- US stocks were ultimately mixed and the major indices finished with mild losses as attention centred around earnings releases with slight pressure in the NDX as semis declined after NXPI earnings disappointed, although the small-cap Russell 2000 index outperformed, while there was also some weakness observed heading into the closing bell as participants braced for key earnings from the likes of Alphabet and Tesla. The performances amongst the sectors were also varied with notable weakness seen in energy after oil prices extended on recent losses amid the lingering Chinese economic woes.
- USD was slightly firmer as losses against the yen were offset by gains elsewhere although upside was limited as newsflow remained light ahead of the key risk events later in the week in the form of US GDP Advance and PCE, while existing home sales declined more than expected and Richmond Fed largely disappointed.
- Looking ahead, highlights include Australian, Japanese & Indian Flash PMIs, New Zealand Credit Card Spending, Supply from Japan.
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LOOKING AHEAD
- Highlights include Australian, Japanese & Indian Flash PMIs, New Zealand Credit Card Spending, Supply from Japan.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks were ultimately mixed and the major indices finished with mild losses as attention centred around earnings releases with slight pressure in the NDX as semis declined after NXPI earnings disappointed, although the small-cap Russell 2000 index outperformed, while there was also some weakness observed heading into the closing bell as participants braced for key earnings from the likes of Google and Tesla. The performances amongst the sectors were also varied with notable weakness seen in energy after oil prices extended on recent losses amid the lingering Chinese economic woes.
- SPX -0.2% at 5,556, NDX -0.4% at 19,754, DJIA -0.1% at 40,358, RUT +1.0% at 2,243
- Click here for a detailed summary.
NOTABLE HEADLINES
- US Senate Democratic Leader Schumer and House Democratic Leader Jeffries are poised to endorse Harris as soon as today, according to Politico citing sources.
- US Presidential candidate Trump said he has never discussed or thought of Jamie Dimon or Larry Fink for US Treasury Secretary.
NOTABLE AFTER-MARKET EARNINGS
- Alphabet Inc (GOOGL) Q2 2024 (USD): EPS 1.89 (exp. 1.84), Revenue 84.742bln (exp. 84.18bln).
- Tesla Inc (TSLA) Q2 2024 (USD): Adj. EPS 0.52 (exp. 0.62), Revenue 25.5bln (exp. 24.77bln).
- Visa Inc (V) Q3 2024 (USD): Adj. EPS 2.51 (exp. 2.43), Revenue 8.9bln (exp. 8.89bln).
DATA RECAP
- US Richmond Fed Comp. Index (Jul) -17.0 (Prev. -10.0)
- US Richmond Fed Mfg. Shipments (Jul) -21.0 (Prev. -9.0)
- US Richmond Fed Services Index (Jul) 5.0 (Prev. -11.0, Rev. -7)
- US Philadelphia Fed Non-Manufacturing Index (Jul) Regional Activity -19.1 (prev. 2.9)
- US Philadelphia Fed Non. Mfg. General Activity (firm level) -10 (prev. +15.1)
- US Philadelphia Fed Non. Mfg New Orders -7.1 (prev. +6.7)
- US Philadelphia Fed Non. Mfg Employment (full time) -4.9 (prev. +14.6)
- US Philadelphia Fed Non. Mfg Prices paid 30.2 (prev. 24.4).
FX
- USD was slightly firmer as losses against the yen were offset by gains elsewhere although upside was limited as newsflow remained light ahead of the key risk events later in the week in the form of US GDP Advance and PCE, while existing home sales declined more than expected and Richmond Fed largely disappointed.
- EUR weakened in a steady retreat beneath the 1.0900 level against the dollar, while there were comments from ECB's de Guindos who stated that data-wise, September is a much more convenient month for taking decisions than July was.
- GBP was pressured which saw GBP/USD test the 1.2900 level to the downside in the absence of any major catalysts and with weakness in cyclical peers.
- JPY outperformed with USD/JPY at a sub-157.00 handle heading closer towards next week's key BoJ meeting.
- CBRT maintained its Weekly Repo Rate at 50% as expected and reiterated that it remains highly attentive to inflation risks. CBRT said the tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range.
- Hungarian Base Rate (Jul) 6.75% vs. Exp. 6.75% (Prev. 7.0%). NBH said a careful and patient approach to monetary policy is warranted, while the inflation rate is expected to fluctuate within the tolerance band and close to its upper bound in the coming months. Furthermore, it noted that several members strongly argued for no rate change today.
- Hungary Central Bank Deputy Governor Virag said market expectations for 1-2 additional rate cuts this year are realistic and upcoming decisions will be about no change or a small rate reduction, while he added that inflation could be below market expectations in H2 2024.
FIXED INCOME
- T-notes were higher amid bull-steepening with Harris off to a strong start in her Presidential campaign while soft existing home sales and a strong 2yr auction supported the moves.
COMMODITIES
- Oil prices continued on their declines as headwinds from China's demand woes lingered.
- US Private Inventory Data (bbls): Crude -3.9mln (exp. -1.6mln), Distillate -1.5mln (exp. +0.2mln), Gasoline -2.8mln (exp. -0.4mln), Cushing -1.6mln.
- Iran set August Iranian Light Crude OSP to Asia at Oman/Dubai +USD 2.10/bbl (prev. +USD 2.60/bbl).
- Chinese President Xi said China is willing to work with Russia to continue to promote mutually beneficial cooperation in the energy sector, as well as maintain stability and resilience of energy industrial, and supply chains.
- Russian Deputy PM Novak said Russia will reinstall a gasoline exports ban from August 1st and he did not want to comment on the interruption of Russian oil supplies via Ukraine, while he stated that Russia is working so that supplies continue and it is close to reaching oil output quotas within OPEC+.
GEOPOLITICAL
MIDDLE EAST
- Israeli warplanes broke the sound barrier over the Lebanese capital Beirut and other areas of Lebanon on Tuesday, according to Reuters citing Lebanese security sources.
- Senior Yemeni official cautioned that retaliation for the recent deadly airstrike on Hudaydah will not be postponed and that Israel must be prepared for unexpected events in the coming days, according to Tehran Times.
OTHER
- Russia and Iran will soon sign an agreement on comprehensive cooperation, according to TASS.
ASIA-PAC
NOTABLE HEADLINES
- Chinese Vice Premier Ding Xiexiang said they are ready to strengthen logistics chains on energy supply.
- Taiwan suspended stock trading for Wednesday due to Typhoon Gaemi.
EU/UK
NOTABLE HEADLINES
- ECB's de Guindos said data-wise, September is a much more convenient month for making decisions than July and the ECB has to be prudent when making decisions. Furthermore, he said inflation data is practically in line with the projection and they are already seeing wages starting to slow down.
- ECB reportedly weighs halving leveraged finance probe provision demand to about EUR 7bln, according to Bloomberg. It was also reported that ECB cyber stress tests reveal material deficits at some banks, according to Bloomberg citing KPMG
DATA RECAP
- EU Consumer Confidence Flash (Jul) -13.0 vs. Exp. -13.4 (Prev. -14.0)
