Key Takeaways

• FOMC minutes may reveal more officials turning dovish
• Investors adjust strategies as market predicts high rates persist
• Tesla continues price cuts in China, this time for Model S/X
• TGT exceeds expectations, EPS US$1.80
• JD beats estimates with EPS US$0.74, sales US$39.71B

I. Market Report

Stock futures are near flat Wednesday as traders awaited the release of the minutes from the Federal Reserve’s July meeting minutes. Wall Street was coming off a losing session that marked the latest leg down in an August slump, according to CNBC.

As of 20:39 am ET (or 20:39 in Malaysia), Dow futures rose by 0.06%. Futures linked to the S&P 500 were 0.03% higher, and Nasdaq-100 futures gained by 0.03%.

II. Pre-Market Movers

As of 08:10 am ET (or 20:10 in Malaysia), top premarket movements are as follows:

Stock	Chg. %	Company
EBET	69.15%	$Esports Technologies, Inc. EBET$
NVOS	63.87%	$Novo Integrated Sciences Inc Ordinary Shares NVOS$
LIFW	49.41%	$MSP Recovery, Inc. - Class A Common Stock LIFW$
DLO	30.25%	$DLocal Limited DLO$
RAYA	20.15%	$Erayak Power Solution Group Inc. RAYA$
SRM	-18.48%	$SRM Entertainment, Inc. SRM$
COHR	-23.30%	$Coherent, Inc. COHR$
CTM	-23.31%	$Castellum, Inc. CTM$
IMPL	-28.38%	$IMPEL NEUROPHARMA, INC. IMPL$
SPGC	-36.15%	$Sacks Parente Golf, Inc. SPGC$

Dearest M+Global Mobile App Users: We are pleased to inform you that our app now supports pre/after-market trading for US stocks. The trading hours for these sessions are as follows:

• Pre-market: 16:00 to 21:30 in Malaysia
• After-market: 04:00 to 08:00 the next day in Malaysia

Please note that regular trading hours are from 21:30 to 04:00 UTC.

III. Flash Headlines

FOMC Minutes May Reveal More Officials Turning Dovish Amid Good Economic Data

The upcoming release of the Federal Reserve’s July policy meeting minutes has Wall Street betting on a pause in interest rate hikes in September. Economists, Anna Wong and Stuart Paul predict that only a few officials support keeping rates steady for the rest of the year, but with positive economic data, more officials may join the “dovish camp” under Chairman Powell.

The minutes will be closely scrutinized for clues on the Fed’s next move and officials’ views on the strength of the US economy.

Investors Adjust Strategies as Market Predicts High Rates to Persist

Investors are adjusting their strategies as Oaktree Capital warns that high rates may persist for longer than expected.

The firm has changed its funding allocation to focus on investing in floating-rate debt, anticipating that rates will remain high for an extended period of time. This comes as more people believe the US Federal Reserve will avoid pushing the economy into a recession while successfully curbing inflation. As a result, investors are willing to take on more risk or reduce their bets on safe-haven assets like government bonds.

However, Oaktree faces stricter requirements for leveraged financing, and borrowers may be more susceptible to higher borrowing costs in this area.

Saudi Arabia Accelerates Selling US Treasury Bonds, Reducing Holdings to Lowest Level in 6 Years

Saudi Arabia has reduced its holdings of US Treasury bonds to the lowest level in over six years, with analysts attributing the move to the country’s increased allocation of oil wealth to higher-risk asset classes.

According to data from the US Treasury Department, the Gulf state sold over US$3 billion of US Treasury bonds in June, marking the third consecutive month of selling and reducing its holdings to US$108.1 billion.

Neighbouring UAE also sold nearly US$4 billion of US Treasury bonds.

Since the beginning of 2020, Saudi Arabia has accelerated its selling of US Treasury bonds, reducing its holdings by over 41%.

US Gasoline Prices Hit New Highs, Potential Inflation in August

Gas prices in the United States have unexpectedly surged to a new high for the year, with the average retail price of gasoline reaching US$3.86 per gallon, up 7% from the previous month, due to strong demand and a series of refinery shutdowns, according to data from the American Automobile Association (AAA).

In California and Washington state, gasoline prices have soared to over US$5 per gallon.

Goldman Sachs analysts predict that the average price of retail gasoline in the US this month will be US$3.90 per gallon.

Patrick De Haan, petroleum analyst director at price-tracking company GasBuddy.com, said that “it’s quite abnormal to see gas prices rise at this time, and typically we would see prices fall as we get into the fall season.”

Conflict in Ukraine Leads to Wheat Futures Rebounding From June Lows

After the destruction of a Ukrainian port on the Danube River due to escalating conflict between Russia and Ukraine, wheat futures prices rebounded from their lowest levels since June, further exacerbating tensions in the key Black Sea region.

Wheat futures prices rose 1.3% after falling 6% over the past three trading days, and as of writing, the futures were up 1.13% to US$6.04 per bushel.

Japan’s Tourism Recovers to 78% of Pre-Pandemic Amid Weaker Yen

Foreign tourist arrivals to Japan in July exceeded 2 million for the second consecutive month, with the number of visitors reaching around 78% of pre-pandemic levels, according to the Japan National Tourism Organization (JNTO).

The strong data suggests that foreign tourists’ spending, boosted by the depreciation of the yen, will continue to support Japan’s economic recovery. In the second quarter ending in June, Japan’s net exports grew significantly, contributing to higher-than-expected economic growth for the world’s third-largest economy.

Expenditures related to inbound tourism are a component of this growth, with tourist spending in July recovering to 95.1% of the same period in 2019 before the pandemic.

IV. Stocks to Watch

Tesla Continues Price Cuts in China

Tesla ($Tesla Motors, Inc. TSLA$ ) has reduced the prices for its premium Model S and Model X vehicles in China, its second price cut in the country this week, multiple media outlets reported Wednesday, citing the company.

• The Model S starts at CNY754,900, a 6.7% decrease from CNY808,900 earlier.
• The Model X starts at CNY836,900, down 6.9% from CNY898,900 earlier.

--Reuters reported, citing a company post on social media platform Weibo.

The price cut comes just two days after the company reduced the Model Y sport utility vehicle long range and performance versions by CNY14,000 and extended an insurance subsidy for the basic version of the Model 3 sedan, Bloomberg reported.

The new price reductions also come after the company's China-made vehicle sales decreased 31% in July from June, its first month-on-month decline since December, Reuters reported.

Intel Announced the Termination of Its Acquisition of Tower Semiconductor

Intel ($Intel Corporation INTC$ ) announced that it has reached an agreement with Tower Semiconductor ($Tower Semiconductor Ltd TSEM$ ) to terminate the previously disclosed acquisition agreement.

This decision comes as Intel was unable to obtain the necessary regulatory approvals for the merger in a timely manner. As per the terms of the merger agreement, Intel will pay Tower Semiconductor a termination fee of US$353 million.

Baidu: PaddlePaddle Ecosystem Gathers 8M Developers, Creates 800K Models

Wang Haifeng, chief technology officer of Baidu ($Baidu, Inc. Sponsored ADR Class A BIDU$ ), revealed at WAVE SUMMIT Deep Learning Developer Conference 2023 that its PaddlePaddle ecosystem has so far coalesced with 8 million developers, served 220,000 enterprises and institutions, and created 800,000 models, harnessing the deep learning open source platform at PaddlePaddle industry level and ERNIE foundation model.

COIN Climbs Pre-Market at Regulatory Approval to Offer Crypto Futures in US

Coinbase Global ($Coinbase Global, Inc. COIN$ ) said Wednesday it has received approval from the National Futures Association to offer regulated crypto futures trading to US customers.

The approval to operate a futures commission merchant will allow customers to trade crypto assets through Coinbase Financial Markets using borrowed funds, the company said.

Coinbase Global shares once rose 5.6% in Wednesday's pre-market.

NaaS Forms EV-Charging Partnership With Beijing-Hyundai

NaaS ($NaaS Technology Inc. NAAS$ ) said Wednesday it has formed a partnership with Beijing-Hyandai, a Chinese subsidiary of Hyundai Motor Group to develop an efficient charging management service for Hyundai cars.

Under the collaboration, Hyundai cars will be equipped with "charging services and solutions for order management", NaaS said.

The companies will also work together to empower potential electric vehicle charging businesses, according to NaaS.

Earnings Today:

TGT’s Financial Report Exceeds Expectations

Target ($Target Corporation TGT$ ) reported better-than-expected financial results.

The company posted earnings of US$1.80 per share, surpassing the analyst consensus estimate of US$1.39 by 29.5%. This marks a significant increase of 361.54% compared to earnings of US$0.39 per share from the same period last year.

However, quarterly sales were reported at US$24.77 billion, slightly missing the analyst consensus estimate of US$25.18 billion by 1.62%. This represents a 4.85% decrease in sales compared to US$26.04 billion in the same period last year.

Target Q2 2023 Financial Results
Earnings Per Share	$1.80
Analyst Consensus Estimate	$1.39
Year-over-Year Earnings Growth	361.54%
Sales	$24.77B
Analyst Consensus Estimate	$25.18B
Year-over-Year Sales Growth	-4.85%

Editor's note: This table was generated by M+ Global's in-house AI-enabled SaaS tool and was reviewed by our editing team.

JD.com Q2 Adj EPADS US$0.74 Beats US$0.66 Estimate, Sales US$39.71B Beat US$38.71B Estimate

JD.com ($JD.com, Inc. Sponsored ADR Class A JD$ ) reported quarterly earnings of US$0.74 per share which beat the analyst consensus estimate of US$0.66 by 12.12%. This is a 21.31% increase over earnings of US$0.61 per share from the same period last year.

The company reported quarterly sales of US$39.71 billion which beat the analyst consensus estimate of US$38.71 billion by 2.58%. This is a 0.61% decrease over sales of US$39.95 billion the same period last year.

JD.com Q2 2023 Financial Results
Earnings Per Share	$0.74
Analyst Consensus Estimate	$0.66
Year-over-Year Earnings Growth	21.31%
Sales	$39.71B
Analyst Consensus Estimate	$38.71B
Year-over-Year Sales Growth	-0.61%

Editor's note: This table was generated by M+ Global's in-house AI-enabled SaaS tool and was reviewed by our editing team.

V. Calendar

Earnings:

Pre-Market/Regular:
$TJX Companies, Inc. TJX$
$Target Corporation TGT$
$JD.com, Inc. Sponsored ADR Class A JD$
After-Market:
$Cisco Systems, Inc. CSCO$
$Synopsys, Inc. SNPS$
$AMCOR PLC AMCR$

IPO:

No new listings today

Events:

20:30 GMT+8 US Building Permits (MoM) (Jul), Housing Starts (MoM) (Jul)
21:15 GMT+8 US Capacity Utilization Rate (Jul), Industrial Production (YoY Jul MoM), Manufacturing Production (MoM) (Jul)
22:30 GMT+8 US EIA Reports
02:00+1 GMT+8 US FOMC Meeting Minutes

Finally, just a little reminder:

The regular trading hours for US stocks in summer times are from 21:30 to 04:00+1 GMT+8, with pre-market trading available from 16:00 to 21:30.

Have a nice trading day!

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