Stock futures inched up Monday as investors' focus shifted to inflation
data following July's payrolls report which came in weaker than expected on Friday.
The market is awaiting Wednesday's CPI print, which could be an important factor in whether or not the Federal Reserve raises rates next month. Economists expect it will show consumer prices up 3.4% from a year earlier, a slight improvement from the 3.5% inflation rate in June.
"The prevailing narrative is that inflation remains damningly high... A benign CPI report and no September rate hike would give this market permission to run faster," Edwards Asset Management said.
Money markets currently price around a 44% chance of a Fed rate hike in September, LSEG data show.
Oil prices were edging higher, with Brent crude futures trading around $84 a barrel, as investors await major updates from the war with Iran.
Iran said it was close to a deal with Oman to open the Strait of Hormuz, though a senior official issued several demands to the U.S., including a troop withdrawal and an end to military action against Iran-aligned militias.
Meanwhile, the second-quarter's earnings season enters its final innings.
Stocks to watch
Berkshire Hathaway said its quarterly profit more than doubled, powered by investment gains and strong results from its industrial and retail businesses. Shares ticked up in premarket trading.
Rocket Lab is set to report earnings after markets close. Shares were up 3% in premarket trading.
Super Micro Computer, Marvell Technology, Applied Materials, Intel: The chip stocks ticked up in premarket trading amid ongoing volatility in the sector.
Watch For:
U.S. Employment Trends Index for July
Today's Top Headlines/Must Reads:
- War Is Helping Chinese EVs Upend the Global Car Market
- In China, 'Moles' Are Leaking Official Secrets for Profit
- Data-Center Backlash Leads to a New Land Rush in the Texas Oil Patch
MARKET WRAPS Forex:
The dollar recovered after reaching a seven-week low Friday following an unexpected decline in nonfarm payrolls.
The euro traded flat, but it could rise above $1.16 if Wednesday's U.S. inflation data are lower than expected, ING said.
Bonds:
Treasury yields remained flat after Friday's nonfarm payrolls data came in well below expectations, dampening prospects of the Fed raising interest rates in September.
Energy:
In early European trading, Brent crude was up 0.2%, while WTI futures rose 0.1%.
Global oil inventory buffers are continuing to erode, said ANZ. Product inventories continue to fall sharply, led by gasoline and middle distillates. Further inventory declines are evident across Asia, the Middle East and Singapore.
Metals:
Gold prices held above the $4,400-a-troy-ounce mark after booking their best weekly performance since January, as investors awaited key U.S. inflation data for more cues on the Fed's policy path.
Gold chart
Comex gold futures were seeking to rise beyond resistance at $4,400 an ounce, RHB Retail Research said. The futures closed Friday with a long bullish candlestick pattern on the daily chart.
Copper
Copper prices held above $14,000 a metric ton on tightening supplies and easing concerns about a September rate hike by the Fed.
Iron ore
Iron ore futures prices across different deliveries were mostly lower in early trade. While China's iron ore supply remains ample, steel demand has been weak as the country's official manufacturing PMI contracted from the preceding month, Galaxy Futures said.
TODAY'S TOP HEADLINES
War Is Helping Chinese EVs Upend the Global Car Market
One group that doesn't want the Iran war to end soon is China's electric-vehicle makers.
They began the year with a glut of EVs on their hands and weak demand at home. The crisis in the Middle East is helping them export their way out of trouble: Chinese carmakers are sending excess supply to overseas markets, where high gasoline prices are prompting more drivers to buy EVs. The market share of traditional carmakers is the big casualty.
U.A.E.'s Adnoc Gas to Invest More Than $8 Billion in Expansion Push
The United Arab Emirates' Adnoc Gas said it would invest over $8 billion to grow its production capacity, just months after the country's departure from the Organization of the Petroleum Exporting Countries. The exit freed Abu Dhabi from the cartel's quota restrictions.
Majority owned by state-run Abu Dhabi National Oil Company, Adnoc Gas is already one of the world's largest producers of natural gas but it is betting on a substantial growth program to meet rising gas demand, fueled by population growth and power hungry data centers.
Apple Tests Chinese Memory Chips as Supply Squeeze Bites
Apple has been testing memory chips from China's CXMT across product lines including iPhones and MacBooks, according to people familiar with the matter, as the U.S. company addresses a memory crunch during the artificial-intelligence boom.
Apple has held early talks with CXMT about supplying components with the goal of using them in some devices sold in China, the people said. Apple hopes to win the White House's blessing to do business with the Chinese company.
Taylor Farms Recalls Products With Jalapeños Implicated in Salmonella Outbreak
Taylor Farms said it was removing certain products including guacamoles and salsas from grocery shelves over concerns of salmonella contamination, weeks after the produce supplier recalled lettuce implicated in a widespread cyclospora outbreak.
The California-based company said Sunday that it was voluntarily pulling the products because they contained jalapeño peppers tied to an earlier recall by Coast Citrus Distributors.
Wall Street's biggest bank just raised its expectations for the stock market
JPMorgan has lifted its year-end target for the S&P 500 to 8,000, citing a strong second-quarter earnings season.
With 87% of the stock index's companies having already reported, results have proved strong across a number of industries, strategists at the investment bank, led by Dubravko Lakos-Bujas, global head of markets strategy, wrote in a note on Monday. This backdrop supported JPMorgan's decision to raise its S&P 500 SPX price target for the end of the year from 7,800 to 8,000.
London Needs Capital to Revive its Struggling Public Markets, LSE's Deputy CEO Says
Better access to capital is key to the London Stock Exchange reestablishing its reputation as a world leader, the exchange's deputy chief executive said.
The LSE's Charlie Walker said a collective effort across regulators, government and U.K. companies is working to revive London's fortunes, but capital is the missing piece.
Private Credit Is Under Growing Strain, Despite Industry's Upbeat Tone
Private credit is showing increasing signs of stress, despite comments to the contrary from some of the largest fund managers that are trying to put a year of turmoil behind them.
Recent quarterly reports from funds overseen by the industry's big players showed that loan health and investor returns are worsening, according to an analysis by The Wall Street Journal.
Israel Rejects Next Phase of Trump's Gaza Peace Plan
Israeli Prime Minister Benjamin Netanyahu rejected President Trump's plan to establish permanent peace in Gaza, a rare public break with the U.S. leader, who just weeks ago hailed "a historic agreement" to disarm Hamas.
The plan calls for the militant group to lay down arms in tandem with the gradual withdrawal of Israeli troops from the enclave, which the Israeli leader said Sunday couldn't happen until Hamas was fully disarmed.
Trump Thought Opening the Strait of Hormuz Was Imminent. Iran Had Other Plans.
WASHINGTON-For weeks, President Trump had been laying the groundwork to declare victory in the Iran war should Tehran fully reopen the Strait of Hormuz, even floating the idea privately to senior aides that he's willing to walk away without a nuclear deal, U.S. officials said.
But that scaled-back objective became more difficult when Iran insisted Saturday on its highest price yet for permitting the free flow of traffic in the waterway, seeking billions of dollars in U.S. payments, the removal of American troops from the region and an end of the U.S. naval blockade, among other things.
In China, 'Moles' Are Leaking Official Secrets for Profit
Secrets from Chinese leader Xi Jinping's disciplinary purges keep surfacing online, defying a crackdown that has ensnared millions of people-and highlighting how deeply embedded graft and disloyalty remain within the Communist Party.
With the party detaining tens of thousands of officials each year, an underground market for corruption gossip has emerged on Chinese social media, where shadowy users drop hints on who's getting purged next-in return for fees and clicks, state media said.
The Republican Party Is Losing Its Edge With Voters on the Economy
Mitchell Brown, a Republican pollster, has noticed something new in the focus groups he runs with voters in battleground states: "They know exactly, to the dollar, the amount of their power bill," he said. The same, he says, happens with health costs, or the price of beef.
To Brown, it is a sign that views of the economy pose a clear danger for his party in this year's midterms, a concern echoed by other Republican strategists. With voters' negative impressions now hardening, some Republican and independent analysts say President Trump and his GOP allies have little time to regain a key asset: their image as the party better suited to handle the economy.
Write to priscila.barrera@wsj.com
TODAY IN CANADA Earnings:
AGT Food and Ingredients Inc 2Q Altius Minerals Corp. 2Q Anaergia Inc. 2Q Barrick Mining Corp. 2Q Cargojet Inc. 2Q DATA Commun Mgmt Corp. 2Q Electrovaya Inc. 3Q K92 Mining Inc. 2Q Keel Infrastructure Corp. 2Q Medexus Pharms Inc. 1Q Silvercorp Metals Inc. 1Q Ur-Energy Inc. 2Q
Economic Indicators $(ET)$:
Nothing major scheduled. Stocks to Watch:
DRI Healthcare Trust 2Q Net Income $6.02M; 2Q Adj EPS $0.56; 2Q Adj EBITDA $42.6M; 2Q Adj EBITDA Margin 92%; Reports 2Q Adj EPS of $0.56; 2Q EPS 11c; 2Q Adj EPS 56c
Element Fleet Management Submits Proposal To Acquire FleetPartners Group
FleetPartners Rejects A$3.60/Share Cash Offer From SG Fleet; Says SG Fleet Offer Undervalues Company, Not in Best Interest of Shareholders; Gets Takeover Offer From Element Fleet Management; Says Element Fleet Management Offer Worth A$3.80/Share in Cash; Element Proposes to Raise Cash Offer to A$4.00/Share Should Company Into Process Deed; Process Deed Would Need to Include 3-Week Period of Exclusivity; Considering, Evaluating Element Proposal; Not Precluded From Engaging Other Parties, Including SG Fleet
Lucara Diamond 2Q Net Income $15.6M; 2Q Operating Expenses $11.9M; 2Q EPS $0.01; 2Q Revenue $41M; Reports 2Q Revenue of $41 Million
Northview Residential REIT 2Q Rev C$69.2M
Nova Leap 2Q Adj EBITDA $0.95M; 2Q Net Income $0.65M; 2Q Operating Income $0.75M; 2Q Revenue $9.39M; Reports 2Q Revenue of $9.39 Million
Taiga Building 2Q EPS C$0.15; 2Q Sales C$426.6M
Expected Major Events for Monday 04:30/JPN: Jul Corporate Insolvencies
05:00/JPN: Jul Economy Watchers Survey
14:00/US: Jul Employment Trends Index
23:01/UK: Jul BRC-KPMG Retail Sales Monitor
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Expected Earnings for Monday 4D Molecular Therapeutics Inc (FDMT) is expected to report $-1.03 for 2Q.
Accendra Health Inc (ACH) is expected to report $-0.30 for 2Q.
Airsculpt Technologies Inc (AIRS) is expected to report $0.01 for 2Q.
Americas Gold & Silver Corp (USA.T,USAS) is expected to report for 2Q.
Apogee Therapeutics Inc (APGE) is expected to report $-1.07 for 2Q.
ArriVent BioPharma Inc (AVBP) is expected to report $-0.99 for 2Q.
Axsome Therapeutics Inc $(AXSM)$ is expected to report $-0.89 for 2Q.
Barrick Mining Corp (ABX.T,B) is expected to report for 2Q.
Biohaven Ltd $(BHVN)$ is expected to report $-0.76 for 2Q.
Boundless Bio Inc (BOLD) is expected to report for 2Q.
CEVA Inc $(CEVA)$ is expected to report $-0.12 for 2Q.
California Resources Corp $(CRC)$ is expected to report $1.37 for 2Q.
Ceco Environmental Corp $(CECO)$ is expected to report $0.20 for 2Q.
Conduent Inc (CNDT) is expected to report $-0.23 for 2Q.
Dynacor Group Inc (DNG.T) is expected to report for 2Q.
GCM Grosvenor Inc $(GCMG)$ is expected to report $0.15 for 2Q.
Heron Therapeutics Inc $(HRTX)$ is expected to report $-0.01 for 2Q.
International Seaways Inc (INSW) is expected to report $5.45 for 2Q.
K92 Mining Inc (KNT.T) is expected to report for 2Q.
LB Foster Co $(FSTR)$ is expected to report $0.41 for 2Q.
Lincoln Educational Services Corp $(LINC)$ is expected to report $0.00 for 2Q.
Medical Properties Trust Inc (MPT) is expected to report $0.00 for 2Q.
Motorcar Parts of America Inc (MPAA) is expected to report $0.21 for 1Q.
N-able Inc $(NABL)$ is expected to report $0.02 for 2Q.
OPAL Fuels Inc (OPAL) is expected to report $-0.03 for 2Q.
Outdoor Holding Co $(POWW)$ is expected to report $-0.01 for 1Q.
PowerFleet Inc $(AIOT)$ is expected to report $-0.02 for 1Q.
Protara Therapeutics Inc $(TARA)$ is expected to report $-0.33 for 2Q.
Quanterix Corp (QTRX) is expected to report $-0.47 for 2Q.
Sonida Senior Living Corp (SNDA) is expected to report $-0.48 for 2Q.
Surgery Partners Inc (SGRY) is expected to report $-0.08 for 2Q.
TPG Mortgage Investment Trust Inc $(MITT)$ is expected to report $0.37 for 2Q.
Target Hospitality Corp (TH) is expected to report $-0.10 for 2Q.
Telos Corp $(TLS)$ is expected to report $-0.02 for 2Q.
Theriva Biologics Inc (TOVX) is expected to report for 2Q.
Tonix Pharmaceuticals Holding Corp $(TNXP)$ is expected to report for 2Q.
Veru Inc $(VERU)$ is expected to report for 3Q.
Village Farms International Inc (VFF,VFF-T) is expected to report for 2Q.
enCore Energy Corp (EU.V) is expected to report for 2Q.
inTEST Corp $(INTT)$ is expected to report $0.01 for 2Q.
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ANALYST RATINGS ACTIONS Airbnb Raised to Outperform From Neutral by Wedbush
Akebia Therapeutics Cut to Market Perform From Outperform by Leerink Partners
Allstate Cut to Underweight From Equal-Weight by Wells Fargo
Allstate Raised to Buy From Hold by Freedom Broker
Apple Hospitality REIT Raised to Buy From Neutral by Compass Point
Arteris Raised to Buy From Hold by Jefferies
Avita Medical Raised to Buy From Neutral by BTIG
Celsius Holdings Cut to Hold From Buy by Maxim Group
Celsius Holdings Cut to Market Perform From Outperform by Bernstein
Commerce.com Cut to Hold From Buy by Canaccord Genuity
CVRx Cut to Hold From Buy by Lake Street
DaVita Raised to Buy From Hold by TD Cowen
DoubleVerify Cut to Hold From Buy by Canaccord Genuity
DoubleVerify Cut to Hold From Buy by Needham
DoubleVerify Cut to Hold From Buy by Truist Securities
DoubleVerify Cut to Market Perform From Market Outperform by Citizens
DoubleVerify Cut to Market Perform From Outperform by Raymond James
DoubleVerify Cut to Sector Perform From Outperform by RBC Capital
DoubleVerify Cut to Sector Perform From Sector Outperform by Scotiabank
DoubleVerify Raised to Equal-Weight From Underweight by Wells Fargo
Dropbox Raised to Market Perform From Underperform by William Blair
eBay Raised to Buy From Hold by Argus Research
Etsy Raised to Overweight From Neutral by JP Morgan
Expensify Raised to Market Outperform From Market Perform by Citizens
Fox Corp. Cut to Neutral From Buy by Seaport Global
Fox Corp. Cut to Neutral From Buy by Seaport Global
Gap Inc Cut to Equal-Weight From Overweight by Wells Fargo
Ginkgo Bioworks Holdings Cut to Hold From Buy by TD Cowen
Group 1 Auto Cut to Equal-Weight From Overweight by Morgan Stanley
Halozyme Therapeutics Raised to Outperform From Market Perform by Leerink Partners
HubSpot Cut to Market Perform From Outperform by BMO Capital
Intellia Therapeutics Raised to Outperform From In-Line by Evercore ISI Group
JetBlue Cut to Sell From Neutral by Citigroup
Onterris Cut to Equal-Weight From Overweight by Barclays
Papa John's Cut to Equal-Weight From Overweight by Stephens & Co.
Papa John's Cut to Hold From Buy by Benchmark
Procter & Gamble Cut to Hold From Buy by Argus Research
PubMatic Raised to Outperform From Market Perform by Raymond James
PubMatic Raised to Sector Outperform From Sector Perform by Scotiabank
Quanta Services Raised to Overweight From Sector Weight by Keybanc
QuinStreet Raised to Buy From Hold by Lake Street
REGENXBIO Cut to Equal-Weight From Overweight by Barclays
Replimune Group Raised to Outperform From Neutral by Wedbush
Roku Cut to Neutral From Buy by Guggenheim
Roku Cut to Neutral From Buy by Seaport Global
RXO Raised to Market Outperform From Market Perform by Citizens
SpaceX Raised to Buy From Hold by Argus Research
Trade Desk Cut to Hold From Buy by Truist Securities
Trade Desk Cut to In-Line From Outperform by Evercore ISI Group
Trade Desk Cut to Neutral From Buy by Guggenheim
Trade Desk Cut to Neutral From Positive by Susquehanna
Trade Desk Cut to Sell From Neutral by Citigroup
Trade Desk Cut to Underperform From Market Perform by Raymond James
Unity Software Raised to Buy From Hold by Benchmark
Unity Software Raised to Buy From Hold by Deutsche Bank
Unity Software Raised to Buy From Hold by HSBC
Unity Software Raised to Buy From Neutral by B of A Securities
Vertiv Holdings Raised to Buy From Hold by GLJ Research
XPEL Raised to Buy From Hold by Freedom Broker
Xponential Fitness Cut to Neutral From Buy by Guggenheim
This article is a text version of a Wall Street Journal newsletter published earlier today.
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