ASML Shares Jump on Report US Allies Exempt From Curbs | The Opening Trade 07/31
TLDRThe Opening Trade discusses market reactions to the Bank of Japan's interest rate hike, with the yen gaining against the dollar. Earnings seasons see mixed results from HSBC's $3 billion share buyback and L'Oréal's disappointing sales growth. Geopolitical tensions rise as Israel reportedly kills a Hamas leader in Iran, impacting oil prices. Tech stocks like ASML surge on reports of US allies being exempt from chip export curbs to China.
Takeaways
- 📈 ASML shares surged reportedly due to the US considering exemptions for chip tool vendors from Japan, the Netherlands, and South Korea from upcoming export restrictions to China.
- 🏦 HSBC shares rose with the announcement of a $3 billion share buyback, demonstrating the bank's strong capital position and confidence in future performance.
- 🛫 Airbus shares gained despite a profit warning, with the company reassessing its aerospace division and dealing with supply chain issues that have affected delivery targets.
- 📊 L'Oréal reported disappointing quarterly results with a miss across all units except for the luxury division, particularly noting a slowdown in dermatology sales growth.
- 🛍️ The consumer market shows signs of weakness, with companies like L'Oréal and Adidas facing challenges in certain areas, while others like Prada outperform.
- 💔 BBVA shares fell despite reporting earnings that beat estimates, possibly due to concerns over the bank's potential takeover deal and its implications.
- 📉 Geopolitical tensions in the Middle East, with Israel reportedly killing a Hamas leader in Iran, have led to a rise in oil prices, reflecting concerns over potential supply disruptions.
- 🌐 The Bank of Japan's decision to hike interest rates and reduce bond purchases has caused market volatility, with the yen strengthening against the dollar.
- 🤖 Discussions around AI investments and their monetization highlight the growing importance of technology and automation in driving productivity gains across sectors.
- 🌐 The US Federal Reserve's upcoming decision on interest rates is closely watched, with markets anticipating potential rate cuts and the implications for global economies.
Q & A
What significant action did the Bank of Japan (BOJ) take regarding interest rates as mentioned in the transcript?
-The BOJ decided to hike interest rates, a move that was unexpected by most economists, with only 14 predicting it.
What was the market's initial reaction to the BOJ's interest rate hike?
-The market seemed unmoved initially, with the yen gaining and then dropping, remaining largely unchanged ahead of the Federal Reserve's decision.
What is the focus regarding the Federal Reserve's actions in the upcoming meetings?
-The focus is not on what the Federal Reserve will do in the current meeting, but rather what will happen in September, particularly whether the cracks in the economy will necessitate rate cuts.
What is the current market expectation for the Federal Reserve's rate cut?
-The market is currently pricing in between 2-3 rate cuts for the year, as per the transcript.
What was the reported impact of geopolitical tensions on oil prices in the transcript?
-Geopolitical tensions, particularly in the Middle East, have led to a rise in oil prices, as the market anticipates potential supply disruptions.
How did HSBC's earnings report affect its stock price?
-HSBC's stock price increased following the announcement of a $3 billion share buyback and better-than-expected earnings.
What was the reported change in the U.S. export policy regarding chip technology?
-The U.S. is reportedly considering exempting chip tool vendors from Japan, the Netherlands, and South Korea from upcoming export restrictions to China.
How did the news of the U.S. export policy change affect ASML shares?
-ASML shares jumped significantly, with the stock being up more than 7%, following the news of potential exemption from U.S. export restrictions.
What is the current situation with L'Oréal's sales performance according to the transcript?
-L'Oréal reported sluggish sales growth, with a particular miss in the dermatology unit and a decline in North Asia, including China, for the fourth consecutive quarter.
What was the reported impact of the assassination of Hamas' leader on the Middle East?
-The assassination of Hamas' leader Ismail Haniyeh in Tehran by an Israeli airstrike has escalated tensions in the Middle East, with Iran and other countries condemning the act.
Outlines
📈 Market Tensions and Earnings Season
Anna and Kriti discuss the opening trade in London, with the Bank of Japan's interest rate hike and its impact on the Yen. They preview the Federal Reserve's decision, with a focus on future policy directions rather than immediate actions. Earnings season continues with mixed results, particularly mentioning HSBC and GSK's performance. There's also geopolitical tension discussed, including the US claim of an Israeli leader's death in Tehran and its potential market effects.
🌏 Global Economic Overview and Corporate Earnings
This segment provides a detailed analysis of the global economic situation, including the Bank of Japan's decision to hike interest rates and its detailed timetable. Taro, a Japan economist, explains the significance of this move and its potential impact on Japanese markets. Kriti and Anna also delve into corporate earnings, discussing Standard Chartered's performance and the luxury market's dynamics. Additionally, they touch on the US student loan crisis and Microsoft's earnings growth, which missed expectations and led to a stock price drop.
🏦 HSBC's Earnings and Tech Industry Developments
The hosts discuss HSBC's earnings report, highlighting a big buyback and concerns as interest rates come down. They also talk about wealth management and diversifying income streams. The conversation shifts to the tech industry, with Sonja Martin from DZ Bank joining to discuss the Bank of Japan's press conference and its potential impact on markets. They also cover other earnings reports and the implications of the Federal Reserve's upcoming decisions.
🛫 Airbus' Business Update and Market Analysis
A detailed discussion on Airbus' business performance and its space division review is presented. L'Oreal's sluggish sales growth is also highlighted. The conversation includes the impact of the Bank of Japan's interest rate hike on the Yen and the potential ripple effects in the market. Experts weigh in on the central bank's policies and their economic implications, with a focus on wage hikes and price increases.
💼 Business Strategies and Market Reactions
This segment focuses on business strategies, particularly HSBC's $3 billion share buyback and its impact on the market. Noel Quinn, HSBC's CEO, discusses the bank's strong capital ratio and the confidence in future performance despite interest rate fluctuations. Kriti and Anna also analyze market reactions to various earnings reports and the implications of the Federal Reserve's decisions on the economy.
🌟 Earnings Season and Central Bank Policies
Alicia, a chief economist, provides insights into the earnings season and central bank policies, particularly the Federal Reserve's potential rate cuts. She discusses the impact of these policies on the market and the importance of the timing of such cuts. The conversation also touches on the ECB's approach and the potential for more rate cuts in the future.
📊 Market Analysis and Geopolitical Tensions
The hosts analyze market movements, focusing on the impact of earnings reports and geopolitical tensions on stock prices. They discuss the performance of various companies, including JD Pet, GSK, and the challenges faced by different sectors due to global economic conditions. Morgane Delledonne from Global X Management shares her perspectives on the earnings season and the implications of tech investments on company performance.
🚀 Tech Industry Investments and AI Developments
The conversation centers on the tech industry's investments in AI and the potential for monetization of these technologies. Morgane Delledonne discusses the importance of vertical integration in tech sectors and the growth of cybersecurity and cloud technologies. She also touches on the productivity gains from automation and the potential impact of higher interest rates on the sustainability of these gains.
🛍️ Corporate Earnings and Market Performance
This segment provides a roundup of corporate earnings and market performance, with a focus on companies like ASML, LVMH, and Novartis. The hosts discuss the impact of chip export news on ASML's stock price and the potential exclusion of certain countries from U.S. trade restrictions with China. They also cover L'Oreal's disappointing results and the challenges faced by the luxury sector.
🏢 HSBC's Capital Distribution and Future Strategy
Noel Quinn, outgoing CEO of HSBC, discusses the bank's capital distribution strategy, including a $3 billion share buyback and new targets for returns by 2025. He highlights the bank's reduced sensitivity to interest rate declines and the growth in alternative revenue streams. The conversation also touches on HSBC's performance in wealth management and fee income.
📉 BBVA's Earnings and Market Reaction
BBVA's earnings report reveals a net trading income beat, but the stock price drops, possibly due to concerns about the bank's ongoing takeover bid and the potential impact on shareholder value. Bloomberg Intelligence comments on the bank's performance, noting the disparity between the reported earnings and the market's reaction.
🛫 Airbus' Business Review and Supply Chain Challenges
Airbus' CEO discusses the company's first-half performance, which includes close to $1 billion in charges due to underestimated risks in contract signing. The company is reportedly reviewing its business subsidiary and all options are on the table. Analysts note that despite supply chain issues and reduced annual focus, Airbus managed to beat estimates on EBIT and tax flow due to better pricing on aircraft.
🔍 Middle East Tensions and Market Implications
The conversation turns to Middle Eastern tensions following an Israeli airstrike that killed a Hamas political leader in Tehran. The implications of this event for the region and its potential impact on oil and other markets are discussed. There is also an analysis of the reactions from other countries and the potential for further escalation.
📈 Yen Volatility and BOJ Policy Decisions
The Yen's volatility is analyzed in the context of the Bank of Japan's decision to increase interest rates and retract bond buying programs. Despite initial market reactions, the Yen has settled unchanged against the dollar. The discussion includes the potential impact of the BOJ's hawkish messaging and the market's response to it.
🏬 Adidas' Business Strategy Amidst Retail Challenges
Adidas' business strategy is highlighted as the company attempts to reduce reliance on a brand that has driven profits in recent years. The new CEO's efforts to embrace a German brand and turn the page on the company's direction are discussed. The conversation contrasts Adidas' performance with other retailers and the challenges faced by the industry.
📉 L'Oreal's Dermatology Business and Global Growth
L'Oreal's earnings report shows weakness in the dermatology business, which was expected to be a booming sector. The company's global growth is sluggish, with a particular downturn in the sunscreen category. The conversation explores the reasons behind these trends and the impact on the consumer market.
🛫 Boeing's Earnings and Market Expectations
Boeing's upcoming earnings report is anticipated amidst the company's ongoing challenges. The conversation discusses the potential implications of the earnings report for the aviation industry and the market's expectations in light of recent developments with Airbus.
Mindmap
Keywords
💡ASML Shares
💡US Allies Exempt
💡BOJ Hikes Interest Rates
💡Earnings Season
💡Geopolitical Tensions
💡null
💡Brent Crude
💡Net Interest
💡Microsoft Growth
💡AI
💡Fed Decision
💡Project 2025
💡Airbus
💡L'Oréal
Highlights
ASML shares surge on reports that US allies may be exempt from chip export curbs.
Bank of Japan's unexpected interest rate hike leaves the Yen unchanged ahead of the Federal Reserve's decision.
Earnings season continues with mixed results, including HSBC's full-year adjusted EPS within the expected range and an upgrade from GSK.
Microsoft's stock drops despite massive growth, as earnings slightly miss expectations, indicating potential market cracks.
Bloomberg's Japan Economist Tarobo discusses the significance of the BOJ's interest rate hike and its implications for policy normalization.
FX flows and the impact of BOJ's tightening on Japanese real money such as pension funds are examined.
Anna and Kritika discuss the potential for rate cuts by the Federal Reserve, with a focus on the timing and market expectations.
A detailed analysis of the geopolitical tensions in Venezuela and their influence on FX markets.
HSBC's CEO Noel Quinn announces a $3 billion share buyback, reflecting confidence in the bank's financial performance.
L'Oréal reports sluggish sales growth, with a significant miss in the second quarter, particularly in the dermatology unit.
Airbus shares rise despite profit warnings, as the company reassesses its aerospace division and supply chain challenges.
The potential impact of the US midterm elections on fiscal policy and the economy is discussed, with Vice President Harris leading in the polls.
A deep dive into market reactions to the BOJ's decision, with experts Sonja Martin and Alicia Herrara providing insights.
The implications of the US considering exemptions for Japan, South Korea, and the Netherlands in chip export restrictions to China.
A review of individual stock movers, including HSBC's rise and BBVA's decline amidst a hostile takeover.