📰 What’s moving Markets?

Stocks:

• China's exports and imports have fallen, pressuring the 5% growth target for the year. Hong Kong’s Hang Seng index is down over 2% today.

• Global markets have a mixed reaction: US and European futures fell, while Japan and Australia saw gains.

• Palantir raised its 2023 profit forecast and initiated a $1 billion share buyback, pushing its stock up post-market after reporting +13% revenue from last year.

• Beyond Meat shares dropped after Q2 sales missed estimates, and the company cut its revenue outlook.

• JPMorgan's strategist, Marko Kolanovic, advised staying underweight on equities and credit due to overvaluation concerns and potential economic slowdown.

Bonds:

• Yields on the 10-year US Treasury rose by 0.04 percentage points to 4.1%.

• Moody's considering a downgrade for major lenders like BNY Mellon after lowering ratings for smaller US banks.

• Germany kicks off a suite of CPI prints today.

• The BOE warned that high prices in UK supermarkets might persist, with global food market declines potentially slowing the pace of grocery bill increases.

FX/Crypto:

• The yuan hit a near three-week low after a weaker PBOC fixing.

• Russia's rouble fell more than 2% against the dollar, its lowest since March 2022, following tensions in Ukraine.

• The USD Index has strengthened to 102.25

Commodities:

• Brent crude oil price decreased by 1% to $85.34 a barrel due to concerns over the war in Ukraine.

• Gold's spot price slightly decreased, settling at $1934.1667 per ounce.

📊 Chart of the Day

The CNN Fear and Greed Index has dropped below 80 (“extreme greed”) as the S&P 500 pulls back slightly.

CNN Fear and Greed Index & and S&P 500

🤿 Deep Dive

Paypal is launching a stablecoin backed by USD deposits and short-dated US Treasuries.

Bull & Bear’s take: If you can pay customers 0% and earn 5% interest on the collateral, why wouldn’t you? The benefit to the customer is less obvious.

If you’re pressed for time, here’s the TL;DR:

• PayPal Stablecoin Launch: Payments giant PayPal has introduced its own U.S. dollar stablecoin, marking a significant step for a major fintech player into the realm of digital currency.

• Stock Reaction: The announcement boosted PayPal's shares by 2.66%.

• Stablecoins in Context: Although stablecoins have existed for some time, their adoption into the mainstream consumer payments sphere has been limited. Most consumers use them primarily to trade cryptocurrencies such as bitcoin and ether. Tether and USD Coin are currently the leading stablecoins.

• Regulatory Hurdles: Major companies like Meta (formerly Facebook) faced significant regulatory opposition in the past when attempting to introduce their own stablecoins. Since then, many countries have established or are in the process of establishing guidelines for stablecoin governance.

• PayPal's Stablecoin Features: Named "PayPal USD", the coin is backed by U.S. dollar deposits and short-term U.S. Treasuries. It will be issued by Paxos Trust Co and will be gradually rolled out to U.S. PayPal customers. It can be redeemed for U.S. dollars and used to trade other cryptocurrencies available on PayPal.

📆 Coming up this Week

Monday 7th August

• Germany Industrial Production MoM consensus: -0.4%, last: -0.2%, actual: -1.5%

• China Trade Balance consensus: 625.25M, last: 491.25M,

Company Earnings: Paramount (beat), Palantir (in line), Lucid (miss), KKR (beat)

Tuesday 8th August

• Germany Headline CPI YoY consensus: 6.2%, last: 6.2%

• France Trade Balance consensus: -8.0B, last: -8.4B

• United States Trade Balance consensus: -65.70B, last: -69.00B

• China Headline CPI YoY consensus: -0.5%, last: 0.0%

• China PPI YoY consensus: -4.0%, last: -5.4%

Company Earnings: UPS, AMC, Lyft, Fox, Coupang, Twilio

Wednesday 9th August

• Japan PPI YoY consensus: 3.5%, last: 4.1%

Company Earnings: Roblox, Disney, Sony

Thursday 10th August

• United States Initial Jobless Claims consensus: 231K, last: 227K

• United States Headline CPI YoY consensus: 3.3%, last: 3.0%

• United States Core CPI YoY consensus: 4.7%, last: 4.8%

Company Earnings: Alibaba

Friday 11th August

• United Kingdom GDP QoQ consensus: 0.0%, last: 0.1%

• United Kingdom GDP YoY consensus: 0.2%, last: 0.2%

• United Kingdom Industrial Production YoY consensus: -2.1%, last: -2.3%

• United Kingdom Manufacturing Production consensus: -1.0%, last: -1.2%

• France Headline CPI YoY consensus: 4.3%, last: 4.5%

• United States Core PPI YoY consensus: 2.3%, last: 2.4%

• United States PPI YoY consensus: 0.7%, last: 0.1%