Big reports day, political news from the US, Ethereum ETF approval on NYSE, corporate reviews
Fundamental Reviews
• Markets took Joe Biden's withdrawal from the US presidential race in stride, turning their focus from policy to earnings and interest rates.
• In the US, the rate cut in September is practically locked into prices, while in Europe a 25 basis point cut is expected in October.
• Eurozone consumer confidence and US existing home sales data due on Tuesday are unlikely to change this outlook.
• Speaker of the US House of Representatives Johnson called on Biden to resign after refusing to participate in the election. Kamala Harris has announced that she will run for President of the United States.
• Pro-Democratic CNN writes that Trump and Harris have almost identical ratings. Trump's campaign has switched to the fight against Harris; her nomination could change the course of the election race - Reuters. The publication's sources said his campaign had been preparing for Harris for several weeks in case Biden dropped out of the running and she won her party's nomination.
Kamala Harris collected more than $50 million in online donations in a matter of hours
Members of the Democratic Party welcomed Joe Biden's exit from the presidential race by donating more than fifty million dollars to Kamala Harris, The New York Times writes, based on an analysis of data from ActBlue, a site that processes online donors. Democrats have not seen such a volume of transfers since the 2020 elections, the publication emphasizes.
• China Focuses on Kamala Harris' Weaknesses After Biden's Departure - Bloomberg. China has officially avoided commenting on Kamala Harris' late entry into the US presidential race. But state-backed media and social media users are calling her a weak candidate.
• Berlin fears weakening US security guarantees and rising import tariffs if Trump comes to power. Michael Link, coordinator of transatlantic relations in the German government, called Joe Biden's refusal to run for a second term a “profound turning point.”
• Azerbaijan criticized the EU over gas - FT. Baku accused the EU of concluding only short-term gas agreements when long-term ones are needed to meet European demand. In 2022, Brussels and Baku entered into an agreement to increase annual gas exports from Azerbaijan to the EU to 20 billion cubic meters until 2027. But the EU's climate plans stand in the way.
In particular, in order to increase supplies, it is necessary to expand the pipelines of the Southern Gas Corridor. But EU rules prohibit spending budget money on fossil fuel infrastructure.
Stock reviews
• Grayscale's Spot ETH Ethereum ETF is NYSE approved. Listing and registration of shares July 23 - today.
• Stock markets are stabilizing after a sharp sell-off in chip stocks, with traders expected to look to earnings after the market close from Tesla and Alphabet, the first of the Magnificent Seven companies to report earnings.
• Tesla's profitability is expected to decline, while Alphabet is expected to report its fourth straight quarter of double-digit revenue growth amid a rebound in the advertising market.
• Google on Monday abandoned plans to remove user-tracking cookies from its Chrome browser under pressure from advertisers who use cookie data to target ads.
• In the US, Texas Instruments and Visa also report after the market opens, and Coca-Cola, General Electric, General Motors and UPS report before the market opens.
• Luxury stocks rose after China's surprise rate cut on Monday, but the sector is suffering from a prolonged spending slump in the world's second-largest economy.
• Profit warnings from Burberry and Hugo Boss coupled with Richemont's 27% drop in quarterly sales in Greater China last week dashed hopes for a better second half of the year.
• Hong Kong will launch Asia's first inverse Bitcoin ETF. Asia's first inverse exchange-traded fund, CSOP Bitcoin Futures Daily (-1x) Inverse, which will allow investors to bet on the cryptocurrency's decline, will debut in Hong Kong on Tuesday.
• Philip Morris wants to lure minors into using IQOS - investigation. Philip Morris International is spending enormous resources to create a new “tobacco epidemic” and entice a new generation of minors to smoke its IQOS heated tobacco product. This is stated in the report of the network of academic and public health organizations STOP, which analyzed the leak of documents from Philip Morris Japan.
• In Japan, supermarket workers are being monitored by an evil AI - it evaluates their smile, facial expression, tone of communication with customers and 450 other parameters. The system was called “Mr Smile” - the developers claim that the quality of service has improved by 160% in 3 months. The hard workers did not appreciate the update: for not having a friendly enough smile, you can get a reprimand or even a fine.
• Elon Musk announced the release of Tesla humanoid robots for internal use in 2025 - Reuters. They hope to begin mass production of robots for use by other companies in 2026, Musk said.
• Ryanair shares collapse: the low-cost airline complains about the inefficiency of European airports. The share price of Europe's largest low-cost airline Ryanair fell by 12.5% after the publication of its quarterly report. In the second quarter, the company's profit fell 46% year-on-year to 260 million euros, even as the airline increased passenger traffic by 10%. The decline in profits was due to a year-on-year decline in average airfare from €49.07 to €41.93.
• Nvidia is preparing a version of its new flagship AI chips for the Chinese market. It will be compatible with current US export control regulations, Reuters writes, citing sources. Nvidia will work with Inspur, one of its main distribution partners in China, to launch and distribute the chip, the sources added. It is tentatively named "B20".
• Boeing-owned Wisk plans to begin flying passengers "by the end of the decade." Boeing-owned Wisk Aero expects its unmanned air taxi to begin carrying passengers "by the end of the decade." It is working with the US regulator to obtain approvals, its CEO said on Monday. Industry analysts are skeptical about the timing of certification.
• The US bond market reacted to Biden's exit with a reversal of the “Trump trade” - Reuters. Investors in US government bonds on Monday unwinded some trades that had been made in anticipation of a second presidency by Republican Donald Trump, as US President Joe Biden's withdrawal from the presidential race was seen as an improvement for Democrats.
• Harris is considered a tougher opponent of the oil industry than Biden - Bloomberg. As California attorney general, Kamala Harris sued fossil fuel companies, prosecuted a pipeline company for oil leaks and investigated Exxon Mobil Corp. for misleading the public about climate change.
• Coca-Cola expects continued momentum in the second quarter, despite consumer caution. Investors are hoping Coca-Cola will maintain its momentum.
• Cocoa futures rise as Ghana seeks to curb some supplies - Bloomberg. Ghana's plan to limit some supplies next season has raised fresh concerns about ongoing shortages.
• Reddit makes deals with sports leagues to attract more advertising dollars - Reuters. The agreements, which also cover Major League Baseball, the PGA Tour and the National Association of Stock Auto Racing, could help Reddit cash in on a loyal audience
• Anglo American is cutting its trading division as part of a major restructuring - Bloomberg. The mining giant is cutting its trading operations as part of a restructuring announced after it rejected an offer from rival BHP Group Ltd. earlier this year.
• Alphabet to report double-digit growth in second quarter - Reuters. Google's parent company is expected to report quarterly revenue growth of nearly 14%, its fourth straight quarter of double-digit growth, thanks to robust demand for its artificial intelligence.
• Tesla's margins likely declined in the second quarter; robotaxi, AI in the spotlight - Reuters. Tesla's second-quarter margins hit a more than five-year low, it is likely to report on Tuesday, and its CEO Elon Musk is expected to double down on the company's plans for robotaxis and artificial intelligence products.
• Morgan Stanley's Wilson sees the U.S. small-cap rally losing steam. The recent rally in U.S. small-cap stocks faces technical resistance and lacks fundamentals to continue for a longer period of time, according to the bank.
• Verizon suffered from prepaid subscriber churn after internet subsidies ended. Fewer people upgraded their phones, while the number of its prepaid wireless subscribers fell sharply.
• Wiz will focus on IPO after scrapping Google's $23 billion deal. In May, Wiz raised $1 billion in a funding round valued at $12 billion, bringing its total funding to $1.9 billion.
• Mattel shares rose 15% yesterday.
• Private equity firm L Catterton has made an offer to acquire the toy maker. L Catterton is an investment company represented by luxury giant LVMH
The stock market corrected upward yesterday. Or returned to the bullish trend. In the morning everything is calm. Investors are expecting an avalanche of reports.
Key events that could impact markets on Tuesday:
- US macro data. Report on home sales on the secondary market for June
- Economy: European consumer confidence, US existing home sales, Richmond Fed manufacturing index
- The National Retail Federation will host a webcast to discuss the latest shopping data and consumer spending plans for the upcoming school season.
- Reports: LVMH, Thales, Coca-Cola, General Electric, General Motors, UPS, Tesla, Google - GOOGL, TSLA, V, KO, TXN, DHR, GE, PM, CMCSA, UPS, LMT, CB.