US stock outlook | Futures of the three major stock indexes rose sharply, and the price of gold stood at 4,300 US dollars, and the US non-agricultural industry hit hard in July

Pre-market market trends

1. On August 7 (Friday), the futures of the three major US stock indexes rose sharply before the US stock market. As of press release, Dow futures were up 0.15%, S&P 500 futures were up 0.27%, and NASDAQ futures were up 0.59%.

2. As of press release, the German DAX index had risen 0.77%, the UK FTSE 100 had risen 0.71%, France's CAC40 had risen 0.44%, and the European Stoxx 50 had risen 0.67%.

3. As of press release, WTI crude oil fell 0.78% to $76.69 per barrel. Brent crude fell 0.82% to $81.81 per barrel.

Market news

The US July Non-Farm Report is a big hit! The market currently expects that non-farm payrolls in the US will only increase by 83,000 in July, up from 57,000 in June; the unemployment rate will remain unchanged at 4.2%. Furthermore, the market expects the average hourly wage in the US to rise 0.3% month-on-month and 3.5% year-on-year in July. This wage growth rate is theoretically in line with the Federal Reserve's 2% inflation target. The US job market is still showing a pattern of “low recruitment and low judgment” — companies are not recruiting very many people, and there are no large-scale layoffs. For US stocks that have recently experienced severe shocks (especially technology stocks), tonight's more comfortable result may be a “lukewarm” number — employment has not stalled, wages have not reignited inflationary pressure; the market can continue to trade softly, and there is no need to raise interest rate expectations sharply again. However, if non-farm payrolls clearly exceed expectations, the probability of interest rate hikes in September may rise rapidly, and overvalued technology stocks will also have to face pressure on interest rates; if the data suddenly stalls, the trading logic may shift from “interest rate hikes and cooling down” to “economic slowdown.”

Federal Reserve Mussalem: Be wary of high inflation solidification; monetary policy must maintain substantial restraint. St. Louis Federal Reserve Chairman Mussalem said that with the inflation rate above the Federal Reserve's 2% target, policymakers cannot afford to endure higher inflation while waiting for the possibility of strong productivity growth. Mussalem does not have the right to vote on policy decisions this year. He said last week that he expressed a tendency to raise interest rates by 25 basis points at the Federal Reserve's last policy meeting. “The key is for monetary policy to effectively curb real inflation, rather than enduring today's slightly higher inflation in pursuit of tomorrow's productivity growth,” he said. “The central bank's most important contribution to long-term economic growth is to provide a background for price stability, and enterprises can plan investment and innovation to promote economic growth in this context.”

“Record” US stock earnings season: S&P 500 component EPS grew 45%, but half of it came from investment income and 1/3 from AI infrastructure. Although this US stock earnings season has been dubbed “record breaking,” the structural issues behind the numbers are causing alarm. According to the latest internal report from Goldman Sachs's sales and trading department, the EPS growth rate of S&P 500 index constituent stocks in the second quarter was as high as 45% year-on-year — but if the fair value change benefits of equity investments held by large technology companies were excluded, this figure would fall almost to 26%. In other words, about half of the “record” profit growth came from tech giants' book revaluation of their venture capital portfolios rather than a substantial expansion of the entity's operating profits. At the same time, AI infrastructure-related stocks contributed about one-third of the S&P 500's overall EPS growth, further highlighting the high concentration of profit growth. For investors holding indices, this means that the profit base on which current valuations are based is far weaker than it seems.

The Bank of America derivatives department warns that sharp market fluctuations have become the norm, and the AI bubble risk index is approaching the extreme value of the Internet era. The Bank of America derivatives team's latest report indicates that as the AI bubble continues to accumulate, market volatility and uncertainty are rising simultaneously at the macro and micro levels, and many key indicators have reached or are close to historical extremes when the Internet bubble burst in 2000. What is more noteworthy is the trend of diversification of stock earnings. Under the current market structure with low correlation and frequent sector rotation, the differentiation in individual stock performance continues to expand even within the technology sector. Bank of America data shows that the trend of S&P 500 constituent stocks is approaching historical highs during the Internet bubble period. The Bank of America has previously warned that as the AI bubble builds up, the degree of divergence of US stock components is likely to break the record during the Internet bubble period. After all, today's tech giants have a larger market capitalization and more drastic stock price fluctuations, and their power over the market far exceeds that of back then.

Spot gold stands at 4,300 dollars! UBS: Gold is expected to return to $5,000 in the first half of next year. As of press release, spot gold rose nearly 2% to 4,318 US dollars/ounce. Gold prices have risen rapidly in this round. The most important thing is that geopolitical risks have been reduced recently. Second, expectations of the Fed's interest rate hike have weakened, driving the US dollar index to weaken and boosting gold prices. As the price of gold rebounds strongly after several months of sluggishness, UBS is looking further afield — the price of gold is expected to return to $5,000 in the first half of 2027. UBS believes that in the medium to long term, the structural drivers that support the price of gold remain stable. The bank said it should distinguish short-term transaction risk from long-term investment logic, and view the stage where the price of gold falls back to 4,000 US dollars or less as an opportunity to establish a strategic position.

The Strait of Hormuz transit agreement may be announced within a few days. On August 6, local time, a source revealed that Iran and Oman have reached an understanding on the outline of the agreement to reopen the Strait of Hormuz. According to relevant arrangements, the strait will be open for 60 days. At that time, ships will enter the Persian Gulf via a route close to the Iranian side of the strait and leave the Persian Gulf via a route close to the Oman side. Passing ships will not be charged transit fees or service fees, and all parties in the region can participate in technical work such as demining. The source also said that the agreement still needs to be approved by Iran's Supreme National Security Council and may be announced within a few days. After the agreement is approved, the US and Iran will resume implementation of the previously reached memorandum of understanding.

Individual stock news

US Optical Communications stocks generally rose before the market. Before the US stock market on Friday, Applied Optoelectronics (AAOI.US) was up more than 13%, Coherent (COHR.US) was up more than 6%, Lumentum (LITE.US) and Corning (GLW.US) were up more than 4%, and MRVL.US (MRVL.US), Astera Labs (ALAB.US), and Credo Technology (CRDO.US) were up nearly 3% as of press release. According to news, Applied Optoelectronics' second-quarter revenue surged 86% year-on-year to US$192 million. Data center business revenue broke the 100 million US mark for the first time, and 800G product revenue doubled month-on-month. More importantly, 1.6T products are about to complete customer certification and begin shipping. According to the mid-2027 path drawn by management, data center transceiver revenue may reach $471 million per month.

Holding 100 billion dollars in cash but skimping on rewards? Analysts publicly pressured SK Hynix (SKHY.US) to finalize shareholder return plans in Q3. South Korean chip giant SK Hynix announced on Friday that it will pay out a dividend of 375 won per share. The company also announced that it is actively evaluating measures to further enhance shareholder value; details will be finalized and announced in the third quarter. The brokerage estimates that SK Hynix's free cash flow is expected to reach about 100 trillion won this year. Although the company plans to use 50% of free cash flow for shareholder returns, this ratio is lower than the 100% proposed by peer Micron Technology. The sharp gap has caused many investors to feel dissatisfied. Analysts believe that this contrast between high performance growth and dividend restraint makes the market speculate that management is not optimistic about the long-term sustainability of this round of AI storage dividends.

AI is driving demand for network services to accelerate, and cybersecurity company Cloudflare (NET.US) raised its full-year profit forecast. Cybersecurity company Cloudflare's profit forecast for this year exceeded Wall Street estimates, indicating that demand for network services continues to accelerate in the context of the rapid spread of AI. According to financial reports, the company's second-quarter revenue reached US$696.1 million, up 35.9% year on year, exceeding expectations of US$29.75 million; adjusted earnings per share were US$0.29, exceeding expectations of US$0.02. Cloudflare said it currently expects adjusted profit per share for the full year to be 1.25 to 1.26 US dollars, higher than the previous forecast of 1.19 to 1.20 US dollars. The average expectation from analysts was $1.20. As of press release, Cloudflare's US stock rose more than 16% before the market on Friday.

Roku (Roku.US)'s performance exploded! Q2 net profit soared more than 15 times, and both advertising and subscriptions increased by more than 25%. Financial reports show that Roku's second-quarter revenue increased 22% year-on-year to US$1.35 billion, higher than market expectations of US$1.3 billion; net profit reached a record US$164.2 million, an increase of more than 15 times over only US$10.5 million in the same period last year; and diluted earnings of US$1.08 per share were double market expectations. This is Roku's fifth consecutive quarter of net profit after years of losses. Roku's free cash flow over the past 12 months reached $704 million, also a record high. The company's second-quarter advertising revenue increased 25% year over year to US$673 million, and subscription revenue increased 26% year over year to US$548 million. This performance report is the first financial report released by Fox after announcing the acquisition of Roku for $22 billion in mid-June. The deal is expected to close in the first half of 2027.

With the global travel boom and World Cup dual engine, Airbnb (ABNB.US) handed over the “strongest in recent years” report card, and the AI strategy was upgraded to the next ace. Thanks to the continued rise in the global travel boom, homestay and experience giant Airbnb handed over an impressive report card. The company achieved revenue of US$3.61 billion in the second quarter, up from US$3.1 billion in the same period last year, and also better than market expectations of US$3.57 billion; earnings per share reached US$1.37, a significant increase from US$1.03 in the same period last year. Based on strong global travel demand, Airbnb raised its revenue growth forecast for the full year 2026 — currently the annual revenue growth rate is expected to reach “at least a medium double digit percentage”. Compared with the “low to medium double digit” guidance given in May, it is significantly higher than the 14% increase previously anticipated by analysts. Additionally, the company said artificial intelligence (AI) will be the focus of the next phase of experience upgrades. As of press time, Airbnb's US stock rose more than 7% in the premarket on Friday.

Atlassian (TEAM.US) revenue soared 28%, with record orders and millions of monthly activity detonating stock prices. Atlassian used a bright financial report to dispel the haze of “AI replacement” that loomed over this collaborative software developer. For the fourth quarter of fiscal year 2026 ending June 30, the company's adjusted earnings per share reached 1.87 US dollars, which was significantly better than the market forecast of 1.50 US dollars; total revenue soared 28% year over year to 1.77 billion US dollars, significantly exceeding market expectations of 1.66 billion US dollars. The core driving force behind this impressive earnings report is cloud transformation. Cloud business revenue reached 1.21 billion US dollars during the quarter, and the year-on-year growth rate accelerated to 31%, making it the strongest driver of overall revenue growth. By the end of the quarter, annual recurring revenue (ARR) for subscriptions increased 23% to $6.61 billion; as a “reservoir” to measure future revenue, remaining performance obligations (RPO) surged 44% year over year to $4.82 billion. As of press release, Atlassian's US stocks surged nearly 27% in the premarket on Friday.

Key economic data and event forecasts

Beijing time 20:30 US non-farm payrolls report for July

22:00 Beijing time 2027 FOMC voting committee and Richmond Federal Reserve Chairman Barkin delivered a speech

At 23:00 Beijing time, the US New York Federal Reserve's 1-year inflation forecast for July