- Asian Shares Fall as Slew of Rate Decisions Ahead: Markets Wrap
(Bloomberg) — Asian stocks opened lower amid speculation investors are trimming some of their holdings before a rush of events in coming days including major central bank decisions, key economic data and earnings from US mega cap companies. Equities slipped in Japan and Australia in early trading, while futures signaled a decline in Hong Kong. - S&P 500, Nasdaq eke out small gain Monday as investors gear up for big tech earnings this week
The S&P 500 ticked higher Monday as Wall Street geared up for a busy week of corporate earnings and looked ahead to a key policy announcement from the U.S. central bank. The broad market index gained 0.08%, closing at 5,463.54, and the Nasdaq Composite advanced 0.07% to end at 17,370.20. The Dow Jones Industrial Average lost 49.41 points, or 0.12%, and closed at 40,539.93. - BHP, Lundin to Buy Canadian Copper Miner Filo for $3 Billion
(Bloomberg) — BHP Group Ltd. has set up a joint venture with Canada’s Lundin Mining Corp. to buy copper miner Filo Corp., gaining access to projects in Chile and Argentina. The world’s biggest miner will take a 50% stake in Filo, which owns the Filo del Sol mine in Chile, BHP said in a filing Tuesday. - BOJ’s Ueda to Make Big Calls on Rates’ Fate, QT Pace: Day Guide
(Bloomberg) — Bank of Japan Governor Kazuo Ueda will be under intense scrutiny Wednesday when he unveils his plans for quantitative tightening and delivers a decision on the policy interest rate, in actions that may rattle global financial markets. Some 14 of 48 economists predict the BOJ’s board will raise its rate from the current range of 0 to 0.1%. - ‘Very Crowded’ Aussie Hedge Fund Trade Faces Key Market Test
(Bloomberg) — Yet another hot hedge fund trade in Asia Pacific faces a crucial test after short-yen wagers backfired in a spectacular way last week. Traders have been snapping up options betting Australia’s dollar will outperform its New Zealand rival since late June, amid speculation the former will hike interest rates to tame price pressures. - Asia’s Hedge Funds Keep Faith in Tech Stocks Despite AI Selloff
(Bloomberg) — Some of Asia’s biggest hedge funds are maintaining their faith in technology companies, despite the recent selloff in artificial intelligence stocks that’s blunted an otherwise stellar start to the year. Dymon Asia Capital Singapore Pte’s $2.5 billion Asia Multi-strategy Investment Fund and Feng He Fund Management Pte’s $3.6 billion fund both posted double. - US IPO Market to Slow After Lineage, With Quiet Summer Ahead
(Bloomberg) — The pricing of Lineage Inc.’s $4.4 billion first-time share sale helped make last week into the busiest for US initial public offerings in two and a half years. That excitement will be short-lived, according to bankers, who predict the rest of the summer will be more subdued.
8.Gold lacks momentum as Fed meeting looms
Gold struggled for momentum on Tuesday as investors looked for more cues on when the U.S. central bank will cut interest rates from this week’s policy meeting and data releases. Spot gold was down 0.1% at $2,380.31 per ounce, as of 0156 GMT. U.S. gold futures were little changed at $2,377.30. The Federal Reserve is expected to hold rates steady at the end of its two-day meeting starting later in the day but open the door to policy easing as early as September by acknowledging inflation has edged nearer to its 2% target. - High-Flying QXO Erases $36 Billion in Paper Value in Minutes
(Bloomberg) — QXO Inc., a company that had boasted an implied valuation of more than $90 billion at one-point last week, burned some investors badly late Monday when its thinly traded shares spiraled sharply downwards. Shares of the investment vehicle built by Brad Jacobs sank 81% to $11.25 each in after-market trading. - Norinchukin to Give First Peek Into $65 Billion Bond Selloff
(Bloomberg) — Norinchukin Bank will give a first glimpse into how it is unwinding $65 billion worth of unprofitable sovereign debt holdings when it announces its quarterly results on Thursday. The unlisted Japanese agricultural bank will disclose its fiscal first quarter earnings, after it shocked the market with massive projected losses from bad bets on interest rates. - US Cuts Borrowing Estimate, Sees Smaller Year-End Cash Pile
(Bloomberg) — The US Treasury reduced its estimate for federal borrowing for the current quarter and projected the government’s cash buffer to decline toward year-end, just ahead of a possible fresh fight over the debt limit. The Treasury Department said in a statement Monday that it now estimates $740 billion in net borrowing for July through September. - Reeves Hints Tax Rises Needed to Fill £22 Billion Black Hole
(Bloomberg) — Rachel Reeves announced a slew of measures to shore up the UK’s public finances as she accused the previous Conservative government of running up a £22 billion ($28.3 billion) black hole and signaled she may have to raise taxes at the budget in the autumn to help balance the books. - Powell to Give Soft Signal of September Rate Cut: Economics
(Bloomberg Economics) — Markets have fully priced in a Fed rate cut in September, but the big question for the July 30-31 FOMC meeting is: how clearly will the FOMC signal this? We think communications from the July meeting will offer only tentative hints of a September cut, with Fed Chair Jerome Powell noting the potential for a cut “if data evolve as we expect. - Trump Says He Will ‘Probably End Up’ Debating New Rival Harris
(Bloomberg) — Donald Trump said he expects to eventually debate Vice President Kamala Harris, the presumptive Democratic nominee, after previously declining to commit to appear at a scheduled face-off. “Yes. I’ll probably end up debating,” Trump said in an interview with Laura Ingraham that aired Monday evening on Fox News. - China Seizes Chance to Play Peacemaker in Ukraine Before US Vote
(Bloomberg) — Chinese President Xi Jinping is stepping up efforts to position himself as a peacemaker for ending Russia’s war in Ukraine, despite growing criticisms from the US and Europe that Beijing is propping up the Kremlin’s battlefield efforts. With Moscow and Kyiv facing pressure at home and abroad to find a way to end the war. - Roy Cooper Drops Out of Harris’ 2024 Running Mate Search
(Bloomberg) — North Carolina Governor Roy Cooper is withdrawing from consideration to become Vice President Kamala Harris’ running mate, according to a person familiar with the matter. Harris, who emerged last week as the likely Democratic nominee after President Joe Biden’s shock exit from the race, is on a sprint to vet a running mate. - Vitol Hands Traders Record $6.5 Billion Payout After Profit Boom
(Bloomberg) — Vitol Group paid a record dividend of $6.5 billion last year, the latest evidence of how the energy crisis has delivered spectacular riches to the world’s commodity traders. The payout represents an average of some $14 million for each of the roughly 450 employees who own the company with some senior traders likely to have received multiples of that. - Dubai set to welcome even more millionaires as wealthy individuals abandon the UK
The United Arab Emirates is on track to be the world’s top wealth magnet for the third year running, according to research. At the same time, the U.K. already the source of many of the UAE’s expatriates is projected to see its millionaire population drop by 17% by 2028, according to Swiss bank UBS. The trend is likely to accelerate in the wake of the landslide election victory for the U.K.’s Labour Party in June, many financiers believe. - UK Cancels Plan to Sell NatWest Stake to Individual Investors
(Bloomberg) — The UK won’t pursue a plan to sell some of its £6 billion ($8 billion) stakes in NatWest Group Plc to the public, after Chancellor of the Exchequer Rachel Reeves concluded it didn’t provide value for money. “A retail share sale offer would involve significant discounts that could cost taxpayers hundreds of millions of pounds. - Trump’s Talk of Bitcoin Reserve for the U.S. Leaves Industry Waiting for More Details
(CoinDesk) Former President Donald Trump, a sitting U.S. senator and some of the biggest names in bitcoin {{BTC}} investing all seem to agree that the U.S. should begin building a reserve of the most prominent crypto token. But concrete details are few, and it’s not an idea that’s likely to be executed anytime soon.
21.Market Chatter: Starbucks’ Former CEO Howard Schultz Reportedly Opposes Potential Elliott Settlement
Starbucks’ (SBUX) sixth largest shareholder and former Chief Executive Howard Schultz is opposing a proposed settlement between the coffee giant and Elliott Investment Management, Financial Times reported, citing unnamed people familiar with the matter. - Market Chatter: Airbus Cuts Production Targets Amid Shortfall of A320neo’s Engine Parts
Airbus (AIR.PA) lowered its production targets due to a shortage of critical engine parts for its A320neo aircraft, Bloomberg News reported July 26, citing people familiar with the matter. An unusually high number of high-pressure turbine blades were discovered to be non-conforming by engine supplier CFM International. - Heineken shares dropped 10.14%, the most since July 2023, after it reported disappointing first-half earnings results.
Net revenue came in at €14.81 billion, missing estimates of €15.2 billion. Adjusted earnings per share was at €2.15, while estimates were at €2.18. Heineken also cited a fall in the valuation of its stake in China’s largest brewer, China Resources Beer Holdings Co., due to concerns about consumer demand in the mainland that have affected its share price. - McDonald’s shares rose by 3.74% despite reporting poor second quarter earnings.
In the second quarter, revenue came in at $6.49 billion, missing estimates of $6.65 billion. Adjusted earnings per share was at $2.97, while estimates were at $3.07. Comparable sales, a metric that tracks restaurants open for over a year, dropped by 1%, while US comparable sales fell by 0.7%. - Reckitt Benckiser fell 8.8% after a verdict against Abbott Laboratories intensified concerns over infant formula lawsuits faced by both companies.
Similac-maker Abbott was ordered by a jury to pay almost $500 million over allegations it hid the risk that its premature infant formula can cause potentially fatal bowel disease. The verdict follows a decision made against Reckitt’s Mead Johnson Nutrition unit in March, where a jury awarded an Illinois woman $60 million in damages, saying that its Enfamil formula led to the death of her premature baby. Mead Johnson is facing a string of state and federal lawsuits in the US. - Tesla shares rallied 5.6% on Monday after Morgan Stanley named the company as its new top pick within the US autos sector, replacing Ford.
Analyst Adam Jonas maintains his overweight rating and Street-high $310 target on Tesla, while Ford is also still overweight among Morgan Stanley’s coverage Cost cuts and restructuring have helped to restrict the downside to Tesla’s electric vehicles business, Jonas writes. Tesla may be “cornering the market” on zero emission vehicle credits, perhaps accounting for as much as half the credit sales in the market. Sees China risks being managed, notes higher contribution from recurring services revenue, and good positioning within energy storage portfolio. Ford shares fell 1.6%. - Shares of Walt Disney gained 2.5% after a big box office debut for “Deadpool & Wolverine.”
The new Marvel made an estimated $438.3 million globally, including $205 million domestically. Disney said Ryan Reynolds and Hugh Jackman’s movie has achieved the “highest-grossing global opening for an R-rated film” in box office history. - Apple says its AI models were trained on Google’s custom chips
Apple said in a technical paper on Monday that the two AI models underpinning Apple Intelligence, its AI system, were pretrained on Google-designed chips in the cloud. Google’s Tensor Processing Units were initially created for internal workloads, but are now finding some broader adoption. Apple’s decision signals that some Big Tech companies may be looking for and finding alternatives to Nvidia’s graphics processing units when it comes to AI training. - Japan’s central bank starts its monetary policy meeting today
The Bank of Japan kicks off its July monetary policy meeting on Tuesday, with its policy decision due Wednesday. Traders are focused on the central bank’s decision on interest rate and government bond purchases. - Tencent Cloud downplays AI hype when it comes to making games
When it comes to gaming, the use of ChatGPT-like generative artificial intelligence is still in an exploratory phase, according to Liang Chen, general manager of Tencent Cloud’s internet industry department. Chen said that AI has long been used by gaming companies for pattern recognition and other functions, but effective use of generative AI comes with high costs.
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