MARKET WRAPS
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EU industrial production; no major corporate trading updates expected
Opening Call:
European stock futures pointed to a lower open Monday as traders bet on the prospect of a Trump victory in the U.S. presidential election following an assassination attempt. Asian stock benchmarks were largely lower after data showed China's GDP growth slowed for the second quarter; the dollar strengthened; oil futures edged higher and gold fell.
Equities:
European stock futures fell early Monday as investors reacted to an assassination attempt on former U.S. President Donald Trump.
The event so far hasn't sparked a flight to typical safe-haven investments such as Treasurys and gold. It could instead see investors focus on perceptions around how the Saturday shooting at a Pennsylvania campaign rally will affect the race between Trump and President Joe Biden.
While betting markets saw increased wagers on a Trump victory, overall moves were in line with what was seen following Biden's poor debate performance on June 27.
Talk that the aftermath of Saturday's horrific events will turbocharge the Trump trade should be met with skepticism, said Terry Haines, founder of Pangaea Policy.
"Investors now should beware the Trump trade, which already was way over its skis and now probably turbocharges. We say 'beware' because the Trump trade is based in betting markets that now will swing even more to Trump, yet have no relationship to political reality," Haines said. "Today's rush of sentiment likely gets replaced quickly by a much less-changed political reality."
Forex:
Safe-haven currencies such as USD and JPY may garner support early this week from the attempted assassination of former President Donald Trump, Commonwealth Bank of Australia said.
The experience from the attempted assassination of President Reagan in March 1981 suggests a short-lived boost to Trump's popularity, CBA noted.
This event is a shocker for the U.S. presidential race, said Lloyd Chan, senior currency analyst at MUFG Bank. There's potential risk-off mood in markets, which could result in USD extending early gains throughout the day, Chan added.
Bonds:
Nascent discussions around the possibility of a more center-right government in France could help the French OAT-German Bund yield spread tighten, said Bank of America rates strategists.
Spread tightening could be fanned by expectations that a more center-right government would avoid fiscal slippages, they said.
"This is the scenario where we saw [10-year] OAT-Bunds at 60 basis points," they added. Still, risk-reward for the spread tightener isn't favorable at the current 65 basis-point yield-spread level, they said.
Cash Treasurys didn't trade in Asia due to a holiday in Japan.
Energy:
Oil futures edged higher early Monday. Brent crude oil had fallen sharply after news that a framework for a ceasefire between Israel and Hamas had been agreed Friday, ANZ said. "This could see oil's geopolitical risk premium wound back relatively quickly," ANZ said.
Supply disruption risks could provide some support. Recent wildfires around Canada's oil sands capital of Port McMurry is affecting some production, ANZ added.
Metals:
Gold fell slightly early Monday, likely on profit-taking. Commodity trading advisers appear to be unwinding a part of their long positions while some money managers could be taking profits near all-time highs, said Ryan McKay, senior commodity strategist at TD Securities.
However, the recently below-expected inflation report and softer employment data in the U.S. have bolstered expectations of a September start to the Fed rate-cut cycle, McKay said.
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Copper prices declined. Rising inventories have continued to weigh on market sentiment, ANZ said. Copper stockpiles in London Metal Exchange warehouses rose by 7.5% last week and have nearly doubled since mid-May to reach their highest level since October 2021, ANZ added.
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Iron ore prices advanced amid expectations of more property stimulus measures to be unveiled at China's Third Plenum meeting.
Moody's Analytics reckons that "addressing the property market meltdown" should be on the meeting agenda. Although support has begun trickling through, "more needs to be done."
TODAY'S TOP HEADLINES
China's Economy Slowed More Than Expected in Second Quarter
China's economy grew 4.7% from a year earlier in the second quarter of the year, missing market expectations and heaping pressure on the country's leadership to boost confidence this week as they gather for a key policy summit.
The result showed that growth slowed from the 5.3% year-over-year expansion recorded in the first three months of the year, and missed the 5.0% figure expected by economists polled by The Wall Street Journal.
Bitcoin surges and passes $62,000 level after shooting attack on Trump
Bitcoin, which trades around the clock, surged after former President Donald Trump was shot, potentially a reaction both to the perceived increased likelihood the Republican will win November's presidential election as well as to a more unstable political environment.
Bitcoin BTCUSD rose more than 4%, toping $60,000 for the first time since mid-June and hitting $62,518 by 11 p.m. Sunday. Other leading cryptocurrencies including Ethereum ETHUSD and Solana SOLUSD also rallied.
Trump shooting offers test for stock market as investors weigh his election odds now
A dark day in U.S. history offered a test for financial-market participants Sunday night as investors reacted to an apparent assassination attempt on former President Donald Trump.
The event so far wasn't sparking a flight to typical safe-haven investments such as Treasurys and gold. It could instead see investors focus on perceptions around how the Saturday shooting at a Pennsylvania campaign rally will affect the race between Trump and President Joe Biden. The initial market reaction, however, was subdued, with U.S. stock index futures trading flat to slightly higher Sunday night.
Battle Over Shareholder Pacts Strains Delaware's Business Courts
Sweeping changes to Delaware corporate law could give more power to influential shareholders, letting them make more deals on behalf of the company without board oversight.
The proposed bill expands the breadth and power of stockholder agreements, which are often used by activist investors to gain board seats and by founders to coordinate control.
Gold Can Keep Rising. Bet on Bling in the Face of Geopolitical Risk, Rate Cuts.
Gold spot prices are above $2,400 an ounce, and are flirting again with a record high of about $2,435 set in late May. Can the yellow metal continue to glitter? Some experts think gold should keep climbing as political uncertainty in the U.S. and abroad remains elevated. The increased likelihood of interest-rate cuts from the Federal Reserve later this year should also weaken the dollar and boost gold.
Gold prices are up more than 17% so far this year, and have gained nearly 4% this month alone.
Welcome to the Everything Rally. How Stock Investors Can Play It.
Megacap techs are no longer the only game in town. Small-caps are finding new life and so are beaten-up sectors like real estate, signaling that the stock market rally may finally be broadening out.
On Thursday, even as the Nasdaq Composite and S&P 500 were dragged lower by losses in big tech, the Invesco S&P 500 Equal Weight exchange-traded fund rose more than 1%. Nearly 400 companies in the S&P 500 finished the day with gains. What's more, the small-cap laden Russell 2000 index surged more than 3%.
Israel Seeks Proof of Whether Strike Killed Hamas Military Chief
TEL AVIV-Israel's military was assessing on Sunday whether it successfully killed Hamas's top commander Mohammed Deif in an airstrike in southern Gaza a day earlier, military officials said.
An Israeli official said there is reason to believe the strike achieved its aim, but it could be days or weeks until Israeli authorities can determine with certainty whether Deif was killed.
Google Near $23 Billion Deal for Cybersecurity Startup Wiz
Google parent Alphabet is in advanced talks to acquire cybersecurity startup Wiz for roughly $23 billion, according to people familiar with the matter, in what would be its largest acquisition ever.
A deal could come together soon, assuming the talks don't fall apart, the people said.
Apple, Samsung Phone Shipments Rose in Second Quarter
Global smartphone shipments by Apple and Samsung Electronics rose in the second quarter, according to a closely watched industry tracker, but their shares of the overall market dropped amid competition from Chinese rivals.
Quarterly shipments of Apple's iPhones rose 1.5% from a year earlier to 45.2 million units, while those of the world's largest smartphone seller, Samsung, rose 0.7% to 53.9 million units, preliminary data from research firm International Data Corp. showed Monday.
Amazon Hits Prime Time for Earnings Expansion
Amazon will be selling an awful lot of goods this week. How profitably it can sell other stuff is the real $2 trillion question.
This year's Prime Day-Amazon's made-up holiday-starts July 16 but comes as the tech giant's investors already have a big cause to celebrate. Revived sales growth and an even more robust improvement to the bottom line have driven steady gains over the past year and a half, now pushing its stock price to a record high and the company's market capitalization past the $2 trillion mark.
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Expected Major Events for Monday
04:30/NED: May International trade
05:00/FIN: Jun CPI
06:30/SWI: Jun Import Price Index
06:30/SWI: Jun PPI
06:30/HUN: May Construction
07:00/SVK: Jun Core & net inflation development
07:00/SVK: Jun CPI
08:00/CZE: May Monthly Balance of Payments
08:00/POL: May Merchandise trade
08:00/POL: Jun CPI
08:00/BUL: Jun CPI
09:00/EU: May Industrial Production
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07-15-24 0021ET
