VIX opens with 6.69% gap lower as volatility expectations ease

source:

Related News

Jul 29 2026, 15:37

HSBC maintains maximum overweight on stocks with 5 bullish reasons

Global equities sit less than 1% from their June record high despite Brent crude surging 40% year to date, South Korea's Kospi plunging 30% in July and the Philadelphia Semiconductor Index falling 16% over the past month. "Nothing seems to shake this market," Max Kettner, head of multi-asset strategy at HSBC, wrote in a note this week. The strategist maintained his "maximum overweight" rating on global equities, arguing the market has already absorbed most negative shocks while positive catalysts remain ahead. The call rests on five pillars. First, expectations for global economic growth have been marked down so sharply that positive surprises are now more likely than disappointments. Second, the current earnings season is delivering beats at a similar pace to the prior quarter, with corporate profit resilience continuing to exceed analyst forecasts. Third, US equity valuations — particularly for large-cap technology stocks — are lower today than they were when the US-Iran conflict first escalated, providing a wider safety margin for further gains. Fourth, the sharp rise in US Treasury yields creates room for a pullback. The two-year note yields 4.316%, nearly a full percentage point above its level when Middle East tensions erupted. HSBC expects lower bond yields to support equities in coming months, though the bank maintains a tactical underweight on Treasuries for now. Fifth, the recent rotation out of memory-chip stocks and hyperscale cloud bonds has kept capital within equity markets rather than exiting entirely, a reallocation process HSBC expects to continue for several weeks. Kettner has been one of Wall Street's most consistent bulls since 2023, when he maintained an overweight call on stocks even as most strategists turned cautious amid high inflation and aggressive rate hikes. The S&P 500 went on to rally 20% that year. The maximum overweight stance implies HSBC's model portfolios hold the highest permissible allocation to equities. For investors, the call signals conviction that the current environment — resilient earnings, moderating rate fears and sector rotation — supports further upside. The next test for the thesis will come with the US consumer price index release on Oct. 10 and the start of third-quarter earnings season in mid-October. This article is for informational purposes only and does not constitute investment advice.

Jul 29 2026, 15:37

Anglo American sells De Beers for $1 billion, 90% below peak

**The diamond giant once valued at more than $18 billion is being sold for roughly 5% of that peak price, marking the end of an era for the industry's most iconic name.** Anglo American agreed to sell its 85% De Beers stake for about $1 billion to a consortium led by former CEO Gareth Penny, people familiar with the matter said. The Global Diamond Consortium, or GDC, will pay about $750 million at closing and $250 million on a deferred basis, with additional performance-based payments, the people said. The consortium also plans to inject about $500 million into De Beers to support operations. The deal values the 85% stake at roughly one-tenth of the $13 billion Anglo American paid to acquire full control from the Oppenheimer family in 2011. De Beers was valued at more than $18 billion when Anglo American and the Oppenheimers took it private in 2001. Anglo American has written down De Beers three times in three years, cutting its carrying value to $2.3 billion in February. The sale caps a dramatic decline for the world's most famous diamond company, which once controlled more than 80% of global rough diamond supply. Rough diamond prices have fallen 50% over the past two years as Chinese luxury demand collapsed and lab-grown diamonds captured a growing share of the market. **From $18 Billion to $1 Billion** The proposed price represents a more than 90% discount to De Beers' peak valuation and a roughly 80% discount to the 2011 acquisition price. Anglo American wrote down the business by $1.6 billion in 2024 alone. The company cut its 2025 diamond production forecast to 20 million carats from 33 million, a 39% reduction. Fourth-quarter output fell 26% to 5.8 million carats. **Botswana Negotiations Remain** The transaction does not include Botswana's 15% stake in De Beers. The southern African nation also owns 50% of Debswana, the joint venture that produces the majority of De Beers' diamonds. About 70% of De Beers' rough diamond output comes from Botswana. President Duma Boko has said the country wants majority control, though people familiar said Botswana may accept a larger minority stake instead. Anglo American launched the divestiture after rejecting a roughly $50 billion takeover approach from BHP Group in 2024. The company is also selling its steelmaking coal mines to Peabody Energy Corp. for $3.77 billion and plans to exit platinum and nickel as part of a sweeping restructuring focused on copper, iron ore and agricultural fertilizers. This article is for informational purposes only and does not constitute investment advice.

Jul 29 2026, 15:31

Goldman Sachs slides 4.2% as AI, Fed fears hit bank stocks

**Bank stocks suffered their worst session in two months as AI-lending exposure and Federal Reserve uncertainty triggered a selloff in financial shares.** Major US bank stocks tumbled Wednesday, with Goldman Sachs Group Inc. sliding 4.2%, as AI-sector weakness and Fed rate-decision uncertainty triggered a selloff in financial shares. "Banks are getting caught in the crosscurrents of AI-exposure concerns and positioning ahead of the Fed," said Ross Mayfield, an investment strategist at Baird. Morgan Stanley fell 3.3%, Citigroup dropped 3.2% and JPMorgan Chase declined 2.4%. The selloff in financials stood in contrast to the broader market, where the Dow Jones Industrial Average rallied 537 points, or 1%, to 52,747.32, extending a three-day winning streak. The S&P 500 added 0.2% to 7,428.78, while the Nasdaq Composite edged down 0.2% as the VanEck Semiconductor ETF slid more than 3%, its fourth straight decline. The divergence highlights a rotation out of technology and into so-called old-economy sectors that has gathered pace over the past six to eight weeks. The Financial Select Sector SPDR Fund surged to a record high even as individual bank stocks fell, suggesting the selloff was concentrated in money-center banks with large AI-lending exposure. The Fed's rate decision, due later Wednesday, will test whether the rotation can sustain, with futures pricing in a quarter-point hike by September. The selloff in bank stocks coincided with a deepening rout in semiconductor shares after SK Hynix Inc. reported weak earnings, stoking concerns that the massive infrastructure buildout tied to artificial intelligence may not deliver the returns investors expect. Nvidia Corp.'s $750 billion in infrastructure deals has raised debt-servicing concerns, with the cost of protecting its bonds against default surging to a record on Monday, according to data from Bloomberg. The rotation out of growth and into value has been a dominant theme since early June. The Technology Select Sector SPDR Fund hit its lowest level since May 7, while the Health Care Select Sector SPDR ETF also surged to a record high. West Texas Intermediate crude fell about 4% to settle at $79.26 a barrel, lending support to consumer-facing sectors as energy costs declined. JPMorgan Chase & Co.'s market intelligence team said its tactical positioning monitor is "now flashing a buy-signal" for the S&P 500, citing lower bond yields, a weaker US dollar and strong corporate earnings. The team flagged semiconductor crowding as a risk, with AI spending "no longer an automatic win" for chipmakers and infrastructure providers. The Federal Reserve is widely expected to hold rates steady at the conclusion of its two-day meeting Wednesday. Investors will focus on the statement and Chair Jerome Powell's press conference for clues on the path forward, with the CME FedWatch Tool showing a quarter-point hike fully priced in for September. "This momentum unwind has been a story that's been playing out for six to eight weeks now, and it has a lot more to do with the technicals of the market than any fundamental changes," Mayfield said. However, the rotation into cyclical and rate-sensitive sectors such as consumer discretionary will depend on oil prices and interest rates staying around their current levels, he added. This article is for informational purposes only and does not constitute investment advice.