Japan: Market ready for a rate hike this week
Swap market over the past weekend is preparing for a rate hike from the Bank of Japan
Accordingly, BoJ could raise rates 3 consecutive times from now until year-end
Economists also agree with market probability of 3 hikes
Investment funds continue to reduce Yen shorts, especially after the Yen Carry Trade unwind that caused the market flash crash on Thursday last week
Read more about the impact of Yen Carry Trade
Europe: Key data for ECB cut or no cut coming this week
A full week of data from Europe
Economic growth in the eurozone has slowed significantly over the past 6 quarters
Inflation is also forecasted to stabilize enough for ECB to continue cutting rates after "pausing" in June
Venezuela: Maduro changes election results - failure for the US?
In yesterday's Venezuelan presidential election, all reports showed incumbent President Maduro defeated with only 31% of the votes.
Images posted by a group of national Electoral Commission staff also show the same
Police and military forces were immediately mobilized to halt vote counting and seize ballot boxes. Violence immediately spread nationwide.
This is the official election result, with clear tampering as total votes reach 109.2% (!?)
South American countries including Costa Rica, Argentina, Peru, and Chile have officially stated they do not recognize the fraudulent election results
US Deputy Secretary Anthony Blinken said the US is "concerned" about the election results but has not taken stronger actions as the Biden administration has eased sanctions in exchange for Maduro's commitment to ensure fair voting rights for the Venezuelan people
Venezuela is the world's 2nd largest oil reserves holder, accounting for 17% of global reserves
However, under President Maduro's two terms, quality of life has significantly declined with hyperinflation and shortages
France: Fiber optic system sabotaged after Olympics opening
This year's Paris Olympics opening ceremony faced so much criticism over the opening performance that the official Olympics account had to delete the opening video on YouTube
Not only that, Olympics also sent DMCA requests to remove videos about the event from social media.
After fierce opposition from around the World, representatives of the organizing committee issued an apology. However, the fiber optic system and telecommunications infrastructure in France continue to be sabotaged in 6 regions across the country.
Trump Assassination Attempt: Tech Companies Accused of "Erasing History"
Google search results do not suggest the event that happened 2 weeks ago
Google has stated that this was an unintentional action and simply wanted to filter out political violence events
Meta: Images of the assassination attempt rejected and the assassination event deemed "fictional" by Meta AI
Meta has not yet responded to the above allegations
US public debt hits 35 trillion dollar mark
76% of all personal income tax collected will be used to pay interest on public debt over 1 trillion per year
McDonald’s: Sales decline but will continue to grow
Q2 revenue $6.5 billion, same as last year, slightly below forecast $0.1 billion
Earnings $2.97/share slightly below forecast $0.1
System-wide sales -1% vs last year
Same-store sales -1% vs last year
Forecast to open additional 1,600 locations in 2024
Raised profit margin forecast to mid or high 40% (42%-47%)
Steve: Overall, this is a financial report not as expected by Wall Street but not as bad as the market thinks. The decline in demand from consumers' pockets clearly affects $MCD, but the decline is not alarming. Additionally, continuing to expand locations and improving profit margins is a signal welcomed by investors. Overall, the stock is at a fairly low valuation and provides investors a safe haven during recession times, however in the long term, Steve still believes that is against the "healthy" trend of the entire industry so is still a better choice when compared.
Market: Stable awaiting a stormy week
Market opened the first trading session of the week with continued improved sentiment with shorts-cover rally in Tesla and Google as short-term puts after ER of the two stocks expired.
Overall, investors and traders feel reassured about capital rotation ahead of a stormy week, including employment data, FOMC and 40% weight of S&P500 earnings reports.
SPX 5500 level continues to be the key level the market needs to break to push into positive gamma territory with 550 on SPY marking breakout, 5600 SPX is target. However, this is unlikely before FOMC.
Small caps pulled back in today's session as a warning of call skew with IV pushed too high on Friday. However, above 220, IWM continues to maintain bullish bias.
On internals, the market is generally more stable with improved liquidity but selling pressure on NYSE continues to lead showing overall risk-off sentiment still occurring, just milder. Capital flows also show signs of running into bonds "storm shelter".
Levels of stocks with high Options activity today:
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