Market Commentary: Tuesday 16th July

Hong Kong’s stock markets declined again this morning after Donald Trump announced JD Vance, who is hawkish on China, as his running mate yesterday. Vance, a junior senator from Ohio, who is exactly half Trump's age, has called for the US to stop sending aid to Ukraine in order to “focus” on China, hence triggering trade and geopolitical concerns. New tariffs of 60% on all Chinese exports to the US would more than halve China’s annual growth rate, outlining the risks for Beijing if Trump returns to the White House. The Hang Seng index fell 1.4% in early trading, while mainland China’s benchmark CSI 300 dropped 0.1%. Meanwhile, Japanese equities rose with exporters benefitting from a weak Yen.

In Thailand, Energy Absolute PCL's share price dropped 30% after the company's founder and CEO quit over a fraud probe and their credit rating was hacked to junk. While Trump Media & Technology Group soared 31%, with Trump's increasing chances of victory boosting oil producers, gun makers, and private prisons. The S&P 500 closed 0.3% higher, while the Nasdaq Composite added 0.4%. Both indices added to gains from Friday and have finishing higher in nine of the past 10 trading days. Meanwhile, the small cap-focused Russell 2000 gained 1.8%, ending it’s biggest weekly advance of 2024.

Bitcoin rose 1.2% to $64,567.59, and in commodities markets oil steadied after a two-day decline, while Gold rose for a second consecutive day.

Data wise, today we have the Canadian inflation at 1:30pm, along with US retail sales. The Fed's Andriana Kugler speaks at 7:45pm, and we are also expecting Morgan Stanley and Bank of America earnings.

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