Zoom (ZM.US) Q2 Revenue Misses Estimates Amid Strong Dollar Headwinds, Cuts Full-Year Guidance

Intelligent Finance APP learned on Monday that the three major U.S. stock indexes extended the sharp decline from last Friday, all falling nearly 2%, with the Dow plummeting over 640 points. Concerns about the Fed's aggressive interest rate hikes have once again overshadowed Wall Street. Some analysts worry that the recent rebound in U.S. stocks was based on a misjudgment of the Fed's policy stance. The market is now focused on this week's Jackson Hole Symposium hosted by the Federal Reserve.

【US Stock Market】The Dow Jones Index closed down 642.80 points, or 1.91%, at 33,063.94; the S&P 500 Index closed down 87.63 points, or 2.07%, at 4,140.85; and the Nasdaq Composite Index closed down 323.64 points, or 2.55%, at 12,381.57. All 11 sectors of the S&P 500 Index ended lower on Monday, with the consumer discretionary sector falling more than 2.8%, performing the worst, and the energy sector dropping over 0.2%. Most sectors, including chips and WSB concepts, closed broadly lower. AMC Entertainment (AMC.US) fell approximately 42%, and 3B Home (BBBY.US) dropped about 16%. Leading technology stocks all declined: Meta (META.US) and Microsoft (MSFT.US) fell nearly 3%; Amazon (AMZN.US) dropped 3.6%, Apple (AAPL.US) fell over 2%; Netflix (NFLX.US) dropped more than 6%, Alphabet (GOOG.US), the parent company of Google, fell 2.5%, and Tesla (TSLA.US) initially fell 3.5% before closing down over 2%. Popular Chinese stocks outperformed the broader market. The China ETF KWEB rose 1.3%, CQQQ slightly declined, and the Nasdaq Golden Dragon China Index (HXC) increased by 1.2%.

【European Stocks】Germany's DAX 30 Index closed down 2.32%, the UK's FTSE 100 Index closed down 0.22%, France's CAC 40 Index closed down 1.80%, and the Euro Stoxx 50 Index closed down 1.93%.

[Asia-Pacific Stock Market]The Nikkei 225 index fell by 0.47%, the South Korean KOSPI index dropped by 1.21%, the Singapore Strait Times Index rose by 0.49%, the Indonesia Jakarta Composite Index declined by 0.90%, the Thailand SET Index decreased by 0.62%, and the India Bombay 30 Index fell by 1.46%.

【Foreign Exchange】The ICE U.S. Dollar Index (DXY), which tracks a basket of exchange rates for six major currencies against the dollar, rose as much as 0.9%, breaking above the 109 level at one point to reach its highest position in over five weeks since July 14. It also approached the 52-week high of 109.29 set during trading that day. The U.S. Dollar Index, measuring the dollar's value against six major currencies, increased by 0.82% and closed at 109.0460 in the forex market that day.

[Cryptocurrency]Strong US Dollar Pressures Cryptocurrency Prices: Bitcoin Drops 1.39% to $21,210 per Coin; Ethereum Falls 1.70% to $1,591.72 per Coin.

【Gold】U.S. Bond Yields and Dollar Rise Together, Pressuring Gold Prices. COMEX December gold futures fell 0.8% to settle at $1,748.40 per ounce, hitting the lowest closing level since July 28 for two consecutive days. For the week, prices dropped 2.90%, marking the sixth straight day of declines and reaching the lowest level in nearly four weeks since July 27.

[Crude Oil]WTI September crude oil futures fell 0.59% to close at $90.23 per barrel; Brent October crude oil futures dropped 0.25% to settle at $96.48 per barrel, with both oil prices ending a three-day rally.

[Base Metals]London base metal futures were mixed. LME copper fell 0.22% to $8,061/ton; LME zinc rose 1.08% to $3,525/ton; LME nickel increased by 0.72% to $22,419/ton; LME aluminum edged up 0.04% to $2,387/ton; LME tin dropped 1.24% to $24,488/ton; LME lead declined 1.40% to $2,013.50/ton.

[Macroeconomic News]

The "disconnect" between oil futures and fundamentals may force OPEC+ to take action, and OPEC+ may need to tighten production to stabilize market prices.Saudi Energy Minister States Crude Oil Futures Are Increasingly "Disconnected" from Fundamentals, Potentially Forcing OPEC+ to Act by Tightening Production; The Oil-Producing Alliance to Soon Begin Negotiations on a New Petroleum Output Agreement Post-2022, Narrowing Oil Price Declines. Previously, Fears Over Global Economic Prospects and the Possibility of More Iranian Oil Entering the Market Led to Significant Drops in International Oil Prices. On Sunday, the White House Reported Discussions Between the Leaders of the U.S., U.K., France, and Germany on Efforts to Revive the 2015 Iran Nuclear Deal; Iran Claims Its Oil Production Capacity Exceeded 4 Million Barrels Per Day by March 2023.

Natural Gas Prices Rise in Europe and the US, with American Futures Contracts Hitting a 14-Year High.U.S. Natural Gas Futures Jump to 14-Year High as European Prices Surge

Bets on the Fed maintaining a hawkish stance reach unprecedented highs.Institutions pointed out that before the Jackson Hole Annual Meeting, hedge funds' bets on the Fed's commitment to a hawkish stance reached an unprecedented high. The short positions in Secured Overnight Financing Rate (SOFR) futures hit a record of 695,000 contracts (with a 1 basis point fluctuation worth $17 million). If Fed Chair Jerome Powell rules out the possibility of turning dovetail at the Jackson Hole meeting, these bets will be profitable. In the Eurodollar futures market, hedge funds’ net short positions exceeded 2.6 million contracts, approaching the highest level this year. Meanwhile, traders have also established large-scale put option structures targeting the 10-year U.S. Treasury bonds, betting that the yield on 10-year Treasury bonds will rise to 3.70% within a month. The head of U.S. interest rate strategy at BMO Capital Markets stated that judging from the sharp decline in 3-year Treasury bonds, the short-selling of U.S. Treasuries reflects the market's expectation that the Fed does not intend to adjust the direction of monetary policy in the short term.

Barclays: Growth risks remain a drag on euro recovery, but are unlikely to alter the path of ECB policy normalization.Barclays currency strategists wrote in a report that disappointing economic growth in the eurozone remains a major obstacle to the euro's recovery, but it is not enough to steer the European Central Bank (ECB) away from its path of monetary policy normalization. The strategists believe that a technical recession will not become an obstacle to the ECB’s policy normalization, contrary to what ECB Governing Council member Isabel Schnabel said last week. The ECB will release the minutes of its July monetary policy meeting this Thursday, during which a 50 basis point interest rate hike was implemented, and the minutes should provide further insight into the interest rate outlook.

【Individual Stock News】

Zoom (ZM.US) Q2 Revenue Misses Expectations, Cites Strong Dollar Impact, Lowers Full-Year Guidance; Stock Falls Over 7% After Hours.Zoom Video Communications' Q2 adjusted EPS was $1.05, analyst expected $0.92. Q2 revenue was $11.0 billion, analyst expected $11.2 billion. The company's revenue was impacted by the appreciation of the US dollar and online business. Full-year adjusted EPS is expected to be $3.66-$3.69, compared to the previous estimate of $3.70-$3.77. Full-year revenue is expected to be $43.9-$44.0 billion, compared to the previous estimate of $45.3-$45.5 billion. Q3 adjusted EPS is expected to be $0.82-$0.83, analyst expected $0.91. Q3 revenue is expected to be $11.0 billion, analyst expected $11.6 billion. Zoom's US stock price fell 7.43% in after-hours trading.

Signify Health (SGFY.US), a home health services provider, surged 32% amid acquisition bids from companies including Amazon (AMZN.US) and UnitedHealth (UNH.US).Market sources say that the company plans to convene a board meeting to evaluate multiple acquisition offers. Bidders include tech giant Amazon, UnitedHealth, CVS Health (CVS.US), and home healthcare provider Option Care Health Inc. Reports claim that the company could announce the winning bid as early as this week. It was also noted that UnitedHealth’s highest offer exceeds $30 per share, slightly higher than Amazon’s bid. Earlier reports suggested that if an auction were held, Signify Health could be valued at over $8 billion. Credit Suisse analyst A.J. Rice stated, “Amazon is arguably the most financially robust potential acquirer in the healthcare sector.” The bank believes Amazon's bid could further drive up the acquisition price and intensify competition.

Pfizer (PFE.US) Submits Emergency Use Authorization Application for Omicron Vaccine to FDA.U.S. Eastern Time on Monday, Pfizer submitted an application to the U.S. Food and Drug Administration (FDA) requesting approval for its vaccine targeting Omicron BA.4 and BA.5. The U.S. government has signed a procurement agreement with Pfizer for 105 million new vaccines. FDA spokesperson Abby Capobianco stated that the FDA is working closely with vaccine manufacturers to ensure that the vaccines can be available in the fall after reviewing their safety and efficacy. Currently, there is very limited public data on Pfizer's BA.4 and BA.5 vaccine, and it is all based on studies conducted on mice.

[Major Ratings]

Citi: Upgraded Vipshop (VIPS.US) rating from "Neutral" to "Outperform" with a price target of $12.

RBC: Downgraded Coupa Software (COUP.US) from "Sector Perform" to "Underperform," reducing the target price from $65 to $55.

Evercore: Downgrades UPS (UPS.US) Rating from "Overweight" to "Hold".