Macrosynthesis

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TLDR

• Stock rally continues
• Powell issues warning on U.S. debt levels
• Solar stocks continue selloff on Trump victory beliefs
• Nancy Pelosi sells up to $1M in Visa stock
• Liberal party takes over UK Gov't
• Biotech up 76% in a day on Alzheimer's drug hopes

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U.S. Stock Indexes Take a Breather

The S&P 500 kicked off the second half of 2024 with its strongest weekly gain since late April, buoyed by encouraging labor market data that bolstered the likelihood of Federal Reserve interest rate cuts. This rally was further fueled by dovish remarks from Fed Chair Jerome Powell and insights from the central bank's recent monetary policy meeting minutes. Additionally, a resurgence in Tesla's (TSLA) stock performance contributed to the market's upward momentum. Over the week, the S&P 500 rose by 2%, the Nasdaq Composite surged by 3.5%, and the Dow Jones Industrial Average increased by 0.7%.

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Shares of solar stock continued their selloff,

as markets priced in the increased likelihood of an anti-solar incentive Trump administration following a horrible debate performance by Biden. The democratic party is fractured over whether to lobby for replacing President Biden (81) with Vice President Kamala Harris (59) as the party's nominee for President, and democratic senators are meeting to discuss how to handle the situation. Shares of First Solar are down almost -17% in the past month.

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US Job Market Adds 206K in June, Shows Signs of Cooling Amid Revised Data

The US economy added 206K jobs in June 2024, above forecasts but below the revised 218K in May. Significant job gains were in government, healthcare, social assistance, and construction, while retail, manufacturing, and professional services saw losses. The labor market remains strong but is cooling. The unemployment rate unexpectedly climbed to 4.1%, tied for the highest level since October 2021.

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Nancy Pelosi Sells Visa Stock

In a possible indicator of slowing consumer spending, House leader Pelosi sold up to 1 million dollars of Visa stock last week. She has been selling the stock in large amounts since 2022.

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Consumer Discretionary stocks rose by 3.8%, last week, leading the sectors.

Consumer Staples saw a 1% increase last week, while Utilities and Financials gained 0.6% and 0.9% respectively. The Telecom and Information Technology sectors both surged by 3.9%. In contrast, Healthcare and Energy sectors experienced declines of -1% and -1.3% respectively. The Industrials sector fell by -0.6%, Materials by -0.5%, and Real Estate by -0.3%.

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June Wage Growth Slows

‍In June 2024, US private nonfarm payrolls' average hourly earnings rose by 10 cents (0.3%) to $35.00, slightly missing the 0.4% forecast. Over the past year, earnings increased by 3.9%, the smallest gain since June 2021.

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Rent Inflation Squeezes Small Businesses: 43% Unable to Pay Full Rent on Time

A Bank of America Institute study found that rent increases are impacting small businesses, particularly in the West, where rent payments are more than double the national average. In May, 43% of U.S. small business owners couldn't pay full rent on time, the highest rate since March 2021.

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Labour Party Triumphs

The UK has experienced a political shift as the liberal Labour Party, led by Keir Starmer, secured a landslide victory in the 2024 general election, ending 14 years of Conservative rule.  Prime Minister Rishi Sunak resigned as party leader following the defeat. Shres of homebuilder stocks rose while shares of British drugmaker AstraZeneca (AZN) sold off some.

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Zambia Bans U.S. Dollar Transactions

Zambia has banned all transactions using foreign currencies, including the US dollar. Offenders could face up to ten years in prison or heavy fines. Zambia's local currency, the kwacha, is up over 8% in the last month compared to the dollar.

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Powell Concerned Over U.S. Debt

"The United States is running a very large deficit at a time when we're at full employment," Fed Chair Jay Powell said at an ECB conference in Portugal. "The level of debt that we have is not unsustainable, [but] the path that we're on is unsustainable - that's completely not controversial. This is something that should be a top-level issue. You can't run these kinds of deficits [even] in good economic times for very long. In the longer run, we're going to have to do something sooner or later, and sooner will be better than later."

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Shares of the Gold ETF and gold miner Newmont (NEM) rose 2.5% and 5.4%, respectively, on the back of these comments. Gold is looked at as a hedge against dollar devaluation due to debt levels.

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Q2 Earnings Kick Off Next Week

In the U.S., June CPI is expected to rise 0.1%, with core CPI up 0.2%. Producer prices may increase 0.1%, rebounding from May's decline. Fed Chair Powell's testimony, Michigan consumer sentiment, and major bank earnings reports kick off the Q2 earnings cycle.

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Commodity Movers

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Natural Gas

-10.42%  (1W Chg)

-17.41% (1M Chg)

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Silver

+2.79% (1D Chg)

+7.41% (1W Chg)

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Orange Juice

+6.34% (1W Chg)

+52.28% (YoY Chg)

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Cocoa

-4.05% (1W Chg)

-20.79% (1M Chg)

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Noteworthy Events    

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Meme Madness Still Going

Chewy stock dropped -6.6% on July 1st as "Roaring Kitty" acquired nine million shares-- representing 6.6% of shares. GameStop, his top holding, slid -5.5%, with unclear funding sources outside of meme traders.

Apple to Integrate ChatGPT and Google Gemini This Fall

‍Apple (AAPL) is expected to integrate ChatGPT and Google's Gemini into its Apple Intelligence platform. The partnership with Google will likely be announced this fall.

Nio Stock Jumps on Vehicle Delivery Uptick

Nio's (NIO) stock surged 6.7% on July 1st as June vehicle deliveries soared 98% year-over-year, with 21,209 vehicles delivered, nearly doubling last year's numbers.

Why Was Tesla's Stock Up 10 Percent?

Tesla jumped 10.2% on July 2nd after surpassing second-quarter delivery expectations with 443,956 vehicles, beating analysts' forecast of 439,000. This marked a 14.8% increase from the first quarter.

Paramount Stock Soars on Merger Talks

Paramount Global shares rose 5.7% on July 2nd amidst merger talks for its Paramount+ streaming service, potentially with Warner Bros. Discovery, which saw a 1.4% increase. Negotiations include combining Paramount+ with Max.

Why Macy's Shares Were Up 12%

Macy's shares surged over 12% on July 5th after Arkhouse Management and Brigade Capital Management raised their buyout offer to $24.80 per share, up from $24.

Softbank's Strong Arm

Softbank's U.S. shares jumped 5.5% on July 5th as its Japanese shares hit a 24-year high. Founder Masayoshi Son's AI plans boosted interest. Arm Holdings' U.S. shares also rose nearly 7%.

Teck Strikes Gold with Copper Mine Sale

Teck Resources' stock increased over 2% on July 5th following Canada's approval of Glencore's $6.9 billion acquisition of its coal business, funding a $2 billion share buyback and copper projects.

Annovis Bio Soars 76% on Promising Phase III Parkinson's Study Results

Annovis Bio surged 76.09% on July 2nd after announcing Phase III Parkinson's study data showing improvements in the Unified Parkinson's Disease Rating Scale and cognition with Buntanetap treatment. LevelFields users were alerted to the news before ANVS started its ascent later that morning.

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Upcoming Catalysts:

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EARNINGS

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Wednesday

• WD-40 (WDFC)

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Thursday

• Delta Airlines (DAL)
• PepsiCo (PEP)

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Friday

• JP Morgan Chase (JPM)
• Citigroup (C)
• Wells Fargo (WFC)

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The LevelFields Team