In Japan, the yen has strengthened significantly as equities have fallen. Asian markets were mostly higher. The Nikkei 225 fell another -0.53% while the Shanghai Composite rebounded a modest +0.14%. European markets strengthened. The DAX Index rallied +0.65%. 10-year Bunds yield 2.408%. For 07/20 Baker Hughes reported the U.S. rig count gained 17 to 800. June Personal Income was up a modest +0.2% vs. +0.4% est., Personal Consumption Expenditures rose +0.3% and on target with estimates, and the PCE Price Index crept up +0.1%, also on track with estimates. Core PCE (the Fed’s favorite inflation gauge) was +2.6% YoY vs. +2.5% consensus, with SuperCore PCE up +0.2% MoM (+2.43% YoY) for the 50th consecutive monthly gain. Final July Consumer Sentiment edged up +0.4, printing at 66.4 (an 8-mo low) and slightly above 66.0 estimated, and Year-ahead Inflation Expectations met consensus of +2.9%. 10-Year Notes yield 4.198%. The Sep. US$ Index dipped -0.06% to 104.050. Sep. Crude Oil weakened -1.2% to $77.23. Aug. Gold settled +1.2% higher at $2,381.00. Bitcoin surged +5% to $67,953. The mega cap tech tickers that took a beating earlier this week bounced overnight and into the open, driving the major indexes upwards. By the close all major indexes had made solid gains.

In another move to boost the economy, the PBOC cut medium-term lending rates. Conversely, Japan is said to be considering raising rates. Asian markets tracked the Wall Street selloff lower. The Nikkei 225 collapsed -3.28% and the Shanghai Composite fell -0.52%. European markets were mixed. The DAX Index fell -0.48%. 10-year Bunds yield 2.422%. For 07/20 Initial Claims eased to 235K. Advance Q2 GDP surged, doubling from +1.4% in Q1 to +2.8%, and printing far above +2.0% expected, and Personal Consumption Expenditures rose +2.3%, much hotter than +1.9% est. June Durable Goods Orders slumped -6.6% (although ex-transportation was up +0.5% vs. +0.2% est.), well below +0.3% est. In more advance data, the June Intl Trade in Goods deficit narrowed to $-96.8B, Retail Inventories climbed +0.7%, and Wholesale Inventories added +0.2%. The July KC Fed Mfg. Index went from -8 to -13. 10-Year Notes yield 4.267%. The Sept. US$ Index inched up +0.02% to 104.145. Sept. Crude Oil added +0.9% to $78.28. Aug. Gold plunged -2.4% to a 2-wk low of $2,357.50. Today’s $44B 7-Yr Note auction found solid demand. After hours, U.S. stock index futures retreated, pared most losses, sank again after the open, then surged to strong gains. At midday gains evaporated, with the ES and NQ ending red!

Asian markets were lower as tech and EV shares sank following disappointing earnings from Alphabet and Tesla. The Nikkei 225 dropped -1.11%, the Shanghai Composite lost -0.46%. European markets were red. DB shares sank -8% after reporting its 1st quarterly loss in 4 years on the back of commercial real estate losses. The DAX Index sank -0.92%. 10-year Bunds yield 2.446%. The Bank of Canada cut rates for the second time in a row. For 07/20 the MBA Mortgage Apps Index fell from +3.9% to -2.2% (15% of agreements cancelled, highest percentage of any June), and EIA Crude Inventories improved to -3.7M bbls. June New Home Sales printed at 617K (down -0.6% MoM vs. +3.4% exp.), vs. 640K est. (May revised from -11.3% MoM to -14.9%). YoY New Sales are off -7.4%. Homebuyer confidence printed an all-time low. Flash July Composite PMI hit a 27-mo high of 55.0 (mfg. 49.5 vs. 51.6 est., and services 56.0 vs. 55.0 est.). 10-Year Notes yield 4.288%. Today’s $70B 5-Yr Note auction saw poor demand. The September US$ Index faded -0.06% to 104.110. September Crude Oil gained +0.8% to $77.59. August Gold fell -0.27% to $2,400.70. Overnight, indexes weakened, continuing to sell off early and ending deeply red. For the 1st time in 346 days the SPX closed more than -2.0% lower!