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Market Rises Amid Trump Attack and Key Earnings Week

Fernanda T
Latest News
July 15 2024 6:36AM

U.S. index futures are rising in pre-market trading on Monday as investors react to the attempted assassination of former President Donald Trump and prepare for a crucial week of important corporate earnings releases.

At 5:57 AM, Dow Jones futures (DOWI:DJI) rose 191 points, or 0.47%. S&P 500 futures gained 0.42%, and Nasdaq-100 futures advanced 0.50%. The 10-year Treasury yield stood at 4.217%.

In the commodities market, West Texas Intermediate crude for August rose 0.11%, to $82.30 per barrel. Brent crude for September rose 0.09%, near $85.11 per barrel. The most traded iron ore contract on the Dalian Commodity Exchange rose 1.03%, to $114.83 per metric ton.

On the U.S. economic agenda for Monday, the Empire State Manufacturing Index for July will be released at 8:30 AM by the Federal Reserve Bank of New York.

Asia-Pacific markets closed mixed. Hong Kong’s Hang Seng Index decreased 1.52%, while Australia’s S&P/ASX 200 Index rose 0.73%. The Shanghai Composite Index advanced 0.09% and the CSI 300 Index of mainland China increased 0.11%. South Korea’s KOSPI Index rose 0.14%, while the Kosdaq gained 0.3%. Japanese markets are closed due to a holiday.

China’s GDP in the second quarter grew only 4.7%, below expectations of 5.1%. Retail sales also disappointed, increasing only 2% compared to the expected 3.3%. Additionally, Chinese leaders are preparing to discuss issues like government debt and advanced manufacturing at the Third Plenary Session.

European markets are down at the start of the week in response to the impact of the assassination attempt on Donald Trump during a rally, with sectors like utilities and basic resources leading the losses. German retail sales data will be released today. Among individual stocks, Burberry (LSE:BRBY) and Swatch Group shares suffered significant drops due to weak financial results and dividend cuts, while investors await the latest earnings from Associated British Foods (LSE:ABF).

A grim event in U.S. history, an attack on Donald Trump, did not generate the expected investor move to safe havens like gold or Treasury bonds.

Overall, the market remained relatively stable, indicating a view that despite the severity of the event, it should not drastically impact the market in the short term. Bets on a Trump victory increased, though the market had already shown a positive trend towards him since March, reflecting more a desire for a clear electoral outcome than specific policies. Additionally, interest in Bitcoin (COIN:BTCUSD) increased, seen as a reaction to Trump’s strengthening odds.

Meanwhile, U.S. Treasury bonds, typically seen as safe in times of uncertainty, did not show the usual pattern of increased demand, suggesting a shift in the perception of political risk.

On Sunday, from the White House, President Joe Biden condemned political violence and called for national unity. Simultaneously, Trump announced that his next speech at the Republican National Convention would focus on national unity, diverging from criticism of Biden’s policies.

After a substantial drop on Thursday, U.S. stocks rebounded on Friday, with the Dow Jones and the S&P 500 hitting new intraday records. The Dow Jones advanced 0.62% to 40,000.90 points, the S&P 500 rose 0.55% to 5.615,35 points, and the Nasdaq increased 0.63% to 18,398.45 points.

The recovery was driven by bargain hunting and optimism about interest rates, despite a larger-than-expected increase in producer prices. The U.S. Department of Labor reported that the Producer Price Index (PPI) rose 0.2% in June, exceeding the expectation of 0.1%. The annual growth rate of the PPI accelerated to 2.6%, above May’s 2.4%.

On the earnings front, Goldman Sachs (NYSE:GS), BlackRock (NYSE:BLK), and Guaranty Bank & Trust (NYSE:GNTY) are set to report before the market opens.

After the close, numbers from First Bank (NYSE:FBK), CrossFirst Bankshares (NASDAQ:CFB), and ServisFirst Bancshares (NYSE:SFBS) will be awaited.