S&P Futures Tick Higher Ahead of Key U.S. Retail Sales Data and More Big Bank Earnings

September S&P 500 E-Mini futures (ESU24) are trending up +0.12% this morning as market participants looked ahead to key U.S. retail sales data and quarterly reports from more big banks.

In yesterday’s trading session, Wall Street’s main stock indexes closed higher, with the benchmark S&P 500 and blue-chip Dow posting new record highs. Trump Media & Technology Group (DJT) soared over +31% after a failed assassination attempt on former President Donald Trump on Saturday evening potentially boosted his chances of winning the presidential election in November. Also, Apple (AAPL) closed up more than +1% at a record high after Morgan Stanley named the stock as a “Top Pick” with a price target of $273. In addition, Goldman Sachs (GS) gained over +2% as upbeat Q2 results overshadowed plans to moderate the pace of buybacks. On the bearish side, Macy’s (M) tumbled more than -11% after the department store chain announced that it had ended buyout discussions with Arkhouse Management and Brigade Capital Management.

Economic data on Monday showed that the Empire State manufacturing index fell to -6.60 in July, weaker than expectations of -5.50.

Federal Reserve Chair Jerome Powell said in an interview on Monday that second-quarter economic data has given policymakers greater confidence that inflation is trending towards the central bank’s 2% target, potentially setting the stage for near-term interest rate cuts. Powell also remarked that the labor market has shifted into better balance and that monetary lags imply the Fed can take action before achieving the 2% inflation target. At the same time, the Fed chief made clear that he would not send “any signals” regarding the timing of rate cuts. Separately, San Francisco Fed President Mary Daly remarked that inflation is decreasing in a manner that boosts confidence it is moving towards 2%. “Inflation is coming down and it’s doing so in a way that confidence is growing that we’re getting nearer a sustainable pace of getting inflation back down to 2%,” Daly said.

Meanwhile, U.S. rate futures have priced in an 8.6% chance of a 25 basis point rate cut at July’s monetary policy meeting and a 99.4% probability of at least a 25 basis point rate cut at the conclusion of the Fed’s September meeting.

On the earnings front, notable companies like UnitedHealth (UNH), Bank of America (BAC), Morgan Stanley (MS), PNC Financial (PNC), and JB Hunt Transport (JBHT) are set to report their quarterly figures today.

On the economic data front, all eyes are focused on U.S. Retail Sales data, set to be released in a couple of hours. Economists, on average, forecast that June Retail Sales will stand at -0.3% m/m, compared to last month’s figure of +0.1% m/m.

Also, investors will focus on U.S. Core Retail Sales data, which came in at -0.1% m/m in May. Economists foresee the June figure to be +0.1% m/m.

The U.S. Import Price Index for June will be reported today. Economists anticipate the import price index to be +0.2% m/m, compared to the previous figure of -0.4% m/m.

U.S. Business Inventories data will come in today as well. Economists foresee this figure to arrive at +0.4% m/m in May, compared to the previous number of +0.3% m/m.

In addition, market participants will be anticipating a speech from Fed Governor Adriana Kugler.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.176%, down -1.26%.

The Euro Stoxx 50 futures are down -0.60% this morning, extending the losses from the previous session as investors digested more corporate results and awaited the European Central Bank’s interest rate decision later this week. Mining and insurance stocks underperformed on Tuesday. Final data from the statistical office Istat showed Tuesday that Italy’s annual inflation rate remained unchanged at 0.8% in June, matching the preliminary reading. Separately, the ZEW Economic Research Institute reported Tuesday that German investor morale worsened in July. Meanwhile, market participants are anticipating the ECB’s interest rate decision on Thursday, with the central bank widely expected to maintain interest rates unchanged following its first rate cut in this cycle last month. In corporate news, Hugo Boss Ag (BOSS.D.DX) plunged over -8% after the German fashion house trimmed its full-year sales guidance. Also, Rio Tinto Plc (RIO.LN) fell more than -2% after providing weaker-than-expected guidance on its copper operations.

Italy’s CPI, Germany’s ZEW Economic Sentiment Index, and Eurozone’s ZEW Economic Sentiment Index were released today.

The Italian June CPI has been reported at +0.1% m/m and +0.8% y/y, in line with expectations.

The German July ZEW Economic Sentiment Index came in at 41.8, stronger than expectations of 41.2.

Eurozone July ZEW Economic Sentiment Index arrived at 43.7, weaker than expectations of 48.1.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.08%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.20%.

China’s Shanghai Composite Index closed slightly higher today. Gains in semiconductor and software stocks led the overall market higher on Tuesday. China reported slower-than-expected growth in the second quarter on Monday amid an extended downturn in the property market and concerns over employment, prompting several major banks to lower their full-year GDP forecasts. Barclays revised its 2024 China GDP forecast down to 4.8% from 5%, Goldman Sachs adjusted its forecast to 4.9% from 5%, and JPMorgan downgraded its forecast to 4.7% from 5.2%. Also, the increased likelihood of a second Donald Trump presidency in the U.S. is viewed as a negative development for China. According to new research from UBS Group AG, new tariffs of 60% on all Chinese exports to the U.S. would reduce China’s annual growth rate by more than half. Meanwhile, the closely watched Third Plenum will outline efforts to promote advanced manufacturing, reform the tax system to mitigate debt risks, manage a significant property crisis, stimulate domestic consumption, and revitalize the private sector. The details are expected to be released on Thursday. In other news, the People’s Bank of China injected a net 674 billion yuan ($93 billion) in liquidity into the banking system through reverse repurchase operations on Tuesday, the largest amount since January. In corporate news, Ping An Insurance slumped over -5% in Hong Kong after the insurer said it had raised $3.5 billion via convertible bonds.

Japan’s Nikkei 225 Stock Index closed slightly higher today, tracking overnight gains on Wall Street as expectations for a second Donald Trump presidency increased following the assassination attempt. Defense and financial stocks led the gains on Tuesday. Export-oriented stocks also advanced as the Japanese yen weakened against the dollar on bets that the currency would remain weak during Trump’s second term. Meanwhile, Japanese Chief Cabinet Secretary Yoshimasa Hayashi said on Tuesday that authorities are prepared to take all possible measures in the currency market, emphasizing the undesirability of excessively volatile movements. Japan’s 10-year government bond yield fell to its lowest level in nearly three weeks, mirroring a decline in U.S. Treasury yields after Fed Chair Jerome Powell remarked that recent data “add somewhat to confidence” that inflation is returning to the central bank’s 2% target. In corporate news, Metaplanet surged over +9% after announcing the acquisition of 21.877 Bitcoin for 200 million yen. Also, Mitsubishi Heavy Industries climbed over +5% as speculation of a Trump win spurred so-called “Trump trades” among Japanese stocks. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -2.50% to 17.91.

The Japanese May Tertiary Industry Activity Index stood at -0.4% m/m, weaker than expectations of +0.1% m/m.

Pre-Market U.S. Stock Movers

Match Group (MTCH) climbed more than +8% in pre-market trading after activist investor Starboard Value disclosed a stake of around 6.6% in the dating app company and advocated for a turnaround or potential sale.

Kyverna Therapeutics (KYTX) surged over +7% in pre-market trading after announcing that the U.S. Food and Drug Administration designated its drug candidate, KYV-101, as a Regenerative Medicine Advanced Therapy for treating patients with refractory stiff-person syndrome.

Shopify (SHOP) rose more than +3% in pre-market trading after BofA upgraded the stock to Buy from Neutral with an $82 price target.

EPAM Systems (EPAM) gained over +1% in pre-market trading after Jefferies upgraded the stock to Buy from Hold with a price target of $237.

Trump Media & Technology Group (DJT) slumped more than -8% in pre-market trading after filing for the resale of about 38 million common shares.

Dollar Tree (DLTR) fell over -2% in pre-market trading after Piper Sandler downgraded the stock to Neutral from Overweight.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - July 16th

UnitedHealth (UNH), Bank of America (BAC), Morgan Stanley (MS), PNC Financial (PNC), Interactive Brokers (IBKR), State Street (STT), Omnicom (OMC), JB Hunt (JBHT), Pinnacle (PNFP), Hancock Whitney (HWC), Fulton (FULT), Mercantile (MBWM), Great Southern Bancorp (GSBC), Equity Bancshares Inc (EQBK), Aehr Test Systems (AEHR), AngioDynamics (ANGO).

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