MARKET WRAPS
Watch For:
Retail Sales for June; Industrial Production & Capacity Utilization for June; Canada Housing Starts for June; Canada CPI for June; Earnings from Morgan Stanley; Bank of America; Charles Schwab; PNC Financial; Bank of New York Mellon; Lockheed Martin
Today's Top Headlines/Must Reads:
- Shoppers Likely Spent More Last Month as Inflation Eased
- Beijing Launches Policies to Boost Consumption-But Not Major Stimulus
- Silicon Valley Money Men Are Buzzing About Robert F. Kennedy Jr.
- U.S. Pushes Military Cooperation in Space
Follow WSJ market coverage here
Opening Call:
Stock futures were steady on Tuesday as traders awaited fresh earnings reports, including from some major banks, and retail sales data.
Bank earnings season got off to a strong start last week, whose results have only added to investor optimism that the Federal Reserve's campaign to raise interest rates to tame inflation is working without doing too much damage to the economy.
Some analysts believe monetary policy remains the main driver of markets.
"...with nominal growth holding up, inflation easing and expectations for earnings not that high, I suspect interest rates will continue to be the most important factor for risk markets," SPI Asset Management said.
Retail sales data will give investors further insight into the economy.
"It is expected that consumer spending will continue to contribute positively to Q2 GDP growth. However, the outlook for the second half of 2023 remains uncertain," TickMill Group said.
Overseas indexes were mixed. Europe's Stoxx 600 added 0.2%, while Asian indexes were mostly lower. The Hang Seng led losses, declining over 2% as concerns about China's property sector weighed on the city's developers.
Pre-Market Movers
AT&T shares rose about 1% after it closed Monday at a three-decade low, extending recent losses after a WSJ investigation into toxic lead cables left behind by telecommunications companies. Read more .
FB Financial posted a surge in profit amid a stronger capital base in the second quarter of the year. Shares rose 16%.
Masimo said it plans to lower its full-year revenue guidance as second quarter revenue is expected to miss expectations. Shares dropped almost 27%.
ADRs of Novartis rose 3.5% after the company raised its full-year outlook and announced a buyback of $15 billion. Read more .
Monday's Post-Close Movers
Acumen Pharmaceuticals said it commenced an underwritten public offering of $100 million for shares of its common stock. The stock fell 9.5%.
CEL-SCI said it would sell common stock without saying how many shares it was offering or providing a price range. Shares fell 18%.
Karyopharm Therapeutics said it received fast track designation from the FDA for its rare blood cancer treatment. Shares rose 7.2%.
Forex:
The dollar fell further, hitting another 15-month low against the euro, and UniCredit Research said low dollar volatility suggests investors are confident that the currency can weaken further.
The DXY dollar index remains below 100 but its associated implied volatility "has not spiked significantly higher," UniCredit said.
"These are all signs that investors do not intend to take big profits now because they remain convinced that the dollar has room to weaken further."
Retail sales data and industrial production are unlikely to offer the dollar much support, it added.
Read US Economic Outperformance Could Help Dollar Recover
Read Euro Could Struggle From Here After Hitting New 15-Month High Vs Dollar
Bonds:
The 10-year Treasury and German Bund yields are expected to trend sideways in the coming months, albeit with some continued volatility, but to fall on a one-year horizon, DZ Bank Research said.
DZ Bank Research expects the 10-year Treasury yield at 3.60% on three- and six-month horizons and at 3.40% in 12 months' time.
The 10-year Bund yield is expected at 2.50% on three- and six-month horizons and at 2.40% on 12 months' time.
Energy:
Oil prices edged lower in Europe as concerns lingered about what a weak Chinese economy would mean for demand.
Weaker-than-expected Chinese GDP data undermined oil with Brent ending down 1.7% on Monday with concerns stretching into Tuesday as investors awaited U.S. crude stock figures from the API.
"Demand is still the key concern for the oil market," ING said. "This is particularly the case when it comes to China, given it makes up the bulk of expected demand growth this year."
Metals:
Base metals edged lower as sentiment surrounding China's economy remains weak but low inventories should put a floor under prices.
Of particular concern for base metals which derive significant demand from Chinese home building, the figures showed the nation's property investment was weak, ANZ said. Still, low stock levels should contain declines, it added.
LME aluminum inventories were at their lowest since April while copper stocks hit a similar low last week.
Read Copper M&A Set to Roll On in 2H, Says Macquarie
TODAY'S TOP HEADLINES
Berkshire Cuts Activision Stake by 70% to 14.6 Million Shares as Deal Nears
Berkshire Hathaway has reduced its stake in Activision Blizzard by 70% as Microsoft seems poised to buy the maker of videogames.
In a filing late Monday, Berkshire Hathaway (ticker: BRKb) reduced its investment in Activision Blizzard (ATVI) to 14.7 million shares, according to a form it filed with the Securities and Exchange Commission. Berkshire Hathaway had held 49.4 million shares on March 31, the most recently reported date.
Peacock Becomes Latest Streaming Service to Raise Prices
NBCUniversal is raising the price of its Peacock streaming service by as much as $2 a month, the latest sign that entertainment companies are putting a greater emphasis on profitability after years of costly investments.
The price increase comes as Peacock continues to lose money and has been spending more on live sports and original content.
Pro Take: In a Tight Labor Market, Noncompetes Restrict Millions From New Jobs
Seventeen million U.S. employees, or 11% of workers, are bound by noncompete agreements that potentially hinder them from finding better-paying or more satisfying jobs, new research from the Federal Reserve Bank of Minneapolis shows.
And it isn't just executives, software engineers, doctors or other highly paid workers with knowledge of valuable trade secrets and client lists who are affected. Employers have imposed noncompetes broadly in lower-wage areas, so even some food servers, hair stylists and office cleaners are hindered from taking advantage of today's tight labor market by switching jobs for better pay.
RBA Leaves Door Ajar to Raise Rates Further, Depending on Data
SYDNEY-The prospect of a further interest-rate increase by the Reserve Bank of Australia as early as August remains high, with minutes of the central bank's July 4 policy meeting warning that even tighter policy settings may be required to bring down inflation.
The RBA left the official cash rate on hold at 4.10% at the policy meeting, but kept open the possibility for further hikes, with the release of second-quarter inflation data at the end of this month critical to the decision.
The Man Charged With Steering the Yuan Through China's Economic Turmoil
A veteran economist and banker had been getting ready to retire in the weeks before Chinese leader Xi Jinping picked him to lead China's central bank, according to officials familiar with the matter.
Now, Pan Gongsheng is set to take the reins at the People's Bank of China as it confronts an urgent challenge: whether and how to defend the Chinese yuan.
The Race to the First Republican Debate
The first Republican presidential primary debate is slated for Aug. 23 in Milwaukee. Twelve candidates have entered the race to date, but some are unlikely to make the stage for the first debate. To participate, candidates must meet a mix of fundraising and polling criteria set by the Republican National Committee. They must also pledge to support the party's eventual nominee.
Ukraine Adopts Slow Approach to Counteroffensive: 'Our Problem Everywhere Is the Sky'
ORIKHIV, Ukraine-Six weeks into Ukraine's counteroffensive, Capt. Anatoliy Kharchenko and his reconnaissance company were supposed to be wreaking havoc miles behind Russian defensive lines pierced by Western-supplied armored vehicles.
Instead, after many of the vehicles got bogged down in minefields, Kharchenko and his men are training how to advance methodically on foot, moving from one line of trees to another, faced with the prospect of taking back their country one field at a time.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
None scheduled
Economic Calendar (ET)
0815 Jun Housing Starts
0830 Jun CPI
0830 Jun Industrial Prices, Raw Material Prices
Expected Major Events for Tuesday
04:30/JPN: May Tertiary Industry Index
04:30/JPN: May Revised Retail Sales
08:30/UK: Apr Card Spending statistics
12:15/CAN: Jun Housing Starts
12:30/US: Jun Advance Monthly Sales for Retail & Food Services
12:30/CAN: Jun CPI
12:30/CAN: Jun Industrial product and raw materials price indexes
12:55/US: 07/15 Johnson Redbook Retail Sales Index
13:15/US: Jun Industrial Production & Capacity Utilization
14:00/US: May Manufacturing & Trade: Inventories & Sales
14:00/US: Jul NAHB Housing Market Index
20:00/US: May Treasury International Capital Data
20:30/US: 07/14 API Weekly Statistical Bulletin
23:01/UK: Jun Scottish Retail Sales Monitor
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Tuesday
AAR Corp (AIR) is expected to report $0.80 for 4Q.
AmeriServ Financial Inc (ASRV) is expected to report for 2Q.
Arrow Financial (AROW) is expected to report $0.73 for 1Q.
Bank First Corp (BFC) is expected to report $1.41 for 2Q.
Bank of America Corp (BAC) is expected to report $0.84 for 2Q.
(MORE TO FOLLOW) Dow Jones Newswires
07-18-23 0617ET
