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Good morning. The US stock market closed on Wednesday, July 17th. This channel delivers breaking news videos every morning immediately after the market closes. If you want to know the latest information in a concise way first thing in the morning, please subscribe to the channel. So today, major tech stocks continue to be sold off.
ASML of the Netherlands announced its earnings, causing its stock price to fall sharply. In addition, new US restrictions on China are accelerating the selling. Looking at the indices, the New York Dow is strong at up 0.9, but the S&P 500 is down 1.39 and the Nasda is down 2.77. The Russell 2000, which had been rising until yesterday, is also weak today at -0.8696, -29.7046, -0.21% 262.6$.
And the dollar-yen is also moving sharply, with the yen strengthening against the dollar at 15620. However, it is thought that the currency moved sharply not due to currency intervention, but due to a statement from a key figure. Looking at the international yields of Bitcoin, which is currently at $64,500, the 10th anniversary is 4.12 years old is 4.436.
Looking at the chart, it rose sharply around 11pm but has been falling since then. Today's stock market movements: ASML is a European company, so it started from European time, and related stocks fell. In the US, the S&P 500 also fell sharply in pre-market trading, and the 999 also fell in pre-market trading and didn't stop at all after opening.
Looking at a comparison of the four rooms, orange is the Nasdaq, which has been down from the beginning and continued to fall throughout the day, and I thought it might recover at one point, but it was very weak. The S&P 500 also fell at the beginning and then remained flat for a long time. The Russell 2000 (yellow) rose sharply at one point but then fell.
The only thing that was strong throughout the day was the New York Dow. Looking at the Russell growth and value lines, orange is value, which rose at the beginning and then remained flat, while the growth and value lines were weak. Growth stocks are in the blue range, and have dropped sharply. Looking at today's heatmap, it's exactly the same as the past 23 days, with large tech stocks being weak.
Financial stocks are doing reasonably well, with healthcare stocks like Johnson & Johnson Abbey and Bristol-Myers UnitedHealth rising 34%. Consumer staples stocks like PepsiCo, Philip Morris, and General Mills are also up, as are gasoline companies. Looking at the chart for ASML, a major Dutch reaction stock manufacturing equipment company, it has fallen sharply since 5am when pre-market trading began and has continued to decline.
Looking at the European market EuroNEXT, it has also fallen sharply since 4am, an hour earlier than the US pre-market. Now let's look at the earnings results. ASML saw its biggest drop since March 2020. US regulations are a risk of unfair treatment. Orders and reservations for the second half of the year, April to June, showed a significant increase.
However, the possibility of the US imposing even stricter restrictions on classes in China is being cited as a factor. The Biden administration has seen companies like ASML and Tokyo Electron decline. The company is considering using the most stringent trade restrictions it knows of if it continues to provide China with access to advanced reaction technology, drawing more attention to the intellectual risks than the financial results.
The high proportion of sales to China is a bottleneck. In this graph, black is sales to China, pink is sales to South Korea, blue is Taiwan, yellow is the United States, and green is Europe and the Middle East. This is the second quarter of 2024. Sales to China remain extremely high, while sales to South Korea have also grown sharply since the previous quarter.
This is likely due to increased shipments to memory companies such as Samsung Electronics and SK Hynix. Taiwan has also grown considerably compared to the previous quarter. The sales forecast for July to September is 6.7 billion to 7.3 billion euros, slightly below market expectations. This may have been a factor in the decline of the stock price.
Sales in China from April to June increased by 21% compared to the previous quarter and accounted for nearly half of the total. Up to 15% of sales to China this year are expected to be affected by the new export restrictions issued in January. While EUV (Electronic Ultraviolet) travel equipment was already subject to export restrictions, now DUV (Dual Exhaust) travel equipment will also be subject to new restrictions.
As a result, the sales forecast for July to September is likely to fall slightly below market expectations of 7.5 billion euros, which may be one of the factors driving down the stock price. In short, there are two main reasons for ASML's significant stock price decline: firstly, its high dependence on China in its earnings report, and secondly, US export restrictions.
However, I don't think the earnings figures themselves are that bad, so it's not that AI is bad or that other reactionary companies have stopped growing. Rather, it's more about how the US restrictions will affect things, and I think this is leading to selling as a temporary risk avoidance measure. I think this decline will recover to some extent.
ASML has warned its allies that it is considering the strictest measures regarding reactionary equipment restrictions, and is considering using the Foreign Direct Products Rule ( FDP), which would allow for the imposition of restrictive measures on foreign products that use even a small amount of American technology.
This is extremely concerning to allies. It is seen as a tough measure. According to sources who spoke on condition of anonymity, the US has presented this plan to Japanese and Dutch officials as a result of the increased likelihood of the country strengthening its measures against China. As a result, Tokyo Electron's stock price fell 7.5 in the Tokyo stock market, and selling spread to other reaction stocks.
After the Japanese market, the Amsterdam market in Europe fell 11% after 4 p.m., and trading was halted. This has led to a global sell-off of reaction stocks. That being said, the entire stock market is not bad. Stocks that are rising, such as valu stocks and small and mid-cap stocks, seem to remain strong, so it is likely that some money is flowing into those.
In addition, Taiwan Semiconductor's stock price has fallen, and trading volume has also increased. Trump has said that Taiwan should pay for its defense. In an interview, he said, "I know the people of Taiwan well and I have great respect for them. They take about 100% of our tipping business. I think Taiwan should pay for our defense." However, this interview was on June 25th.
The interview took place on June 25th, which was announced on July 16th. June 25th was before the televised debate with Biden. Taiwan Semiconductor's top customers are Apple and NVIDIA, and they receive orders from them, produce a lot of goods, and make a profit, and they also pay taxes. So, the concern is that if Trump becomes president, some kind of pressure might be put on Taiwan.
I think it's a bit premature, and it won't put that much burden on Taiwan Semiconductor alone, so I think it's a bit of an overreaction, especially considering the news about the regulation of reactionary forces. Looking at the content of Trump's solo interview that took place in Bloomberg Businessweek on June 25th, what he's saying hasn't changed that much, but Trump said that the key points of his economic policy, Trumpnomics, are that low interest rates and low taxes will be a huge incentive to open up businesses in America, and that he will not aim to remove the Fed chairman before his term expires.
The idea is that Chairman Powell's popularity will last until May 2026, and Trump has stated that he intends to let him run out of popularity, especially if he believes that Powell is running the right policies. On the other hand, he has warned against cutting interest rates before the November presidential election, as this would give the economy and a boost to President Biden.
He commented that while the market is currently pricing in a rate cut, they know that it shouldn't be done. In other words, assuming Trump becomes president, if Powell wants to run out of popularity, he won't cut interest rates. However, if he does cut interest rates, he might be forced to resign at the last minute before his popularity expires.
But this is not something Powell can decide on his own; it's something the FOMC will decide, so it seems a bit difficult. Also, regarding TikTok, which he tried to get banned during his presidency, he has said there are no plans to ban it anymore. And then there's Jamie Daimon, CEO of JP Morgan. He is being considered for the position of Treasury Secretary.
There are various other things as well. What I said in my video yesterday in Kyoto hasn't changed much. The overall picture of Trump's economics may not be any different from what was done during Trump's term. The new elements are the speed and efficiency in implementing it, and the importance of putting the right people in the right places.
He has a deeper understanding of the levers of power. He has been making things quickly using presidential examples before, so I think that kind of speed is typical of Trump as a businessman. And the FOMC officials who decide when to cut interest rates First of all, Fed Governor Wullah says that they are getting closer to the point where a rate cut will be possible.
The current data is consistent with achieving a soft landing, and they want to look for data that will reinforce this view over the next two months. I think they are getting closer to the time when a reduction in the policy interest rate will be justified. If it's the next two months, then I think the most logical path would be to check the employment statistics and CPI for August and September, and if there are no problems with the numbers, then cut interest rates at the FOMC meeting in mid-September.
And one more person, Williams, president of the New York Alchemy Society, says that he wants to confirm the decline in inflation with more data to gain the confidence necessary to decide on a rate cut. To get more evidence, we need to confirm it in the next few months. Between July and September, monetary authorities will learn a lot.
The data for the last three months shows that we are approaching the disinflationary trend we are looking for. In the next few months, perhaps two months will be enough, and a rate cut in September seems almost certain. And Richmond Reggie Barr said he is encouraged by the degree of slowing inflation.
Next, the Bayes Book, a U.S. economic report, was released. The economy expanded slightly and prices grew slowly. The report points out that the U.S. economy expanded at a slight pace towards the third quarter, July through September. Employment also grew only slightly, with turnover rates down. Wages increased at a slow or moderate pace in most districts.
Prices grew slowly. Personal consumption remained largely unchanged or flat. Almost all districts mentioned ice cream prices being lowered and consumers focusing on necessities. Although people are still shopping. It's the bare minimum, but the retail sales figures released the other day were good, so although the unemployment rate is rising, it looks like a soft landing is possible for now.
Now, in line with this, let's look at the Atlanta Regulator 's GDP Now indicator, which predicts what the current US GDP is like. As of the release on July 17th, it was 2.7 Looking at the graph, it was high at nearly 3% until June, but at the beginning of July it plummeted to below 2%. However, with this July 17th release it has recovered significantly to 2.7, which shows that the economy is strong, but compared to April and May it seems to be slowly declining, so I think the pace is slowing down.
Now, looking at the current market interest rate forecasts, it is expected to remain unchanged at 95.35% on July 31st, cut at 95.35% on September 18th, and 64.99 in November. Next, looking at the dollar-yen exchange rate, it rose sharply from just after 3 AM Japan time to 158 yuan. It split and fell to 15,620.
For a moment I wondered if there had been currency intervention, but this decline didn't happen all at once; it fell gradually over several hours. What happened was that there were statements from Japanese and American officials warning against the yen's depreciation. In the interview earlier, former President Trump said that we have a big currency problem, and that the dollar and the gentry are circulating at an unbelievable rate, indicating his intention to correct the strong dollar and not tolerate a weak yen or gentry.
There had been growing pressure on the dollar to rise in the foreign exchange market due to expectations that a Trump victory would lead to fiscal expansion and inflation, but these statements were meant to curb that pressure. And then there was another Japanese person, Taro Kono, who said that foreign exchange is a problem for Japan, that the yen is too weak, and urged the Bank of Japan to raise interest rates in order to correct the weak yen.
Looking at it in more detail, Mr. Kono emphasized the problems such as the impact on domestic production that a rapidly depreciating yen would bring. If the yen becomes weaker, exports While this will lead to an increase in many Japanese companies, many Japanese companies have production bases overseas, so the benefits for Japan are limited.
He says that the yen needs to be restored to its value, which is too low. On the 11th and 12th of this month, there was a possibility that foreign intervention totaling approximately 5.64 trillion yen was carried out, which touched upon the appreciation of the yen. However, the next presidential candidate and the next candidate for party president have both taken action to curb the depreciation of the yen, and the yen moved by nearly 2 yen.
Mr. Kono's remarks could influence the discussions at the Monetary Policy Meeting to be held at the end of this month, so I think the remarks of Mr. Ueda of the Bank of Japan will be the focus of attention next. Regarding the possibility of running as Kishida's endorsed candidate in the LDP presidential election in September, he avoided making a clear statement, however, domestic media has reported that Mr.
Kono has conveyed his intention to run to Vice President Taro Aso. Regarding this, Mr. Kono has neither confirmed nor denied it. The appeal of becoming prime minister is that he can push forward his own policy proposals. When asked if he is aiming to become prime minister, he said that he is ambitious, saying that he will someday.
So today, ASML's earnings and reaction The restrictions on physical activity and the subsequent statements from these officials have had a significant impact on the Nasdaq and Dollarwen. However, the tide has completely turned since last week. I do n't think that Valu and small and mid-cap stocks will suddenly rise, but we need to accept this change.
The market is completely different from the first half of this year, so I hope you will refresh yourselves and look forward to the second half of the year. That's all for today. Thank you.
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