- Asian Stocks Edge Higher Before Powell’s Testimony: Markets Wrap
(Bloomberg) — Stocks in Asia edged higher ahead of Jerome Powell’s testimony to Congress and the start of the US earnings season. Equity benchmarks rose in Japan, Australia, and South Korea, while futures pointed to losses in Hong Kong after an index of Chinese shares in the US dropped on Monday. - Oil Steady as Traders Assess Beryl’s Impact and Prepare for Fed
(Bloomberg) — Oil steadied after a two-day drop with the worst of storm Beryl over, ahead of Federal Reserve Chair Jerome Powell’s report on monetary policy that’ll shape broader sentiment toward risk assets including commodities. Brent crude traded below $86 a barrel after shedding almost 2% in the prior two sessions, while West Texas Intermediate was above $82. - Hong Kong Unveils Plan to Regulate Uber 10 Years After Launch
(Bloomberg) — Hong Kong outlined long-anticipated plans to regulate ride-hailing services, potentially limiting the scope of Uber Technologies Inc. in a city known for its poor taxi services. Authorities intend to license platforms such as Uber and adopt tougher penalties for rule breaking, the Transport and Logistics Bureau said in a paper published on Monday. - Senators Waver on Biden as Democrats Fret Over How to Beat Trump
(Bloomberg Government) — Democratic senators said Monday they love Joe Biden, they admire his record, but that nothing is more important than beating Donald Trump. The responses as lawmakers returned to Washington for the first time since President Biden’s disastrous debate suggest that while Biden has deep Senate roots. - Biden’s Biggest Donors Left Powerless to Sway Him to End Bid
(Bloomberg) — They pride themselves on being doers; taking decisive action at crucial inflection points and anticipating major power shifts. Yet in the midst of one of the biggest crises ever to strike the Democratic Party, Wall Street’s most influential donors are resigned to watching and waiting like much of the rest of the country. - France Takes Uncharted Path as Snap Vote Delivers Deadlock
(Bloomberg) — France’s political class is drawing breath after a turbulent parliamentary election as officials prepare to begin in earnest negotiations over the next government. Many new lawmakers from the left-wing alliance that came first in Sunday’s vote were focused on hiring advisers and moving into their offices in the National Assembly on Monday. - PBOC Able to Let Yuan Go Without Long Disruption, Survey Shows
(Bloomberg) — China could let its tight grip on the yuan go without triggering a sustained market disruption, according to the majority of respondents in a Bloomberg survey of analysts and traders, though they see only a limited chance of such a move. A Bloomberg poll of 24 domestic and foreign financial institutions suggests they have faith in the People’s Bank of China’s. - BOJ Sounds Out Market Players Before Finalizing Bond-Buying Cuts
(Bloomberg) — The Bank of Japan will speak face-to-face with market participants over the next couple of days in key meetings aimed at gauging a realistic pace for a reduction of its bond purchases to be announced later this month. - Bank of Korea’s Rhee Flags Disinflation Ahead of Rate Decision
(Bloomberg) — Bank of Korea Governor Rhee Chang-yong highlighted a trend of disinflation among factors to consider alongside economic growth and financial stability, speaking in parliament just two days before a policy decision that may pave the way for a pivot on interest rates later this year. - Yield Curve Disinversion Needs Economy, Not Politics: Macro View
(Bloomberg) — A politics-driven steepening of the Treasury yield curve by itself will likely fall short of ending a lengthy bout of inversion. For that to happen, the economy needs to deteriorate decisively enough to push the Federal Reserve to cut interest rates. The market showed a bear-steepening move as the presidential debate boosted the odds for a Donald Trump win. - More Growth, Less Easing – Global Economic Outlook
(Bloomberg Intelligence) — Midway through 2024, robust growth and sticky inflation has kept most major central banks on hold. Bloomberg Economics forecasts global GDP will expand 3% this year, down slightly from 3.1% in 2023 but some way above our December forecast for a 2.7% pace. A cooler second half should unlock rate cuts. - S&P 500 Ekes Out Gain to Notch 35th Record in 2024: Markets Wrap
(Bloomberg) — Stocks closed at all-time highs in a cautious session that saw traders gearing up for Jerome Powell’s testimony to US lawmakers and the start of the earnings season. With a mere 0.1% advance, the S&P 500 notched its 35th record this year. Some of the largest American banks will unofficially kick off the second-quarter reporting season Friday. - Chinese Bond Traders Fear ‘Dagger to the Heart’ as Yields Vanish
(Bloomberg) — Chinese bond traders have few things to celebrate despite this year’s unprecedented market rally. A sluggish economy has pushed the nation’s sovereign bond yields to record lows, sparking anxiety across trading desks at securities firms, banks and fund managers that ever-lower rates will dry up trading and cost them their jobs. - Bridgewater Co-CIO Sees AI Boosting ‘So Much’ of Human Investing
(Bloomberg) — Over the next five years, machine learning can improve “so much of what human investors and analysts can do,” said Greg Jensen, co-chief investment officer of giant hedge fund firm Bridgewater Associates. - Hedge Funds That Piled into Big Tesla Short Stung by Rally
(Bloomberg) — Hedge funds piled into short bets against Tesla Inc. right before the electric vehicle maker unveiled a set of numbers that triggered a hefty share-price rally. About 18% of the 500-plus hedge funds tracked by data provider Hazel tree had an overall short position on Tesla at the end of June, the highest percentage in more than a year. - Paramount Agrees to Sky dance Deal, Ending Redstone Era
(Bloomberg) — Paramount Global agreed to merge with Sky dance Media in a deal that hands control of the storied Hollywood studio to producer David Ellison, ending one of the industry’s most dramatic acquisitions. As part of the complicated deal that was months in the making, Paramount Chair Shari Redstone agreed to sell her family’s National Amusements Inc. - Lilly Agrees to Buy US Biotech Morphic in $3.2 Billion Deal
(Bloomberg) — Eli Lilly & Co. agreed to buy U.S. gut-drug maker Morphic Holding Inc. for about $3.2 billion, plowing some of the proceeds from obesity blockbuster Zepbound into its experimental pipeline. Lilly will pay $57 a share in cash for Waltham, Massachusetts-based Morphic, or 79% more than the closing price Friday, the companies said in a statement Monday. - Gen Z Trading Stocks at 19 Heralds New Age of Market Speculation
(Bloomberg Businessweek) — Legions of retail investors flooded the stock market in 2021, eager to chase volatile “meme stocks” with strong social media followings and weak financials. This passion to own a piece of companies such as GameStop Corp. and AMC Entertainment Holdings Inc. - Target shares rose 2.11% and was among the top performers on the S&P 500 Consumer Staples Index on Monday.
This came after the retailer announced its deals for the back-to-school shopping season. The company also introduced monthly subscription pricing for Target Circle 360, which offers unlimited same-day delivery for its customers. - Exxon Mobil shares slipped 1.05%, after the company said that it expects its refining profits to decline, ranging between $1.1 billion and $1.5 billion in the second quarter.
Exxon is estimated to report its second quarter earnings on 26 July 2024. - Chipotle Mexican Grill shares fall as much as 5.6%, making the burrito chain the worst performer on the S&P Composite 1500 Restaurants Index on Monday. The broader restaurant gauge is down as much as 1.7%.
Chipotle’s 50-for-1 stock split took effect on June 26, and its shares have slid 9.4% since then, underperforming S15REST Index. Still, Chipotle shares remain up 30% this year, while the restaurant gauge is down 6.6%. The restaurants with positive foot traffic and that have shown positive comparable sales so far this year, like Chipotle and Wing stop, have performed exceedingly well, while the rest have struggled, according to Stephen’s analyst Jim Salera. - Shares in European shipping companies fall after Hamas was said to have dropped its objections over a US-backed cease-fire proposal to halt the Gaza conflict with Israel.
Attacks on vessels in the Red Sea carried out by Hamas-aligned Houthi militants have driven up freight prices by lengthening journeys for shipping companies and limiting available capacity. NOTE: The main Shanghai container shipping index has surged since late December and currently trades at the highest level since August 2022. Maersk falls 3.3% at 9:27 a.m. CET; Hapag-Lloyd -5.3%; Frontline -2.2%; Hoegh Auto liners -5.5%; Wallenius Wilhelmsen -4%. - Nike shares drop as much as 3.2% Monday amid continued fallout from its disappointing earnings release post market June 27. On CNBC earlier Monday, Jim Cramer said he will be doing a segment tonight on Mad Money discussing Nike; says for Nike, “everything’s going wrong and I can’t find anything going right, even Jordans.”
Cramer added that the company’s June 27 conference call was a “call of despair”. Meanwhile, China’s Anta Sports Products Limited said Monday that for 2Q, retail sales of Anta branded products recorded high-single digit positive growth y/y. Bloomberg Intelligence analyst Catherine Lim wrote that “Anta’s sequentially stronger 2Q retail sales gains in China vs. Nike’s narrower February-May revenue growth suggest the Chinese firm can better capture the preferences of mainland shoppers with its multi-brands portfolio this year”. - Shares of French banks erased earlier losses, along with the country’s benchmark stocks index, after a surprise victory for the left produced a divided parliament with no clear majority, avoiding a worst-case scenario in the country’s legislature for investors.
Shares in Societe Generale (+1%), BNP Paribas (+0.3%) erased earlier declines, with the Stoxx 600 Banks Index up 0.7%, among the best sectors in Europe. Banks have been in focus since the vote was called as political uncertainty and pressure on French sovereign bonds are looming risks for lenders as they are major holders of French debt. - Gold drops more than 1% as risk appetite grows
Gold prices fell more than 1% on Monday, hurt by a risk-on rally in equities and profit-taking by investors after a sharp rally in the previous session over expectations that the U.S. Federal Reserve could cut interest rates in September. Spot gold was down 1.5% to $2,354.59 per ounce, after rising to its highest level since May 22 on Friday. U.S. gold futures slipped 1.5% to $2,362.70. - Nvidia Corp. shares are up 2.6%, after UBS raised its price target on the AI-focused chipmaker to $150 from $120
“Demand momentum for Blackwell rack-scale systems remains exceedingly robust,” writes analyst Timothy Arcuri. Such tailwinds come as sentiment has recently faded on the stock, “creating more of a ‘wall of worry’ that should be ultimately healthy if our outlook materializes”; Buy rating. Separately, Wolfe Research raised its price target to $150 from $125. - Ecolab shares jump as much as 2.4%, the biggest intraday gain since April 30, after the specialty chemical company was upgraded to buy from hold at Stifel, which said the investment story “sounds better than it has in a long time.”
Analyst Shlomo Rosenbaum sees upside risk to estimates for the next few years, and says Ecolab may achieve its 20% Ebit margin target in the next few years due to factors such as improved volumes, better pricing and portfolio optimization. Ecolab had been affected by the impacts of the pandemic and an inflation-driven increase in input costs, though Rosenbaum notes these are largely behind the company. - Target is among the top performers on the S&P 500 Consumer Staples Index on Monday after the retailer outlined its deals for the back-to-school shopping season.
Its shares are up 2% as of 12:34 p.m. New York time, while the staples index is down 0.3%. Target is offering a list of 20 must-have school supplies that together total less than $20, and it’s selling “thousands” of back-to-college essentials for under $20. It’s also introducing monthly subscription pricing for Target Circle 360, starting at $4.99 per month for college students and $10.99 per month for all consumers, with unlimited same-day delivery. - Stolen crypto doubled to $1.38 billion in the first half of 2024, research firm says
TRM Labs data showed hackers looted $1.38 billion worth of crypto between Jan. 1 and June 24, more than double the $657 million looted in the same period a year ago. Top attack vectors in 2024 include private key and seed phrase compromises. The largest heist so far this year swiped more than $300 million worth of bitcoin from Japanese crypto exchange DMM Bitcoin. - Stock futures edge higher after S&P 500, Nasdaq close at fresh records
U.S. stock futures edged up early Tuesday after the S&P 500 and Nasdaq Composite closed at fresh record highs. Dow Jones Industrial Average futures rose 77 points, or 0.19%. S&P 500 futures and Nasdaq 100 futures climbed 0.26% and 0.40%, respectively. The S&P 500 and Nasdaq Composite closed Monday’s trading session at all-time highs again, each rising slightly as investors awaited key inflation data and earnings results due out later this week. The broad market index closed up 0.1%, while the tech-heavy Nasdaq gained 0.3%. Meanwhile, the Dow Jones Industrial Average was the laggard, closing down 31 points, or 0.1%. - Lucid Group shares up as much as 6.8% Monday, after the EV startup announced 2Q production and delivery metrics.
LCID produced 2,110 vehicles; delivered 2,394 vehicles. Set its 2Q earnings call for Aug. 5 at 5:30pm ET Citi analyst Itay Michaeli (neutral) says 2Q deliveries were 6% ahead of Citi’s estimate; Following Tesla ‘s beat, Lucid’s 2Q deliveries serve as another dose of better news on the EV front, consistent with Citi’s thesis for improving EV sentiment this summer versus the negative sentiment seen over the past 6+ months. That said, the 6–12-month Lucid investment story largely hinges on the Gravity SUV launch, for which the analyst will look for updates on the Aug. 5 call. For now, Michaeli expects a favourable reaction to the 2Q delivery outcome. - Monday’s rally comes after Morgan Stanley raised its target on the stock by about 9%, expecting the chip maker to raise its full-year sales estimate in the earnings announcement next week. The broker also sees TSMC hiking wafer prices due to its strong bargaining power.
“TSMC’s ‘hunger marketing’ strategy seems to be working,” Morgan Stanley analysts including Charlie Chan wrote in a note Sunday. “Our latest supply chain checks indicate that TSMC is delivering a message that leading-edge foundry supply could be tight in 2025 and customers may not get sufficient capacity allocation without appreciating TSMC’s value.” JPMorgan analysts including Gokul Hariharan also anticipate the company will raise its revenue guidance in the earnings call. “We expect TSMC to sound more constructive on AI accelerator demand,” he wrote in a note Sunday.
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