Real-time News

July 27th - According to TrendForce's latest research on the optical communications industry, with NVIDIA shipping its new generation Spectrum-X CPO switches to some partners and Broadcom continuing to ship its 51.2T Bailly CPO switches in small quantities, co-packaged optics has officially entered the mass production stage. However, the supply capacity of core components such as optical engines, silicon photonics chips, and advanced packaging will be a key factor affecting the expansion speed of CPO switch production.

Jefferies: Raises its price target for Raytheon Technologies (RTX.N) from $220 to $250.

Ukrainian President Zelensky: I spoke with the new British Prime Minister by phone and hope that we can have a productive bilateral meeting to discuss various issues.

Ukrainian President Zelensky: Ukraine still lacks sufficient missiles. We need to establish an air defense system as soon as possible. Due to the situation in the Middle East, we are currently facing a missile shortage.

Ukrainian President Zelensky: Putin has no intention of stopping this war. Our intelligence indicates that he is preparing to mobilize, and he wants to expand the mobilization. His goal is to mobilize 300,000 to 500,000 people. If our partners do not impose comprehensive sanctions on Russia, he will take action, likely in early October.

Jefferies: Lowered its target price for Southwest Airlines (LUV.N) from $50 to $46.

Jefferies raised its price target for Lockheed Martin (LMT.N) from $575 to $595.

On July 27th, Danske Bank senior analyst Joel Rossier stated in a report that with Federal Reserve Chairman Warsh not expected to release new economic projections or forward guidance at Wednesday's meeting, market focus will shift to the voting divisions within the policy committee. He said, "We believe the most likely outcome is that two to four members support a rate hike, but this is insufficient to trigger one." Danske Bank expects the Fed to raise rates by 25 basis points in December and March of next year, but the risks are skewed towards an earlier rate hike. Although the money market has already priced in about 8 basis points of rate hike expectations, implying a roughly 31.5% probability of tightening, the market still anticipates the Fed will keep rates unchanged at this week's meeting.

Jefferies upgraded Ford Motor (FN) from Hold to Buy, raising its price target to $17.50 from $14.50.

On July 27th, Goldman Sachs analysts stated in a report that the Federal Reserve is expected to keep the federal funds rate unchanged at its meeting this week. The impact of this decision will largely depend on how Fed Chairman Warsh articulates the decision and the future policy path. Analysts indicated that if the Fed decides to hold rates steady but fails to provide sufficient guidance on the economic outlook or policy response mechanisms, the currently relatively stable long-term US Treasury yield curve and the controlled inflation risk premium could face volatility risks. Currently, money market pricing indicates a 31.5% probability of a Fed rate hike this week, although the mainstream market expectation remains that rates will remain unchanged.

Jefferies upgraded General Motors (GM.N) from Hold to Buy and raised its price target from $90 to $99.

Jefferies: Lowered its price target for American Airlines (AAL.O) to $15 from $18.

On July 27, retired U.S. Air Force Colonel Cedric Leighton stated that Iran may have an advantage over the United States in sustaining a protracted conflict because Iran still maintains a large weapons stockpile, while the U.S. is depleting its advanced precision-guided munitions, replenishment of which could take years. Leighton stated, "Iran still possesses a large stockpile of missiles, drones, and rockets." He estimated that despite months of U.S. strikes, Tehran still retains approximately two-thirds of its original weapons stockpile. Leighton added that while the U.S. strikes successfully destroyed command and control centers, weapons systems, and military infrastructure, they did not diminish Iran's ability to continue its attacks. He cited an estimate that over 1,400 Patriot interceptor missiles may have been used to date in the conflict with Iran; if this figure is accurate, the U.S. defenses in other regions could become vulnerable while it replenishes its stockpiles.

On July 27th, Elmar Voelker, senior fixed income analyst at LBBW, stated in a report that investors may focus on the number of potential dissenting votes in the Federal Reserve's interest rate decision on Wednesday. He said, "We believe there could be up to three dissenting votes, as a similar number of votes were cast against the Fed's then 'accommodative' forward guidance back in April." Voelker added that if the Fed unanimously decides to adopt a wait-and-see monetary policy stance, it would be a positive surprise for the bond market, as it would shake current market participants' consensus that a September rate hike is almost a certainty.

On July 27th, BlueBay Chief Investment Officer Mark Dowding stated in a report that investors have every reason to believe that Federal Reserve Chairman Warsh will tend to make hawkish statements and do everything possible to solidify his reputation as an inflation fighter, although he is unlikely to take any concrete action at present. He stated, "This could lead to a further flattening of the US yield curve in the short term." However, Dowding also pointed out that given the continued deterioration of the US fiscal situation and Trump's escalating spending on Middle East conflicts, these factors could eventually cause the yield curve to steepen again at some point in the future.

Royal Bank of Canada raised its price target for Verizon (VZ.N) from $46 to $47.

July 27 – According to The Hill, U.S. Senator Bill Cassidy said on Sunday that it “seems unlikely” for Trump to end the war with Iran quickly, and suggested that Trump seek a path to peace from Congress. Cassidy stated, “I do think we need a more comprehensive national discussion about how to move forward. If the president can end this conflict quickly—which seems unlikely, but they still seem to be assuring us that it can be done. Well, that’s fine too.” Cassidy has consistently criticized Trump’s handling of the war, particularly its impact on the cost of living. In May, after failing to retain his Senate seat, Cassidy became one of four Republican senators supporting a war powers resolution that calls for Trump to withdraw U.S. troops deployed in Iran.

July 27th - Economists predict that the Bank of England will take a hawkish stance at its meeting this week, but will keep interest rates unchanged, amid renewed Middle East conflict and soaring energy prices. Since the Monetary Policy Committee's last meeting in June, the breakdown of the US-Iran ceasefire agreement has pushed global oil prices back to around $100 per barrel, and European natural gas prices have surged to their highest level since the beginning of the conflict. Oil prices could rise further if shipping routes in the Gulf region continue to be disrupted. The UK economy performed better than the Monetary Policy Committee's expectations at the beginning of the conflict, with GDP growing by 0.7% in the three months to May. Currently, there are few signs that the energy shock will trigger more persistent price pressures. The CPI has been below expectations for three consecutive months, falling to 2.6% in June. Wage growth, a major source of inflationary pressure, has slowed, and food price increases have also declined. Economists say this will allow the Monetary Policy Committee to keep interest rates at 3.75% at Thursday's meeting, while signaling that the committee is prepared to tighten policy if energy prices rise sharply further, or if a one-off price shock begins to evolve into a more persistent problem.