Megacaps report, Harris in frame, China wobbles
A look at the day ahead in U.S. and global markets from Mike Dolan
Monday's Wall Street bounce saw some relief precede the first two earnings reports from the "Magnificent 7" megacap stocks, while U.S. Vice President Kamala Harris looked set to replace Joe Biden as Democrat candidate for November's White House race.
A volatile couple of weeks for politics and stock markets sees attention switch back to quarterly earnings on Tuesday, with Google-parent Alphabet GOOGL.O and Tesla TSLA.O updating after the bell today.
Last week's sudden rotation out of Big Tech into small caps raised questions about just how high the earnings bar now is for pricey market behemoths, with stocks such as Netflix stumbling despite beating forecasts and chipmakers sideswiped by geopolitics.
A standback look at the earnings season so far offers more solace.
Some 81% of those that have reported to date have beaten estimates, with overall annual profit growth for S&P500 firms still tracking a punchy 11% - slightly ahead of pre-season assumptions. Slower annual revenue growth at 4.5% is also slightly ahead.
And while this pace is expected to dip in Q3, standing forecasts are for a re-acceleration into 2025.
With the S&P500 rebounding more than 1% on Monday in its best day in six weeks, the Information Technology index .SPLRCT climbed 2% - topping sectoral gainers and snapping a four-day losing streak.
The VIX volatility gauge .VIX slipped back from three-month highs.
In a twist ahead of today's updates, Israeli cybersecurity startup Wiz has ended talks with Alphabet GOOGL.O on a reported $23 billion deal, which would have been the U.S. tech giant's largest-ever acquisition, according to a Wiz memo seen by Reuters.
But the election race remains the top talking point.
Less than 36 hours after Biden stepped aside and endorsed VP Harris, she appeared to have secured the Democratic nomination on Monday night by winning the pledged support of a majority of the party's delegates who will determine the outcome at next month's convention.
While another round of speculation about Harris' pick of running mate now ensues, markets are already tentatively re-calibrating election bets.
Although former President Donald Trump is still seen as clear favourite to return to the White House, online betting site PredictIt shows the probability of his win has slipped to 60%.
The solidifying of a clear two horse race after weeks of uncertainty about the candidates has seen Harris' ascribed probability jump 17 points from last week to some 44% on Tuesday as her campaign now begins in earnest.
The somewhat cagey election positioning to date has run into sand as a result, with many of the so-called Trump trades being pared back slightly.
With another heavy week of Treasury debt auctions kicking off with a $69 billion two-year note sale on Tuesday, Treasury yields sensitive to the fiscal implications of the election remained under wraps. The 2-to-30 year yield curve US2US30=RR, which had briefly turned positive last week, remains inverted.
Bitcoin BTC= also slipped back.
The dollar .DXY was mixed too, falling back against Japan's yen JPY= on Tuesday as pressure built on the Bank of Japan to resume monetary tightening there.
Senior Japanese ruling party official Toshimitsu Motegi said the BOJ should more clearly indicate its resolve to normalise monetary policy, including through steady interest rate hikes. The BOJ next sets rates on July 31.
Increasingly correlated in Asia, yen strength came in tandem with a small bounce in China's yuan CNH= too, despite Monday's surprise interest rate cut from the People's Bank of China.
Trump's draconian tariff pledges may play a part there too.
But Chinese stocks recorded their biggest single-day drop in six months, demonstrating the fragility of investor sentiment despite ongoing stimulus efforts.
China's blue-chip CSI300 index .CSI300 closed down 2.1%, its largest one-day decline since mid-January and ending a seven-session winning run.
European stocks were mixed on Tuesday, with the euro EUR= retreating after European Central Bank Vice President Luis de Guindos said new data and macroeconomic projections will help the ECB better reassess its monetary policy stance in September - when markets now see its next rate cut.
Back on Wall Street, stock futures were off slightly ahead of the big earnings reports and with a thin economic diary.
Key developments that should provide more direction to U.S. markets later on Tuesday:
* U.S. June existing home sales, Richmond Federal Reserve's July business surveys; Euro zone July consumer confidence
* US corporate earnings: Alphabet, Tesla, Comcast, Texas Instruments, Lockheed Martin, UPS, GE, GM, Invesco, Visa, Capital One, Moody's, MSCI, Coca Cola, Kimberly-Clark, Chubb, HCA Healthcare, Freeport McMoRan, AO Smith, Pentair, Philip Morris, Avery Dennison, Danaher, PulteGroup, Quest, Seagate Technology, Sherwin-Williams Enphase Energy, CoStar, Genuine Parts, Packaging Corp of America
* G20 Finance Ministers and Central Bank Governors meet in Rio de Janeiro ahead of the G20 Brazil Summit
* European Central Bank Chief Economist Philip Lane speaks
* US Treasury sells $69 billion 2-year notes
S&P500 streak without 2% recoil https://tmsnrt.rs/3ybuh9g
Tesla's margin set to slip due to cheaper financing options https://reut.rs/4bSmhaP
Big Technology stocks post gains powered by AI boom https://reut.rs/3Yc6pNe
Betting markets trimmed Trump's odds as Biden exits https://reut.rs/3LvDVXo
By Mike Dolan; Editing by Sharon Singleton mike.dolan@thomsonreuters.com
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تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
