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Daily Markets: Bank Profits, Inflation on Traders’ Minds


The big picture today

Asia-Pacific stock indices ended today’s session mixed, with Australia’s ASX All Ordinaries falling 0.74% and China’s Shanghai Composite and Hong Kong’s Hang Seng down 1 .64% and 2.19% on a lackluster Chinese GPD print in Q2 while South Korea’s KOSPI gained 0.37%, Japan’s Nikkei rose 0.54% and India’s Sensex advanced 0, 65%. Taiwan’s TAIEX led the way, up 0.78% on the day. By midday, major European equity indices are up across the board and US futures are pointing to a positive open later this morning.

Amid the deluge of quarterly earnings reports from banks this morning, the flow of national economic data will continue with the June retail sales report before stocks begin trading today. With gasoline prices apparently peaking during the month, readers will want to analyze the data more carefully, focusing on the core retail sales figure which excludes both gasoline retail sales and of automobiles. The comparison between this June figure and those of recent months will be used to assess the health of a powerful economic force in the United States – the consumer.

The June report also wraps up the data set for the second quarter, bringing with it a yardstick by which to measure companies as they release their latest quarterly results in the coming months. This report and a few others released today, coupled with data from earlier this week, will influence the Atlanta Fed’s latest GDPNow update. When last updated on July 8, this model indicated -1.2% of GDP for the June quarter, but what it says with an even fuller picture of June and Q2 data will help determine whether or not the US economy is in recession.

Over the past few days, as the June CPI and PPI data were released and digested, we have seen wild swings in the CME tool FedWatch’s expectations of potential Federal Reserve monetary policy actions. at its July and September meetings. As we head into the weekend, readers should also pay attention to updates from the FedWatch tool. Chances are high that this will shape how stocks close out the week.

Data download

International economy

Last night, China released 2Q 2022 GDP at 0.40%, against estimates of 1.70%, which were already significantly higher than the Q1 print of 4.80%. June’s industrial production was flagged showing 3.90% year-on-year growth from the previously reported 0.70% figure, as the country begins to emerge from its self-imposed Zero Covid policies.

Domestical economy

The June retail sales report will be released at 8:30 a.m. ET and the overall figure is expected to rebound to +0.% MoM from -0.3% in May. On an annual basis, this is equivalent to +6.5% for June against 8.1% in May.

Industrial production for June will be released at 9:15 a.m. and is expected to rise 4.8% year-on-year, down from May’s 5.4% rise. Beyond the data for utilities and mining, investors will likely focus on June manufacturing output, which is expected to rise 3.9% year-on-year, a bit slower than the 4.7% in may.

Given the concern over bloated retail inventories, today’s business inventory data for May may be closer than usual. When the report is released at 10:00 a.m. ET today, we’ll see if the data advances to +1.3% MoM in May versus 1.2% in April.

The University of Michigan consumer sentiment survey hit a record low of 50.0 in June, with 79% of consumers expecting bad times in the year ahead, the highest since 2008. We’ll see if the decline in gasoline prices has done anything to improve the consumer. view or whether the consensus call for a July reading of 49.9 is on silver.

Markets

The Nasdaq Composite was the only index to stay in positive territory yesterday, gaining 0.03% as markets continue to come under pressure from inflation in the form of a surprisingly high PPI of 11.30% in June. While other major indices were down, the day’s losses averaged around 30 basis points (0.30%). In terms of individual names, Costco Wholesaler (COST) took the news in stride, up 4.01% on the day while Conagra Brands (CAG) fell 7.25%.

Here’s how the main market indicators stack up since the start of the year:

  • Dow Jones Industrial Average: -15.71%
  • S&P 500: -20.47%
  • Nasdaq compound: -28.08%
  • Russell 2000: -23.95%
  • Bitcoin (USD-BTC): -56.34%
  • Ether (ETH-USD): -67.65%

Stocks to Watch

Prior to the start of trading for stocks listed in the United States, BlackRock (BLK), BNY Mellon (BNY), Citigroup (C), PNC (PNC), State Street (STT), United Health (UNH)and Wells Fargo (WFC) should publish their latest quarterly results.

Amazon (AMZN) will more than halve the number of private label items it sells from approximately 243,000 items across 45 different brands and may exit the private label business entirely to ease regulatory pressure. Meanwhile, Amazon also said it would create more than 4,000 new jobs this year, despite fears that rising inflation will hurt consumer demand. Regarding its Prime Day 2022, the company announced that members purchased over 300 million items during the two-day event, making the event the biggest Prime Day event in its history.

Shares of Pinterest (PINS) climbed in aftermarket trading last night following a report from The Wall Street Journal this activist investor Elliott Management Corp. took a stake in the company.

Ericsson (ERIC) announced that it has received approval from the Committee on Foreign Investment in the United States (CFIUS) to finalize the acquisition of Vonage Holdings (VG).

Bloomberg reports that Senate Democrats plan to introduce a bill to decriminalize marijuana at the federal level next week.

IPOs

Following recent IPO pricing this week, including Nano-Laboratories and Virax Biolans Group, investors should monitor how these new issues are trading, as this will help determine whether the IPO market window opens. Readers interested in learning more about the timing of upcoming IPOs should visit Nasdaq’s Most Recent and Upcoming IPOs page.

After today’s market close

No company is expected to release quarterly results after shares halt trading today. Those interested in learning more about which companies release their reports when head to the Nasdaq earnings calendar.

on the horizon

Monday July 18

  • United States: NAHB Housing Market Index – May

tuesday july 19

  • United Kingdom: average income index, unemployment rate – May
  • Euro zone: CPI – June
  • United States: housing starts and building permits – June

Wednesday July 20

  • United Kingdom: CPI, PPI – June
  • Germany: CPI, PPI – June
  • US: Weekly MBA Mortgage Applications
  • United States: Sales of existing homes – June
  • United States: EIA Weekly Crude Oil Inventories

Thursday July 21

  • Japan: Bank of Japan interest rate decision
  • Euro zone: European Central Bank decision on interest rates
  • United States: Initial and Continuing Weekly Unemployment Claims
  • United States: Philadelphia Fed Manufacturing Index – July
  • United States: leading indicators index – June
  • United States: EIA Weekly Natural Gas Inventories

friday july 22

  • Japan: CPI – June.
  • Japan: Manufacturing and services PMI flash – July
  • United Kingdom: Retail sales – June
  • Euro zone: Manufacturing and services PMI flash – July
  • United States: Flash manufacturing and services PMI – July

Thought of the day

“If you change the way you look at things, the things you look at change.” ~Wayne Dyer

Disclosures

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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