Monday's market action featured a mix of corporate developments and macroeconomic crosscurrents. Broadcom shares rallied after the chipmaker extended its long-term partnership with Apple through 2031, while Strategy disclosed a significant Bitcoin sale under its new treasury framework. Meanwhile, oil prices held steady and gold retreated as the US dollar strengthened.
Broadcom Solidifies Apple Ties Through 2031
Broadcom Inc. (AVGO) saw its shares climb 4.6% on Monday after announcing a multi-year extension of its collaboration with Apple Inc. through 2031. The new agreement expands the companies' work on custom silicon products, reinforcing Broadcom's role as a key chip supplier for the iPhone maker.
According to a recent SEC filing, the updated pacts cover a range of custom ASIC silicon products destined for multiple generations of Apple devices. Apple is estimated to contribute roughly 20% of Broadcom's annual revenue, making the relationship strategically vital for the chipmaker. Broadcom has long supplied Apple with radio-frequency chips, Wi-Fi and Bluetooth connectivity chips, and other networking semiconductors. The companies had previously announced a multibillion-dollar agreement in 2023 to develop and manufacture 5G radio frequency components.
Apple continues to rely on Taiwan's TSMC to manufacture its M-series and A-series processors while exploring potential US manufacturing with Intel. For more on Apple's supply chain dynamics, see DRAM ETF Plunges 22.75% from Peak as Meta Cloud Plans and Apple Sourcing Shift Weigh.
Strategy Sells $216M in Bitcoin Under New Treasury Plan
Strategy Inc. (MSTR), formerly MicroStrategy, disclosed that it sold 3,588 Bitcoin for approximately $216 million last week as part of its newly introduced Digital Credit Capital Framework. The company sold 1,363 Bitcoin between June 29 and June 30 for $80.8 million, followed by another 2,225 Bitcoin between July 1 and July 5 for $135.2 million.
Following these transactions, Strategy's Bitcoin holdings declined to 843,775 coins acquired at an average purchase price of about $74,476 per Bitcoin. Proceeds from the sale were used to fund preferred stock distributions and replenish the company's US dollar reserve, which stood at approximately $2.6 billion as of July 5. The company also introduced a BTC Monetization Program allowing it to sell up to $1.3 billion worth of Bitcoin for reserve management, dividend payments, and share repurchases.
For more on Strategy's capital allocation strategy, see Strategy Stock Surges 7% as Analysts Endorse New Capital Allocation Plan.
Oil Steadies as OPEC+ Boosts Output
Oil prices traded little changed on Monday as markets weighed Saudi Arabia's aggressive pricing strategy, OPEC+'s latest production increase, and the continued recovery in exports through the Strait of Hormuz. Brent crude fell by 0.07% to $72.05 a barrel, while US West Texas Intermediate crude gained 0.06% to $68.65 a barrel.
Saudi Arabia reduced the official selling price of its flagship Arab Light crude for Asian buyers by $1.50 per barrel versus the Oman/Dubai benchmark for August, marking its largest monthly price cut since Reuters records began in 2003. Meanwhile, OPEC+ agreed to increase production targets by another 188,000 barrels per day beginning in August. Analysts noted that although production targets continue to rise, actual output has remained constrained in recent months because the conflict involving Iran disrupted tanker traffic through the Strait of Hormuz.
Gold Slips as Stronger Dollar Offsets Fed Expectations
Gold prices retreated from two-week highs on Monday as a stronger US dollar weighed on bullion. Spot gold fell 0.31% to $4,162.46 per ounce after reaching its highest level since June 22, while US gold futures for August delivery rose 1.15% to $4,172.70 per ounce.
Recent US labor market data showing slower job growth and downward revisions to prior payroll figures have reduced expectations of additional Federal Reserve interest rate increases, helping limit gold's decline. JP Morgan said in a note that demand for gold from key sectors is likely to be weaker than previously expected, forecasting gold prices of $4,300 per ounce in the third quarter and $4,500 per ounce in the fourth quarter.
This article is for informational purposes only and does not constitute financial advice.
