The Zhitong Finance App learned that on Monday, the three major indices fell. Crude oil prices soared, and the US military announced an attack on Iran for the third night in a row. As the situation between the US and Iran is heating up again due to the Strait of Hormuz, US President Trump said he will deliver a speech at 9 p.m. on Thursday (9 a.m. on Friday Beijing time). Trump did not explain the content of his speech, but this statement shows that the war with Iran is actually accelerating again, and the two sides should have entered into negotiations after the memorandum of understanding was signed.
[US stocks] At the close, the Dow fell 138.37 points, or 0.26%, to 52498.64 points; the NASDAQ fell 408.43 points, or 1.55%, to 25873.18 points; the S&P 500 index fell 60.05 points, or 0.79%, to 7515.34 points. Micron Technology (MU.US) fell 4.3%, Nvidia (NVDA.US) fell 3.5%, Intel (INTC.US) fell 6%, and SanDisk (SNDK.US) plummeted by more than 12%. The Nasdaq China Golden Dragon Index closed down 0.14%, while NetEase (NTES.US) and JD.US (JD.US) both rose more than 2%.
[European stocks] The German DAX30 index rose 22.95 points, or 0.09%, to 25108.37 points; the UK FTSE 100 index fell 5.86 points, or 0.06%, to 10491.43 points; the French CAC40 index rose 25.68 points, or 0.31%, to 8364.65 points; the European Stoxx 50 index fell 1.51 points, or 0.02%, to 6268.46 points; the Spanish IBEX35 index fell 59.80 points, or 0.31%, to report a decrease of 0.31% 19324.90 points; Italy's FTSE MIB index rose 188.33 points, or 0.36%, to 52802.50 points.
[Asian Stock Market] The Nikkei 225 Index fell 1.92%, and the Korea Composite Stock Price Index fell 8.95%.
[US Dollar Index] The US dollar index, which measures the US dollar against six major currencies, rose 0.28% on the same day and closed at 101.235 at the end of the foreign exchange market. As of the end of the exchange market in New York, 1 euro was worth 1.1387 US dollars, lower than 1.1416 US dollars on the previous trading day; 1 pound was worth 1.3360 US dollars, lower than 1.3398 US dollars on the previous trading day. 1 US dollar was worth 162.36 yen, up from 161.69 yen on the previous trading day; 1 US dollar was worth 0.8141 Swiss franc, higher than 0.8085 Swiss franc on the previous trading day; 1 US dollar was worth 1.4151 Canadian dollars, lower than 1.4152 Canadian dollars on the previous trading day; 1 US dollar was worth 9.7079 SEK, up from 9.6638 on the previous trading day.
[Cryptocurrency] Bitcoin once fell below the $62,000 mark. As of press release, it was down 2.9% to $62,032; Ethereum fell more than 2% to $1762.28.
[Crude oil] Light crude oil futures for August delivery on the New York Mercantile Exchange rose $6.73, or 9.42%, to close at $78.14 a barrel; London Brent crude oil futures for September delivery rose $7.29, to close at $83.30 a barrel, or 9.59%.
[Precious Metals] Spot gold once fell below the $4,000 mark, falling 2.86% to $4002.19 at the close; spot silver was reported at $57.65.
[Macro News]
Waller sets the tone for Tuesday's CPI gold content: if inflation is hot, it will support recent interest rate hikes. Federal Reserve Governor Waller said on Monday that if future data shows that the inflation rate is still far above the 2% target, the Federal Reserve may need to raise interest rates “in the short term.” He said that the current monetary policy is at a “crossroads.” Waller said that this direction will be determined by new information such as the CPI report released on Tuesday. If there is an adverse change in the data trend, the Federal Reserve is currently at a stage where it should not “slack off.” Waller said, “At the current policy level, inflation is still likely to gradually fall back to the 2% target. But I am also concerned that another similar situation may occur, that is, the data for the next few weeks will show that inflation will remain at a high level or even continue to rise, which will require a tighter monetary policy in the short term.” In particular, he expressed his concern that recent inflation reports show that price pressure appears to be expanding throughout the economy, beyond the impact of last year's import tariff increases or recent energy cost increases, which may reflect broader systemic inflation, which will require tighter monetary policies. Waller said, “If the core inflation rate is hot again this week, the FOMC will have to consider tightening monetary policy in the short term. It will take a few months to see the inflation data continue to decline before we can think that inflation is moving in the right direction.”
Media: Trump has notified Congress of the resurgence of war in Iran. According to reports, US President Trump has officially notified Congress that the war in Iran has broken out again. The report said that on the same day, the newspaper obtained a letter from Trump to congressional leaders on the 10th. The letter stated that the US military carried out a “defensive attack” on targets in Iran on the 7th. The report pointed out that the letter has once again intensified the dispute between Congress and the White House. Although the Senate and House of Representatives have previously voted for the president to end the war or seek approval before continuing to act, the White House insists that Trump, as the commander of the three armies, is acting within the scope of constitutional powers. Earlier, on June 23, the US Senate passed a resolution limiting the president's power of war, requiring President Trump to end military action against Iran and obtain congressional authorization before taking military action against Iran in the future. The resolution was previously passed by the House of Representatives.
The US will block Iranian ports at 4 a.m. on the 15th. On the 13th local time, JMIC, a joint maritime information center led by the US Navy, said that the US military will begin implementing a maritime blockade of all Iranian ports and coastal areas at 20:00 GMT on July 14 (July 15, 04:00 Beijing time). The blockade applies to all ships, regardless of what flag they fly. The blockade covers the entire Iranian coastline, including but not limited to Iran's ports and oil terminals. The blockade will not prevent neutral vessels from crossing the Strait of Hormuz to non-Iranian destinations. Transportation of humanitarian supplies will be permitted, subject to inspection.
Goldman Sachs: Profit growth is still the driving force for US stocks, but the Fed's interest rate hike will have an impact in three ways. Goldman Sachs analysts said that even if the Federal Reserve's more hawkish stance continues to pose a risk to the stock market, profit growth may still be the main driving force for the US stock market. Goldman Sachs expects the Federal Reserve to keep interest rates unchanged this year, but believes the probability of raising interest rates is 25%. Goldman Sachs said that the Federal Reserve's resumption of interest rate hikes may have an impact on the stock market in three ways. First, higher interest rates weaken economic growth prospects, and history shows that the impact of economic growth on stock market performance is usually more important than the rate itself. Second, the current AI-led investment cycle has an unusually high capital intensity, which makes enterprises more sensitive to higher financing costs. Furthermore, the Federal Reserve's past austerity cycles have often been accompanied by periods of weak stock market returns. Goldman Sachs analysts said, “Whether the Fed raises interest rates or not, uncertainty surrounding the Fed's policy path will increase the risk of interest rate fluctuations, which will also be a headwind for the stock market.”
Apollo warned of the dollar's vulnerability in AI pullbacks. Torsten Slock, chief economist at Apollo Global Management, said that if the sell-off of AI concept stocks intensifies further, the recent rise in the US dollar may be at risk. Sloke pointed out that international investors are actively laying out AI themes, driving a record rolling net foreign capital inflow in the US stock market over the past 12 months. However, most of these investors did not hedge against foreign exchange risk. “Therefore, if AI disappoints and causes capital inflows to fall back, it will pose a significant downside risk to the dollar.” This means that the US dollar actually “hides a dependency on AI transactions.” The AI boom and subsequent US stock market repeatedly reached new highs, attracting large inflows of overseas capital. Overseas investors needed to exchange their local currency for US dollars before purchasing US stocks, which provided important support for the US dollar. At the same time, compared to other major economies, US interest rates remain high, making it too expensive to buy US dollar exchange rate risk hedging tools, so the trend of the US dollar is also more susceptible to stock market fluctuations. He said that if investors lose confidence in AI trading and start selling stocks, the dollar may also fall back.
[Individual Stock News]
Intel will invest 5 billion euros to expand its factory in Ireland. Intel (INTC.US) will spend 5 billion euros (about 5.7 billion US dollars) to expand its factory in Ireland in an attempt to regain dominance in the manufacturing sector amid the AI boom. Intel said in a statement that the investment will expand its production capacity at the Leixlip campus on the outskirts of Dublin as part of the company's plans to increase data center processor production. The expansion project will increase the production capacity of products, including flagship Xeon server processors, and promote R&D activities. Intel's executive vice president, Naga Chandrasekaran, said in a statement that the move is also part of a plan to improve customer delivery capabilities in Intel's foundry business. Intel's foundry business mainly produces chips for other technology companies. It is an important part of the company's revitalization strategy and aims to strengthen competition with competitors such as TSMC.
Meta invested an additional $40 billion in its largest data center project. Tech giant Meta (META.US) announced that it will expand the size of its data center in Louisiana by an additional 40 billion US dollars, bringing its computing power capacity to 5 gigawatts (GW). Meta wrote in a press release that the newly announced data center expansion project will invest more than $50 billion locally. Previously, the company had announced that it would invest $10 billion in the data center and surrounding communities. The data center in the Diocese of Richland Parish (Richland Parish) in Louisiana is Meta's largest and most ambitious project to date. Two months ago, it was reported that Meta plans to invest about 200 billion US dollars into the project on top of 10 billion US dollars, mainly to purchase expensive AI computing chips deployed in the park. People familiar with the matter revealed that Meta's latest statement means that the total investment in the project is expected to reach at least $250 billion.
[Major Bank Ratings]
UBS Group: Lowered the target price for Alphabet (GOOG.US) from $410 to $400; lowered the target price for Meta Platforms (META.US) from $865 to $766; raised the target price for Intel (INTC.US) from $83 to $121.
Bank of America: Raise the target price for AMD (AMD.US) from $550 to $620.