Microsoft and job openings to hit pre-Fed vigil
A look at the day ahead in U.S. and global markets from Mike Dolan
To the extent that worries about pricey tech stocks and rising AI capex spending were partly behind last week's market shakeout, Microsoft's quarterly update should prove a key moment later on Tuesday, just as the Federal Reserve's latest policy meeting gets under way.
Markets run the gauntlet of three major central bank decisions this week, the July U.S. employment report on Friday and four U.S. megacap earnings reports.
With U.S. election uncertainty as the backdrop, trepidation ahead of the week's events understandably held most major macro prices in check. U.S. stock futures ESc1, NQcv1 were marginally higher ahead of Tuesday's bell, while Treasury yields US10YT=RR and the dollar .DXY nudged up too.
Caution ahead of the Fed's policy decision on Wednesday - which is preceded by a possible tightening jolt from the Bank of Japan earlier that day - may muffle the initial reaction to Microsoft's MSFT.O report.
But a key question for investors will be whether growth in Microsoft's Azure cloud-computing business has picked up enough to justify the billions of dollars being spent on artificial intelligence infrastructure. Its stock was down a touch, out of hours on Tuesday.
Meta META.O follows with its earnings release on Wednesday and Apple AAPL.O and Amazon AMZN.O report the day after.
For the next 36 hours or so, however, it will be hard to disentangle the issues surrounding the so-called Magnificent Seven megacaps from the Fed meeting - where signals on a first interest rate cut as soon as September are expected.
With disinflation resuming, Fed attention is shifting to the other side of its twin mandate and what appears to be a significant cooling of the labor market.
Friday's national payrolls report for July comes too late to influence Fed thinking this week. But policymakers will today get a glimpse of just how much the jobs market was loosening last month with the latest JOLTS job openings numbers.
Treasury markets remained calm - helped by Fed easing hopes, a cut in government borrowing estimates for the coming quarter and falling crude oil prices CLc1.
The U.S. Treasury said on Monday it expects to borrow $740 billion in the third quarter, $106 billion lower than the April estimate and mainly due to lower redemptions in the Federal Reserve System Open Market Account and a higher cash balance at the beginning of the quarter.
The government will offer more details on the refunding schedule on Wednesday morning.
Even though the election fogs the windscreen before then, analysts are already crunching the Treasury numbers to see what it may mean for the debt ceiling, which is due to be reinstated on Jan. 2 unless Congress suspends it again. As it stands, the estimated cash balance for December makes it likely government could last until July or August before running out of cash.
With OPEC+ oil ministers due to meet again on Thursday and political tensions in OPEC member Venezuela rising after a disputed weekend election result there, crude oil prices ebbed to their lowest in six weeks and clocked their deepest year-on-year loss since Feb. 1 - almost 5%.
Elsewhere, the yen JPY= weakened into the BOJ meeting and sterling GBP= was steady ahead of the Bank of England's likely tight decision on a first UK rate cut on Thursday.
The euro EUR= rose on mixed bag of economic numbers. Even though Germany recorded an unexpected contraction of its economy in the second quarter, and some German states exceeded inflation expectations for July, the euro zone economy as a whole actually beat forecasts as GDP in the bloc climbed 0.3% in Q2.
And it was a heavy earnings diary in Europe too.
Standard Chartered STAN.L jumped almost 6% after the UK-based bank announced a $1.5 billion share buyback, its biggest ever, and lifted its income outlook for 2024.
UK asset manager St James's Place SJP.L soared more than 20% after outlining a six-year plan to slash costs and revamp its services, putting its stock on course for their biggest one-day rise since 2008.
Key developments that should provide more direction to U.S. markets later on Tuesday: * US June JOLTS job openings report, July consumer confidence, Dallas Fed July service sector survey, May house prices
* Federal Reserve's Federal Open Market Committee starts two-day policy meeting, decision Wednesday; Bank of Japan also holds Monetary Policy Meeting, decision Wednesday
* US corporate earnings: Microsoft, Advanced Micro Devices, Pfizer, Merck, Corning, Proctor & Gamble, Starbucks, Caesars Entertainment, Arista Networks, Archer-Daniels-Midland, Sysco, Stryker, Skyworks Solutions, S&P Global, Stanley Black & Decker, American Tower, Illinois Took Works, Mondelez, Essex Property, First Solar, FirstEnergy, Howmet, Xylem, Incyte, Zebra, Match, Live Nation, Ecolab, Gartner etc
Fed rates and inflation https://tmsnrt.rs/3U8HdD2
No sign of US credit crunch https://reut.rs/3SwPTnp
US continuing jobless claims and JOLTS hires https://reut.rs/4bA38dy
Generative AI boom drives up market value of tech giants https://reut.rs/46rcrf8
Biden proposes 18-year term limit for US Supreme Court justices https://reut.rs/3Ss6B7E
By Mike Dolan; Editing by Kevin Liffey;
mike.dolan@thomsonreuters.com
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إخلاء المسؤولية: تتيح كيانات XM Group خدمة تنفيذية فقط والدخول إلى منصة تداولنا عبر الإنترنت، مما يسمح للشخص بمشاهدة و/أو استخدام المحتوى المتاح على موقع الويب أو عن طريقه، وهذا المحتوى لا يراد به التغيير أو التوسع عن ذلك. يخضع هذا الدخول والاستخدام دائماً لما يلي: (1) الشروط والأحكام؛ (2) تحذيرات المخاطر؛ (3) إخلاء المسؤولية الكامل. لذلك يُقدم هذا المحتوى على أنه ليس أكثر من معلومات عامة. تحديداً، يرجى الانتباه إلى أن المحتوى المتاح على منصة تداولنا عبر الإنترنت ليس طلباً أو عرضاً لدخول أي معاملات في الأسواق المالية. التداول في أي سوق مالي به مخاطرة عالية برأس مالك.
جميع المواد المنشورة على منصة تداولنا مخصصة للأغراض التعليمية/المعلوماتية فقط ولا تحتوي - ولا ينبغي اعتبار أنها تحتوي - على نصائح أو توصيات مالية أو ضريبية أو تجارية، أو سجلاً لأسعار تداولنا، أو عرضاً أو طلباً لأي معاملة في أي صكوك مالية أو عروض ترويجية مالية لا داعي لها.
أي محتوى تابع للغير بالإضافة إلى المحتوى الذي أعدته XM، مثل الآراء، والأخبار، والأبحاث، والتحليلات والأسعار وغيرها من المعلومات أو روابط مواقع تابعة للغير وواردة في هذا الموقع تُقدم لك "كما هي"، كتعليق عام على السوق ولا تعتبر نصيحة استثمارية. يجب ألا يُفسر أي محتوى على أنه بحث استثماري، وأن تلاحظ وتقبل أن المحتوى غير مُعدٍ وفقاً للمتطلبات القانونية المصممة لتعزيز استقلالية البحث الاستثماري، وبالتالي، فهو بمثابة تواصل تسويقي بموجب القوانين واللوائح ذات الصلة. فضلاً تأكد من أنك قد قرأت وفهمت الإخطار بالبحوث الاستثمارية غير المستقلة والتحذير من مخاطر المعلومات السابقة، والذي يمكنك الاطلاع عليه هنا.
