Preview of US Stock Market | Nasdaq futures fell more than 1.5%, and Asmae's performance fell more than 8% after the results.

1. Before the US stock market opened on Wednesday, the futures of the three major US stock indexes all fell. As of the time of writing, Dow Jones futures fell by 0.31%, S&P 500 futures fell by 1.02%, and Nasdaq futures fell by 1.56%. 2. As of the time of writing, the Germany DAX index fell by 0.86%, UK FTSE 100 index fell by 0.34%, French CAC40 index fell by 0.56%, and European Stoxx 50 index fell by 1.32%. 3. As of the time of writing, WTI crude oil rose by 0.43%, to $80.05 per barrel. Brent crude oil rose by 0.29%, to $83.97 per barrel. Market News Is a rate cut really coming? Market bets on a 100% probability of a rate cut by the Federal Reserve in September. Investors believe that the Federal Reserve will lower interest rates before the end of the September meeting. According to data from the Chicago Mercantile Exchange's FedWatch tool, as of Tuesday morning, the market predicts a 100% probability of a rate cut in September, up from 70% a month ago. Recent data has shown that the labor market remains soft, inflation pressures have eased, especially in all major housing categories. Economists and investors all believe that once inflation falls close to the Fed's 2% target, the Fed will quickly start cutting rates. Chief US economist at Deutsche Bank AG, Matthew Luzzetti, wrote in a research report on July 12: "Recent data shows that the labor market remains soft, and inflation pressures have eased significantly, especially in all major housing categories." The report includes predictions for a rate cut in September. Federal Reserve official Williams suggests a rate cut is imminent, but not ready yet. According to reports from the Wall Street Journal, Federal Reserve official Williams hinted that if there continues to be a slowdown in inflation in the near future, there may be reason to cut rates in the coming months, but not at the Fed meeting in two weeks. Williams also stated that signs indicate the US labor market is gradually cooling, and the inflation data for three months ago have "brought the Fed [] closer to the inflation downturn we anticipate." These are positive signs. He hopes to see more data to gain further confidence that inflation is moving towards our target of 2%. His remarks suggest that the Fed may consider cutting rates at the mid-September meeting, provided that there are no major surprises in the economic situation. As the "rate cut trade" sweeps the globe, JP Morgan's leader calls for the Federal Reserve to exercise patience. Jamie Dimon, CEO of Wall Street banking giant JPMorgan Chase, stated in a media interview on Wednesday that the Federal Reserve needs to exercise patience with the next monetary policy adjustment to address the possibility of rising inflation in a turbulent world. He stated, "There's no denying that inflation is moving in the right direction. But it would be better if the Fed could firmly maintain patience." It is worth noting that while the head of JP Morgan calls for caution from the Fed, expectations of a rate cut by the Fed are increasing in the interest rate futures market, with a growing global demand for assets like gold and US bonds benefiting from a rate cut cycle. Calls for a July rate cut heat up! Economists warn: the Federal Reserve has waited too long, policy adjustments need to be preemptive. Increasing numbers of Wall Street economists are warning that the Federal Reserve has waited too long to reverse policy after raising benchmark interest rates to their highest level in 20 years. Mild inflation data over the past three months, along with slowing US economic growth and rising unemployment rates, are leading to calls for a rate cut at the policy meeting set to take place in two weeks. A rate cut by the Fed in July seems highly unlikely. Federal Reserve Chairman Powell stated at an event on Monday that he would not provide any guidance on the timing of a rate cut, and most of his colleagues on the Federal Open Market Committee (FOMC) seem to still be unconvinced of the need for emergency measures. Bond traders shift focus to the "Trump trade," betting optimistically on the prospect of a Fed rate cut. In the US Treasury futures and options markets, traders are increasingly betting that the Federal Reserve will cut rates sooner and by a larger margin. With the so-called Trump trade already underway, traders are focusing on the Fed's policy moves. On Monday, options related to the Secured Overnight Financing Rate (SOFR) saw new bets dominating, with targets either being a significant rate cut in September or the start of a loose cycle later this month. Dovish trades are becoming popular in the derivatives market, with more and more traders of SOFR options and federal funds futures preparing for low borrowing costs in the world's largest economy. This month, the forward market has started reflecting the likelihood of two rate cuts in September, each by 0.25 basis points, with a 50% chance of a third rate cut by the end of the year. Municipal bond sales in the US see a "boom" as investors "flock" to put up real money. The issuance of municipal bonds in the US is soaring at the fastest pace in weeks. As expectations grow for a rate cut by the Federal Reserve starting in September, bond issuers are closely watching the prospects of lower borrowing costs. State and local governments in the US are expected to sell $16.1 billion in bonds in the next 30 days, a number that may only be a small portion of what actually enters the market, as deals are typically announced within less than a month. Data shows that this figure represents the fastest pace of new bond issuance since early June, about 68% higher than the 12-month average. Sales of municipal bonds in the US have sharply increased this year. Data compiled by Bloomberg show that borrowers issued $246 billion in long-term bonds in 2024, a 36% increase compared to last year. Stock News Interactive Brokers Group, Inc. Class A (IBKR.US) reports mixed Q2 earnings, with a 26% increase in commission income year-on-year.Class AQ2's net revenue was $1.23 billion, a year-on-year increase of 23%, lower than market expectations; net profit attributable to common stockholders was $179 million, compared to $125 million in the same period last year; adjusted earnings per share were $1.76, better than market expectations, compared to $1.32 in the same period last year. Due to the increase in benchmark interest rates, customer margin loans, and customer credit balances, net interest income increased by 14% to $792 million year-on-year. Customer accounts increased by 28% year-on-year, reaching 2.92 million. Daily Average Revenue Trades (DART) increased by 28% year-on-year, to 2.39 million. The Board of Directors of Interactive Brokers Group, Inc. Class A announced a quarterly cash dividend of $0.25 per share.ASML Holding NV ADR (ASML.US) financial report has both positives and negatives: Q2 orders exceeded expectations, but Q3 revenue and gross margin guidance were below expectations. ASML Holding NV ADR's total revenue for the second quarter reached 6.24 billion euros, an increase of 18.0% compared to the previous quarter, but a decrease of 9.6% year-on-year, surpassing the upper limit of the management's 6.2 billion euro guidance and analyst expectations of 6 billion euros; net profit was 1.578 billion euros, an increase of 28.92% compared to the previous quarter's 1.224 billion euros; the gross margin also remains at a high level of 51.5%, exceeding the upper limit of the management's 51% guidance and analyst expectations of 50.6%. In addition, the company's order amount for the second quarter increased to 5.57 billion euros, far exceeding market expectations of 4.41 billion euros. Looking ahead to the third quarter, ASML Holding NV ADR expects total revenue to be between 6.7 billion euros and 7.3 billion euros, below analyst expectations of 7.46 billion euros, and the gross margin is expected to be between 50% and 51%, also lower than the market expectation of 51.1%. The stock fell more than 8% before the market opened. Johnson & Johnson (JNJ.US) Q2 revenue increased by 4.3% year-on-year, and the full-year earnings guidance was lowered. Johnson & Johnson's second-quarter revenue was $22.45 billion, higher than the $21.52 billion in the same period last year, a 4.3% increase year-on-year, exceeding market expectations of $22.31 billion; Johnson & Johnson's second-quarter earnings per share were $2.82, higher than the $2.56 in the same period last year, surpassing market expectations of $2.70; Johnson & Johnson's second-quarter net profit reached $4.69 billion, compared to $5.14 billion in the same period last year. The company has lowered its adjusted earnings per share guidance for the full year to $9.97 to $10.07, down from the previous range of $10.57 to $10.72, with analysts predicting earnings of $10.29. Amazon.com, Inc. (AMZN.US) Prime Day annual shopping event encountered a "hiccup": the advertising portal crashed, causing about two hours of downtime. According to multiple Amazon.com, Inc. sellers and consultants, the company's marketing portal for businesses crashed on Tuesday night, causing trouble for one of the online retailer's biggest promotion events this year. The Amazon.com, Inc. advertising portal is a self-service system where businesses and brands can adjust their advertising budget and bid on keywords for their products to appear in consumer searches. Without this online interface, brand advertising spending on Amazon.com, Inc. would operate without clear guidance or information. Momentum Commerce, which manages brands in 50 different product categories, said the two-day Prime Day promotion got off to a strong start on Tuesday, with sales in the first seven hours up nearly 12% compared to the same period last year. Regulatory storm sweeps tech giants! Rumors of the U.S. FTC investigating Amazon.com, Inc. (AMZN.US) and AI startup Adept collaboration. The U.S. Federal Trade Commission (FTC) has launched an informal investigation into the collaboration between Amazon.com, Inc. and artificial intelligence (AI) startup Adept. The FTC is seeking more information about an agreement announced last month that involved Amazon.com, Inc. hiring key executives from Adept and obtaining technology licenses. This comes as U.S. and overseas regulatory agencies are increasingly scrutinizing investments in tech companies and partnerships with AI startups. The UK Competition and Markets Authority said on Tuesday that it had launched an investigation into Microsoft Corporation's recruitment of top talent from startup Inflection AI. In a report released in April, the agency warned that collaborations between Microsoft Corporation and Inflection AI, as well as Amazon.com, Inc. and AI startup Anthropic, could allow them to "shape these markets to their own advantage." Important Economic Data and Events Announcement 20:30 Beijing time: U.S. June Building Permits MoM (%) preliminary value, U.S. June Housing Starts Annualized MoM (%). 21:15 Beijing time: U.S. June Industrial Production MoM (%). 22:30 Beijing time: U.S. EIA Crude Oil Inventories Change (thousand barrels) up to the week ending July 12. 21:00 Beijing time: 2024 FOMC voter, Richmond Fed President Barkin speaks. 21:35 Beijing time: Federal Reserve Board member Waller speaks on economic outlook, 2025 FOMC voter, Kansas Fed President Schmidt delivers opening remarks at an event hosted by the Kansas Fed. 02:00 Beijing time the next day: Federal Reserve publishes Beige Book on economic conditions. Earnings Forecast Thursday morning: United Airlines (UAL.US), Alcoa Corporation (AA.US) Thursday pre-market: Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), Nokia Oyj Sponsored ADR (NOK.US), Novartis AG Sponsored ADR Pharmaceuticals (NVS.US), Abbott Laboratories (ABT.US)