SIGNS OF RECOVERY
Bitcoin started off August on a rough note, experiencing a 13% drop in the first five days due to unwinding yen carry trades and concerns about the U.S. economy. Nonetheless, despite this setback, the cryptocurrency has shown signs of recovery, with its trading value increasing by over 3% as of 8:00 AM CST. In addition, positive indications were observed in Bitcoin options on the Deribit exchange, with the 180-day call-put skew remaining bullish, hinting at potential price strength ahead. Furthermore, buying opportunities have emerged on U.S. exchanges like Coinbase, Gemini, and Kraken, evident from a positive cumulative volume delta signaling net buying pressure and bargain hunting during price declines. Moreover, with expectations of a U.S. rate cut looming, experts believe that Bitcoin will benefit from this development, paving the way for further growth in the near future.
NARROWED TRADE DEFICIT
In June, the trade deficit in the U.S. decreased by 2.5% compared to the previous month due to higher exports of aircraft and domestically produced oil and gas. This led to a drop in the deficit from $75.0 billion in May to $73.1 billion. However, the larger trade gap in the second quarter had a negative impact on the annual economic growth rate, reducing it by 0.7 percentage points to 2.8%. The focus now shifts to import trends, as lower purchases of imports by Americans out of recessionary concerns could indicate potential economic challenges. Export numbers showed a 1.5% increase, reaching $265.9 billion in June, driven by higher shipments of passenger planes, oil, and natural gas. Conversely, imports rose by 0.6% to $339.0 billion, with notable increases in imports of drugs, computer chips, and telecommunications equipment while oil imports declined. Moreover, it is worth noting that while changes in the trade deficit typically have a small effect on the economy, bigger shifts could happen during major political changes or disruptions, though it is unclear if that will occur soon.
ACCELERATED GROWTH
Uber exceeded expectations in their second-quarter earnings report, with earnings per share at 47 cents compared to the expected 31 cents. Revenue also surpassed estimates at $10.7 billion, driven by growth in their mobility, delivery, and freight units. CEO Dara Khosrowshahi remains optimistic about continued growth, with the company projecting bookings of $40.25 billion to $41.75 billion for the third quarter. Additionally, Uber has announced partnerships with Instacart and BYD to expand their services and introduce electric vehicles for Uber drivers. Moreover, although there has been a slight decline in share price, Uber’s strategic initiatives point towards a promising future in the evolving transportation and delivery industry.
AI SUCCESS
Palantir Technologies is experiencing a significant uptick in revenue and market performance due to the increasing demand for its software services driven by the generative AI boom. The company raised its annual revenue forecast for the second time this year, with shares soaring over 15% in extended trading. The CEO, Alex Karp, reported the company’s largest-ever quarterly profit and forecasted third-quarter sales above expectations. Palantir’s AI platform, used for testing and debugging code as well as evaluating AI scenarios, has enabled it to cater to the rising demand for services that aid in the development of generative AI technology. The company is now projecting annual revenue between $2.74 billion and $2.75 billion, surpassing initial estimates. Moreover, it is worth remarking that although Palantir’s value has decreased slightly, its revenue growth from non-government clients has been particularly noteworthy, showing a 33% increase in the last reported quarter.
INTERNATIONAL NEWS
Japan’s stock market has experienced a significant rebound following the drastic drop it witnessed in the previous session. Both the Nikkei 225 and Topix indexes surged by over 9%, with the Nikkei achieving its largest daily gain since 2008. This robust recovery allowed Japan’s market to return to positive territory for the year. The rally was broad-based, with heavy trading companies such as Mitsui and Softbank witnessing gains over 5%. Additionally, sectors like automakers and semiconductor suppliers, including Suzuki Motor and Renesas Electronics, saw substantial increases in their stock prices. The weakening of the yen against the U.S. dollar also impacted market dynamics, and in neighboring South Korea, the Kospi and Kosdaq indexes saw notable gains, while China’s CSI 300 and Hong Kong’s Hang Seng index remained relatively stable. Moreover, despite Japan’s June household spending reporting a decline, real wages in the country saw a noteworthy increase for the first time in 26 months. This upward trend in wages could potentially influence Japan’s future monetary policy decisions.
