continues to face downward pressure, maintaining a weak, range-bound trend. The dollar is gaining support amid reduced aggressive rate-cut expectations, limiting gold’s strength. The market awaits later U.S. data and the Jackson Hole speech, with gold prices at a short-term directional crossroads.
Cryptocurrency
Major digital assets fell Thursday.
Bitcoin shed 1.8% to $112,049, with 24-hour trading volume down 16% to $58.73 billion.
Ethereum (ETH-USD), the second-largest digital asset by market value, dropped 2.7% to $4,225.
XRP (XRP-USD) lost 3.2%, BNB (BNB-USD) declined 3.6%, and Solana (SOL-USD) fell 3.5%.
Dogecoin (DOGE-USD) shed 2.5%, while Cardano (ADA-USD) lost 4%.
The total market value of the cryptocurrency industry declined 1.9% in the past 24 hours to $3.8 trillion, with trading volume down 19% to $151.8 billion.
Key Events
Heading to $1 Million? Coinbase: Bitcoin Has 777% Growth Potential by 2030
In an interview, Coinbase CEO Brian Armstrong was asked about his 10-year growth prediction for Bitcoin. He believes Bitcoin could reach $1 million by the end of this decade.
Armstrong noted: “My rough estimate is that Bitcoin might hit $1 million by 2030, but such predictions carry significant uncertainty.”
