Overnight US stocks | The Dow ended five consecutive gains Western Digital (WDC.US) fell 13%, crude oil strengthened, and the market focused on non-agricultural reports
The Zhitong Finance App learned that on Thursday, the three major indices fell, ending the previous five consecutive trading days of gains for the Dow. Oil prices have risen. Earlier, Iran's national news quoted a member of the country's parliament as reporting that a draft on the conditions for the passage of ships in the Strait of Hormuz will allegedly ban US and Israeli ships from passing through this key waterway. Iran's state news agency Fars said that the plan is currently being reviewed by Iran's parliamentary committee. Furthermore, market focus turned to Friday's non-farm payrolls report.
[US stocks] At the close, the Dow fell 464.02 points, or 0.85%, to 53885.10 points; the NASDAQ fell 15.09 points, or 0.06%, to 26348.35 points; the S&P 500 index fell 13.53 points, or 0.18%, to 7710.02 points. SanDisk (SNDK.US) fell 6.8%, Western Digital (WDC.US) fell 13%, SK Hynix (SKHY.US) fell 5%, and SpaceX (SPCX.US) rose 6%. The Nasdaq China Golden Dragon Index closed up 0.27%, while Alibaba (BABA.US) fell 1%.
[European stocks] The German DAX30 index rose 20.00 points, or 0.08%, to 26159.03 points; the British FTSE 100 index fell 15.39 points, or 0.14%, to 10872.91 points; the French CAC40 index rose 30.41 points, or 0.35%, to 8699.71 points; the European Stoxx 50 index rose 30.27 points, or 0.47%, to 6507.25 points; Spain's IBEX35 index rose 122.90 points, or 0.61%, to report 2017 9.90 points; Italy's FTSE MIB index rose 259.20 points, or 0.48%, to 53706.00 points.
[Asian Stock Market] The Nikkei 225 Index fell 0.93%, and the Korea Composite Stock Price Index fell 4.58%.
[US Dollar Index] The US dollar index, which measures the US dollar against the six major currencies, rose 0.25% on the same day and closed at 99.930 at the end of the foreign exchange market. As of the end of the exchange market in New York, 1 euro was worth 1.1524 US dollars, lower than 1.1553 US dollars on the previous trading day; 1 pound was worth 1.3457 US dollars, lower than 1.3469 US dollars on the previous trading day. 1 US dollar was worth 158.33 yen, up from 157.67 yen on the previous trading day; 1 US dollar was worth 0.8122 Swiss franc, higher than 0.8069 Swiss franc on the previous trading day; 1 US dollar was worth 1.4014 Canadian dollars, higher than 1.4008 Canadian dollars on the previous trading day; 1 US dollar was worth 9.5068 SEK, up from 9.4832 on the previous trading day.
[Cryptocurrency] Bitcoin hovered above $64,000 to $64,402.18; Ethereum fell 0.12% to $1904.
[Crude oil] Light crude oil futures for September delivery on the New York Mercantile Exchange rose $2.07, or 2.75%, to close at $77.29 a barrel; London Brent crude oil futures for October delivery rose $3.04, to close at $82.49 a barrel, or 3.83%.
[Precious Metals] Spot gold fell slightly by 0.14% to $4240.27; spot silver reported $61.533.
[Macro News]
Trump: An agreement with Iran may be reached soon, and the straits are somewhat open. US President Trump signed an executive order on birthright citizenship and polysilicon tariffs at the White House on Thursday local time. On the Iran issue, Trump said, “The war with Iran will soon end. I am participating in negotiations with Iran, and an agreement may be reached soon. I don't think Iran will last long. The Strait of Hormuz has yet to reach an agreement, but the strait is currently “to some extent” considered open. Currently, the Strait of Hormuz is controlled by us.” Trump also mentioned the arms supply issue: “We are currently in good shape, we have unlimited supplies, but we always want more ammunition. We have stocks of supplies all over the world, and if needed, we will take the initiative to pick them up.”
The US is considering delaying tariffs on polysilicon-related products. On the 6th local time, we learned that Trump administration officials are considering delaying the planned tariffs on solar panels and other polysilicon-containing products for several months. People familiar with the matter said that US President Trump may order the implementation of the relevant tariffs as soon as Thursday, but officials are considering setting a transition period of 90 to 120 days. According to reports, this arrangement may prompt companies involved in US renewable energy projects to speed up imports before tariffs are officially imposed.
US crude oil imports from Saudi Arabia fell to zero in July for the first time in more than 40 years and were interrupted for the first time in more than 40 years. According to preliminary data from the US government, US crude oil imports from Saudi Arabia fell to zero in July of this year. This is the first time since 1985 that no Saudi crude oil has been imported for the entire month. Data released by the US Department of Energy on Wednesday local time shows that Saudi crude oil shipments to the US in July have completely stopped shipping. Considering that US refineries purchased more than 800,000 barrels of Saudi crude oil per day earlier this year, this drop is significant. As the closure of the Strait of Hormuz and other war-related supply disruptions boosted crude prices linked to global benchmark oil prices, US refineries have been looking for alternative supplies of Saudi crude oil. Saudi crude oil deliveries to the US have fallen to zero in individual weeks in history, but July was the first time in more than 40 years that an entire month fell to the lowest level. According to Kpler data, US crude oil imports from Saudi Arabia are expected to return to about 300,000 b/d this month, in line with recent historical normal levels.
[Individual Stock News]
SpaceX plans to build its own natural gas power plant and large-scale energy storage facility for the Texas chip plant. SpaceX (SPCX.US) plans to build its own power facility for Terafab, a large-scale semiconductor manufacturing plant developed with Tesla in Texas, USA. Riley Trettel, who is responsible for SpaceX's energy and data center development business, said on Wednesday in Grimes County, Texas: “We will be self-sufficient, we will build gas power plants, and we will also build very large battery arrays to store energy.” These remarks provided new details on plans for new factories being promoted by Musk's two largest companies. The surge in electricity demand from data centers and new plants is driving demand for new natural gas power plants, and Musk has long preferred a vertical integration model. This is not the first time that Musk and its companies have participated in the Texas energy market. Tesla produces large-scale grid-grade battery energy storage equipment called Megapack and owns a Megapack plant in western Houston.
Nvidia is reportedly considering lowering the memory capacity of Rubin Ultra chips. According to reports, Nvidia (NVDA.US) is considering a major measure to deal with the shortage of high-end high-bandwidth memory chips. Nvidia is considering using a lower graphics memory configuration than originally planned for the next generation Rubin Ultra graphics processor. People familiar with the matter revealed that Nvidia has tested at least three versions of Rubin Ultra video cards in the past few weeks, and some versions have lower memory than the specifications initially announced. Part of the reason for this adjustment is that it may not be able to obtain enough high-end memory to meet the supply requirements of the original design. Reduced video memory will have an impact on chip performance, but Nvidia can make up for it in other ways. However, if other artificial intelligence companies use this reduced video memory chip to run large-scale AI models, they will need to use more chips than the original one.
Alphabet's hyperscale bond offering received $115 billion in orders. Alphabet (GOOG.US) received orders of about $115 billion in the latest round of hyperscale bond issuance, indicating that investors have regained interest in debt related to the AI boom after the recent sell-off. According to people familiar with the matter, this bond issuance attracted four times more demand than the expected maximum issuance of 25 billion US dollars. This demand exceeds the subscription scale obtained by companies such as Amazon and SpaceX recently issued other AI-related bonds. Alphabet's current bond issuance provided investors with relatively high issuance benefits to attract demand.
Tesla: Terafab plans to launch a goal of over 1 terawatt of computing power per year in Texas. Tesla (TSLA.US) said that earlier this year, SpaceX and Tesla announced the launch of the “Terafab” project, which is the world's largest chip manufacturing program, integrating logic chips, memory chips, and advanced packaging technology in the same facility. In April, Tesla broke ground on a new R&D fab in the Texas Gigafactory North Campus, the predecessor of Terafab. Today, we officially announced that Terafab will be located in Grimes County, Texas. The facility will be an advanced semiconductor fab designed to bridge the huge gap between current global chip supply capacity and future computing needs. SpaceX and Tesla's combined demand for chips is expected to exceed 1 terawatt (TW) of computing power, which far exceeds current global supply capacity. We highly appreciate existing chip suppliers and encourage them to expand production capacity where possible, but the growing gap between supply and demand in the future is the core reason the Terafab project exists. Terafab's goal is to create new computing power at an unprecedented scale and speed. The project plans to build a vertically integrated plant with a manufacturing area of over 100 million square feet. The facility will cover the manufacturing, packaging, and testing of advanced logic chips and memory chips. Centralizing these processes in one place helps enable rapid iterative improvements and accelerate the deployment of new computing capabilities.
[Major Bank Ratings]
BNP Paribas: Raised Western Digital (WDC.US) target price from $660 to $700.