MARKET WRAPS

Watch For:

U.S. Factory Orders for June; Canada Manufacturing PMI for July.

Opening Call:

Stock futures edged higher Tuesday as investors awaited more corporate earnings reports to assess the business climate.

A strong spate of corporate results has helped bolster optimism that stocks can continue to grind higher following an already strong rally this year. Investors say continued support from central banks and economic data that still shows growth will further support equities.

"It has been a pretty strong earnings season and that justifies the medium-term positive view that we have on stocks," said Justin Onuekwusi, head of retail multiasset funds at Legal & General Investment Management. "Earnings typically always beat the average analyst estimate, but for the second quarter in a row, they are coming in above the highest estimates, which is pretty unprecedented."

Eli Lilly, KKR, ConocoPhillips and Marriott International are among the companies slated to report before the market opens. Lyft, Activision Blizzard and Amgen will post results after markets close.

Investors are also monitoring a number of factors that could add volatility to markets and limit the pace of the rally in broader markets. An increase in Delta-variant Covid-19 cases has raised concerns about the global economic recovery stalling, and a recent regulatory clampdown in China caught some investors by surprise last month.

Durable-goods orders figures are due at 8:30 a.m. Eastern.

Overseas, the pan-continental Stoxx Europe 600 added 0.2%.

Technology stocks in China and Hong Kong had another turbulent session after a state-owned newspaper criticized online gaming as "opium for the mind," stoking fears of further tough action from Beijing.

Shares in China's Tencent Holdings, NetEase and Bilibili all plunged, before regaining some ground after the article disappeared from the paper's website.

Shares in Tencent, which said Tuesday that it would introduce stricter curbs on younger users' gaming time, stood 6.1% lower in Hong Kong, while the city's Hang Seng Tech Index declined 1.5%.

Hong Kong's broader Hang Seng Index drifted 0.2% lower, while Japan's Nikkei 225 fell 0.5%, and Australia's S&P / ASX 200 dropped 0.2%.

"Sentiment has been hit by this commentary suggesting that online gaming might be an area China will target in the future," said Edward Park, chief investment officer at U.K. investment firm Brooks Macdonald. "It means this risk won't go away. It is hard for investors to trade that risk," he added.

Forex:

The view that the yield advantage of U.S. assets over euro-area assets should cause the euro to weaken versus the dollar isn't justified, Commerzbank said.

"If it were true, the euro would have to depreciate steadily against the dollar," Commerzbank currency analyst Ulrich Leuchtmann said.

Long-term real inflation-adjusted Treasury and German Bund yields haven't been at comparable levels since 2012, he said.

The risk of significant euro appreciation is higher than the risk of significant depreciation as EUR/USD trades well below long-term equilibrium levels, he said.

The pound should rise in tandem with U.K. bond yields if the Bank of England cements market expectations for an interest rate rise next year in a policy decision Thursday, Bank of America said.

"The rates markets appear well placed in expecting the first hike in May 2022 (+15 basis points), consistent with our own projections," BofA analysts said. "For GBP, this sets the bar for market expectations, and we think the burden of proof is whether the BOE validates market pricing for the removal of policy accommodation in the coming year."

If the BOE can achieve this while sounding "hawkish," the pound should benefit from higher nominal and inflation-adjusted real bond yields, the analysts said.

Bonds:

In bond markets, the yield on the 10-year Treasury note ticked up to 1.189% from 1.173% Monday, its lowest closing level since February.

Commodities

Oil prices swung higher. "The oil market continues to alternate between concerns about tight supply on the one hand and about looming demand outages on the other," said Commerzbank's Barbara Lambrecht.

Despite swinging over the last week, crude has remained in a relatively tight range in recent sessions, with Brent only 0.2% lower than it was this time a week ago.

While worries over fresh Delta-variant-driven restrictions and the health of the Chinese economic recovery have worried investors in recent days, DNB Markets's Helge Andre Martinsen pointed out that Bloomberg's survey of OPEC production shows compliance with cuts at a record level for July.

LME three-month copper futures edged up 0.2% to $9,638 a metric ton after falling for the third day in a row Monday--despite the fact that labor disputes are still ongoing at one of the world's biggest mines, Chile's Escondida.

Concerns about economic growth and the rise of the Delta variant of the coronavirus in Asia have dragged down copper in recent days, said Marex Spectron's Anna Stablum.

Gold prices in London were down, with price moves having been calm in recent days. While a weaker dollar boosted gold last week, that move seems to have paused for now.

TODAY'S TOP HEADLINES

Jeep, Dodge Maker Posts Strong Results Amid Higher Demand and Prices

The maker of Jeep and Dodge reported strong first-half earnings and raised its profitability goal for the year, boosted by a rise in demand and pricing.

Stellantis NV also warned that increases in raw-material prices were likely to get worse in the second half and a global shortage of chips is likely to continue to hit production.

Read More ->

Beijing Shuns Ericsson, Nokia as the West Curbs Huawei

The U.S. and many of its allies have restricted the use of 5G cellular equipment made by China's Huawei Technologies Co. Now Beijing is doing the same to Huawei's Western rivals.

China Mobile Ltd., a government-owned wireless carrier that is the world's biggest by subscribers, awarded in July 5.4% of its latest 5G-equipment tenders to non-Chinese suppliers, down from 11% in its previous round in 2020.

Read More ->

Tencent Plummets as China Calls Online Gaming 'Opium for the Mind'

Shares of Tencent Holdings Ltd. and rivals plummeted Tuesday after a state-owned Chinese newspaper criticized online gaming as "opium for the mind," fueling investor concerns that the companies' popular games could be swept up into a broader regulatory crackdown.

Hours later, however, the story was no longer accessible on the paper's website, and the stocks recovered some lost ground. Meanwhile, Tencent said it would introduce stricter curbs on younger users.

Read More ->

China Takes Aim at Auto Chip Dealers With Global Supplies Low

China's top market watchdog said it is investigating auto chip dealers that it suspects are driving up prices during the global chip shortage.

On Tuesday, the State Administration for Market Regulation said it would enhance market scrutiny and crack down on illegal practices like hoarding, price gouging and collusion. The regulator didn't name any companies that were being investigated.

Read More ->

Federal Labor Official Recommends Alabama Amazon Workers Hold New Vote, Union Says

A National Labor Relations Board official recommended nullifying the results of a closely watched vote in which Amazon.com Inc. warehouse workers in Alabama had rejected a plan to join a union, according to the labor group involved in the case.

The recommendation by the NLRB hearing officer is a critical step in a process that could lead to a new vote to supplant the results of the one held in April. The findings will be reviewed by a regional NLRB director overseeing the case, who could make a final decision in a matter of weeks.

Read More ->

BP Raises Dividend, Launches $1.4 Bln Share Buyback

BP PLC said Tuesday that it increased the dividend for its second quarter and launched a $1.4 billion share buyback.

The British oil-and-gas major declared a quarterly dividend of 5.46 cents a share, up from 5.25 cents for the first quarter. The $1.4 billion buyback is planned to be executed before the release of third-quarter results, BP said.

Read More ->

Sanofi Snaps Up mRNA Specialist for $3.2 Billion Amid Vaccine Success

Sanofi SA agreed to pay $3.2 billion to acquire mRNA specialist Translate Bio, a big vote of confidence that the new technology underpinning two successful Covid-19 vaccines holds promise beyond the pandemic.

The French healthcare company said the deal would accelerate work already under way with Translate Bio, based in Lexington, Mass., to develop mRNA vaccines for Covid-19, seasonal flu and other infectious diseases. It will also hand Sanofi a platform to pursue further drugs and vaccines using mRNA technology.

Read More ->

Tesla Rival Li Auto Launches $2 Billion Hong Kong Share Sale

Electric-car maker Li Auto Inc. kicked off a near-$2 billion stock offering in Hong Kong, joining a string of U.S.-listed Chinese companies in tapping investors closer to home.

The Nasdaq-listed maker of electric vehicles is pushing ahead with the stock sale despite a recent selloff in offshore-listed Chinese stocks, which was fueled by a raft of official actions against sectors like tutoring, ride-hailing, food-delivery and property.

Read More ->

Cable, Internet Companies Stand to Gain From Broadband Funding in Infrastructure Bill

WASHINGTON-The $1 trillion infrastructure bill moving through the Senate this week stands to be a windfall for cable and fiber-optic internet companies, with $65 billion allocated to improve internet access for poor and isolated communities.

The plan, which must still be reconciled with a House version, would help home internet providers such as AT&T Inc. and Charter Communications Inc. by providing $40 billion in grants that states can dole out to operators that expand their networks to households that lack high-speed service.

Read More ->

Apartment Rents Increase as Young Workers Head Back to Cities

Apartment rents are rising fast, boosted by young professionals returning to cities and an expensive housing market that keeps many of them renting.

Stock prices of publicly traded apartment companies have jumped in stride. The FTSE Nareit Equity Apartments index, which tracks these landlords, is up 42% since January, trouncing the S&P 500's 17% gain during the same period.

Read More ->

Bundled Commercial Real-Estate Loans Climb to Sales Record

Sales of securities backed by riskier commercial real-estate loans have surged to a record, highlighting investors' demand for higher-yielding debt and expectations for a recovery in business properties.

Commercial real-estate collateralized loan obligations are created by private real-estate investors. In these deals, lenders sell debt and equity to make short-term loans to borrowers that renovate business properties, particularly multifamily housing. Money from interest payments and principal from the pool of bridge loans goes to bondholders, while any residual cash goes to equity holders.

Read More ->

Pensions Post Best One-Year Returns in Over Three Decades

Investments held by public pension systems, bolstered by private-equity and publicly traded stocks, posted their best returns since 1986 for the one-year period that ended in June.

The returns surged to a median of nearly 27% during the 12 months through June from about 3.4% in the year-earlier period, according to Wilshire Trust Universe Comparison Service. Pension fund executives credit private equity for some of the substantial gains.

Read More ->

Janet Yellen to Enact Steps to Avoid Breaching Debt Ceiling

WASHINGTON-Treasury Secretary Janet Yellen on Monday revealed further measures to avoid breaching the federal government's borrowing limit and urged Congress to increase or suspend the ceiling, which went back into effect on Sunday.

Starting Monday, the Treasury Department will suspend reinvestments by a number of retirement funds for civil servants and postal workers, Ms. Yellen said in a letter to congressional leaders. The funds will be made whole once the debt limit is either suspended or increased, she said.

Read More ->

Delta Variant Stalls Asia's Economic Recovery After Early Rebound

Asia is emerging as a weak link in an otherwise strong global economic recovery, as new pandemic restrictions restrain manufacturing in some countries and the exports that have powered the recovery in China show signs of slowing.

With progress on vaccinations slower than in the West, Asia is hitting new pandemic highs driven by the Delta variant of the coronavirus. The spread of the virus is threatening to hurt consumer confidence and erode the advantage of many Asian economies as manufacturing powerhouses.

Read More ->

RBA Presses on With QE Taper Even as Lockdowns Cripple Economic Outlook

SYDNEY-The Reserve Bank of Australia will press ahead with plans to reduce its government bond buying in September, even as the economic outlook deteriorates sharply amid pandemic-related lockdowns in several cities.

The RBA's decision means it will cut its government bond buying to 4 billion Australian dollars (US$2.95 billion) per week in September from A$5 billion as planned, with a further review of its buying scheduled for November.

Read More ->

U.S. Says It Has Shared 110 Million Covid-19 Vaccine Doses Overseas

WASHINGTON-President Biden's administration has shipped more than 110 million Covid-19 vaccine doses to 65 countries, the White House said, as it works to share supply with the rest of the world following regulatory and logistical setbacks.

The figures come about a month behind the White House's June goal of delivering 80 million doses overseas, part of a greater vaccine-donation drive by the U.S. in the coming months.

Read More ->

CDC's Covid-19 Mask Mandate Clouded by Flawed Data

The Centers for Disease Control and Prevention is fighting Covid-19 without a full arsenal of data that some public-health experts said it would need to persuade more people to take steps to contain the pandemic.

When CDC Director Rochelle Walensky said last week that people should wear masks again indoors in areas with "substantial" levels of Covid-19 transmission, for instance, she said evidence shows the Delta variant might be spread as easily by vaccinated people who become infected as by the unvaccinated. The CDC pointed to Provincetown, Mass., where it said large gatherings in July at bars, nightclubs and house parties led to hundreds of Covid-19 infections. More studies released over the weekend backed the CDC's conclusion, Dr. Walensky said.

Read More ->

Beijing Wants More Control of Arts Opinions Via Algorithms, Big Data

China's ideology watchdogs want stronger management of public opinions and commentaries on literary and artistic works with the use of big data and recommendation algorithms.

The Communist Party's Propaganda Department and four agencies pressed for the improvement of recommendation algorithms to better guide opinions on arts, according to the guidelines published by the state-run Xinhua News Agency late Monday. Such algorithms are widely used by social media and video streaming platforms to promote content.

Read More ->

Belarusian Olympic Athlete Who Refused to Go Home Says She Will Never Return

TOKYO-The Belarusian sprinter who refused her team's orders to fly home after a public dispute said she would never return home for fear for her life and is looking to continue her sporting career-and perhaps reach another Olympics-in another country.

In her first full press interview since the incident, Krystsina Tsimanouskaya, who received a Polish humanitarian visa on Monday, said her husband fled Belarus for neighboring Ukraine and they plan to meet up in Poland. Ms. Tsimanouskaya plans to fly to Warsaw as soon as Wednesday.

Read More ->

Donald Trump to Fight Release of Tax Returns, His Lawyer Says

WASHINGTON-Former President Donald Trump will fight any move by the Treasury Department to turn over his tax returns to Congress, a lawyer for Mr. Trump said Monday, days after the Justice Department directed the agency to provide the documents to a House panel.

"There is no evidence of any wrongdoing here and I object to the release of the returns not only on behalf of my client but on behalf of all future holders of the office of the president of the United States," said Ronald Fischetti, a lawyer for Mr. Trump.

Read More ->

Gov. Andrew Cuomo Sexual-Harassment Inquiry Nears Completion

The New York state attorney general's investigation into sexual-harassment allegations against Gov. Andrew Cuomo has entered its final stages and is expected to wrap up this month, people familiar with the inquiry said.

Investigators questioned the Democratic governor in his Manhattan office on July 17, and have since conducted follow-up interviews with at least two of his accusers, some of the people said. Last week, several outside attorneys working on the attorney general's probe toured the Executive Mansion and the governor's office suite at the state Capitol-the sites of some of the alleged harassment under investigation, two of the people said.

Read More ->

Write to sarka.halas@wsj.com

TODAY IN CANADA

Earnings:

5N Plus Inc. (VNP.T) 2Q

Aptose Biosciences Inc. (APS.T) 2Q

Bausch Health Companies Inc. (BHC.T) 2Q

Cargojet Inc. (CJT.T) 2Q

Finning InterNtnl. Inc. (FTT.T) 2Q

Gibson Energy Inc.(GEI.T) 2Q

Gran Tierra Energy Inc.(GTE.T) 2Q

Great-West Lifeco Inc. (GWO.T) 2Q

Innergex Renewable Energy Inc. (INE.T) 2Q

InterNtnl. Petroleum Corp.(IPCO.T) 2Q

Neighbourly Pharmacy Inc.(NBLY.T) 1Q

Sleep Country Canada Hldngs Inc (ZZZ.T) 2Q

Stella-Jones Inc. (SJ.T) 2Q

Stingray Gr. Inc. (RAY.A.T) 1Q

Economic Indicators (ET):

--0930 Jul Canada Manufacturing PMI

Stocks to Watch:

No items published

Other News:

No items published

Market Talk:

No items published

Expected Major Events for Tuesday

11:45/US: Weekly Chain Store Sales Index

12:55/US: 07/31 Johnson Redbook Retail Sales Index

13:30/CAN: Jul Canada Manufacturing PMI

14:00/US: Jun Manufacturers' Shipments, Inventories & Orders (M3)

14:00/US: Aug IBD/TIPP Economic Optimism Index

20:00/US: Jul Domestic Auto Industry Sales

20:30/US: 07/30 API Weekly Statistical Bulletin

23:01/UK: 3Q CBI SME Trends Survey

All times in GMT. Powered by Kantar Media and Dow Jones.

Expected Earnings for Tuesday

Armada Hoffler Properties (AHH) is expected to report for 2Q.

Blue Apron Holdings Inc (APRN) is expected to report for 2Q.

CF Bankshares Inc (CFBK) is expected to report for 2Q.

California Bancorp (CALB) is expected to report $0.28 for 2Q.

Clorox Co (CLX) is expected to report $1.31 for 4Q.

Comstock Mining Inc (LODE) is expected to report for 2Q.

ConocoPhillips (COP) is expected to report $1.09 for 2Q.

Cummins Inc (CMI) is expected to report $3.99 for 2Q.

Eli Lilly & Co (LLY) is expected to report $1.77 for 2Q.

Evoqua Water Technologies Corp (AQUA) is expected to report $0.16 for 3Q.

Expeditors International of Washington Inc (EXPD) is expected to report $1.60 for 2Q.

FTI Consulting (FCN) is expected to report $1.49 for 4Q.

Fannie Mae (FNMA) is expected to report $0.53 for 2Q.

Fidelity National Information Services (FIS) is expected to report $0.37 for 2Q.

First Citizens Bancshares Inc. Cl A (FCNCA,FCNCB) is expected to report $11.74 for 2Q.

First Financial Northwest Inc (FFNW) is expected to report $0.28 for 2Q.

Franklin Resources (BEN) is expected to report $0.69 for 3Q.

Houlihan Lokey (HLI) is expected to report $1.06 for 1Q.

Jacobs Engineering Group Inc (J) is expected to report $1.42 for 3Q.

L3Harris Technologies Inc (LHX) is expected to report for 2Q.

LGI Homes Inc (LGIH) is expected to report $4.00 for 2Q.

Leidos Holdings Inc (LDOS) is expected to report $1.27 for 2Q.

Materion Corp (MTRN) is expected to report $0.74 for 2Q.

National Retail Properties Inc (NNN) is expected to report for 2Q.

ORBCOMM (ORBC) is expected to report $-0.05 for 2Q.

Phillips 66 (PSX) is expected to report $0.57 for 2Q.

Phillips 66 Partners LP (PSXP) is expected to report $0.92 for 2Q.

Pitney-Bowes Inc (PBI) is expected to report $0.05 for 2Q.

Public Service Enterprise Group Inc (PEG) is expected to report $0.71 for 2Q.

Ryman Hospitality Properties Inc (RHP) is expected to report $-1.62 for 2Q.

Seres Therapeutics Inc (MCRB) is expected to report $-0.37 for 2Q.

Tennant Co (TNC) is expected to report $0.74 for 2Q.

Under Armour Inc - Class A (UA,UAA) is expected to report $0.03 for 2Q.

Unitil (UTL) is expected to report $0.21 for 2Q.

Waters Corporation (WAT) is expected to report $2.20 for 2Q.

X4 Pharmaceuticals Inc (XFOR) is expected to report $-0.75 for 2Q.

Xenia Hotels & Resorts Inc (XHR) is expected to report $-0.32 for 2Q.

Xylem Inc (XYL) is expected to report $0.56 for 2Q.

Zebra Technologies (ZBRA) is expected to report $3.43 for 2Q.

Zimmer Biomet Holdings (ZBH) is expected to report $1.14 for 2Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

AllianceBernstein Holding Raised to Buy From Neutral by Citigroup

Avantor Raised to Overweight From Neutral by Piper Sandler

Balchem Cut to Equal-Weight From Overweight by Stephens & Co.

Balchem Price Target Raised to $145.00/Share From $140.00 by Stephens & Co.

Bloomin' Brands Raised to Buy From Hold by Deutsche Bank

Byline Bancorp Cut to Equal-Weight From Overweight by Stephens & Co.

Colgate-Palmolive Is Maintained at Hold by Deutsche Bank

Colgate-Palmolive Price Target Cut to $84.00/Share From $86.00 by Deutsche Bank

Consolidated Comm Hldgs Raised to Neutral From Sell by Citigroup

Dolby Laboratories Raised to Outperform From Market Perform by Barrington Research

Encompass Health Raised to Strong Buy From Outperform by Raymond James

Estee Lauder Cut to Hold From Buy by Deutsche Bank

First Solar Raised to Positive From Neutral by Susquehanna

GreenSky Raised to Equal-Weight From Underweight by Stephens & Co.

Infinity Pharmaceuticals Raised to Overweight From Neutral by JP Morgan

Kimco Realty Raised to Overweight From Equal-Weight by Capital One

Liberty Oilfield Services Cut to Neutral From Buy by Goldman Sachs

LKQ Raised to Outperform From Market Perform by Raymond James

Misonix Cut to Neutral From Buy by BTIG

ResMed Cut to Hold From Buy by Needham

ResMed Cut to Sell From Outperform by CLSA

SciPlay Cut to Sector Weight From Overweight by Keybanc

Teladoc Health Cut to Hold From Buy by Argus Research

Telephone & Data Sys Cut to Underweight From Neutral by JP Morgan

US Cellular Cut to Underweight From Neutral by JP Morgan

Veoneer Raised to In-Line From Underperform by Evercore ISI Group

WW Grainger Cut to Market Perform From Outperform by Raymond James

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

August 03, 2021 06:15 ET (10:15 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.