U.S. Personal Income & Outlays for June; U.S. Employment
Cost Index for 2Q; U.S. Chicago Business Barometer for July; U.S.
University of Michigan Final Consumer Survey for July; Canada Gross
Domestic Product for May; Enbridge Inc. 2Q earnings; Procter &
Gamble 4Q earnings; Chevron 2Q earnings; Exxon Mobil Corp. 2Q
earnings; Caterpillar Inc. 2Q earnings.
Stock futures fell Friday, suggesting that the S&P 500 may
end the week on the back foot on its way to close out its sixth
straight month of gains.
Futures tied to the S&P 500 declined, pointing to the broad
market benchmark erasing the 0.2% rise that it had eked out this
week through Thursday. Still, the gauge has advanced 2.8% so far in
July, leaving it close to an all-time high.
The monthslong rally in U.S. stocks has grown fragile in recent
weeks on signs that the pace of economic growth may be slowing and
snarls in the global supply chain for goods are persisting.
Lingering concerns over China's clampdown on its internet and
technology businesses as well as lofty expectations for corporate
earnings has weighed on sentiment this week.
Amazon.com's disappointing sales report late Thursday and weaker
outlook rattled Wall Street further, investors say.
"There are so many crosscurrents going on at the moment
influencing markets," said Sebastian Mackay, a multiasset fund
manager at Invesco. "We've entered a more volatile period for
markets, but markets will continue to move higher because we're
still seeing economic growth."
Amazon.com shares fell over 6% premarket after the giant
retailer reported second-quarter sales that were slightly below
analysts' expectations, and signaled that it expects sales to slow
further in the current quarter. The results highlighted the
challenge of sustaining the unfettered growth it has logged during
Ahead of the market opening, other giant growth stocks including
Facebook and Tesla slid more than 1% apiece. Apple, Microsoft and
Alphabet edged down by less than 1%. The tech sector makes up a big
component of U.S. markets, and a decline in those stocks can weigh
on the S&P 500 index.
Another batch of blue-chip corporate earnings are set to be
released before markets open, with Caterpillar, Procter &
Gamble, Exxon Mobil and Chevron slated to report.
The Commerce Department is also set to release data on June
consumer spending and inflation at 8:30 a.m. ET. Investors and
central bankers have closely monitored inflation reports and
indicators as they assess whether price increases will persist for
a prolonged period.
Overseas, the pan-continental Stoxx Europe 600 slid 0.5%, though
it remains on track to end July with gains.
The selloff this week in Hong Kong due to the recent regulatory
crackdown in China also continued, with the city's Hang Seng Index
declining almost 1.4% by the close on Friday. The index has shed
9.9% in July, its biggest monthly drop since October 2018.
The dollar is likely to recover after falling on profit taking
following the Federal Reserve's policy announcement on Wednesday,
The Fed's extra "hawkishness" in signalling that it is moving
closer towards tapering asset purchases was largely in the dollar's
price and may have prompted some profit taking, ING analysts said.
"We wouldn't read too much into the recent USD correction or
conclude this is a sign that the greenback's momentum may have
The global recovery looks "mixed at best" and China-related
sentiment remains volatile due to fears of more regulatory
clampdowns, which could boost safe haven flows into the dollar, the
Speculators appear to be rebuilding bets on a stronger sterling
ahead of the Bank of England's next policy meeting on August 5, ING
The pound has recently been buoyed by a fall in U.K. coronavirus
cases and is set to end the week as one of the best performing G10
currencies, ING analysts said, noting that GBP/USD has risen about
1.7% since last Friday.
"At the same time...GBP/USD appears to be mostly a function of
the dollar's moves: if it looks too early to see a break above
1.1900 in EUR/USD, it equally looks early to see any move above
1.4000 in Cable [GBP/USD]."
The euro stayed higher against the dollar after data showed the
eurozone economy grew by more than forecast in the second quarter
and inflation accelerated at a faster-than-expected pace in
The yield on the 10-year Treasury note ticked down to 1.242%
from 1.269% Thursday.
U.S. Treasury yields now discount an "unduly pessimistic view"
of the medium- to long-term outlook, Jonas Goltermann, senior
markets economist at Capital Economics, said.
Another shock coming along can't be excluded and worries about
these possibilities explain at least some of the recent drop in
bond yields, he said.
"But absent those risks actually materializing, we continue to
expect that Treasury yields will eventually resume their rise," he
says. CE forecasts the 10-year U.S. Treasury yield to end 2021 at
1.75% and rise to 2.5% by the end of 2023, Goltermann says.
Financial markets are known to overshoot, and as regards
government bond markets, ING is of the view that the move down in
yields has been "a lot more" exaggerated than on the way up.
The Fedand the European Central Bank continue to buy $120
billion and EUR100 billion, respectively, in assets per month, and
in the best of times, this has a distorting effect on rates, said
ING's senior rates strategist Antoine Bouvet. "In illiquid summer
months, these distortions are magnified," he says.
Oil prices were lower, though both benchmarks are on course to
close out the week with gains of 1% and 1.8%, respectively. Those
gains came after upbeat data from the EIA and API earlier in the
week showing tightening inventories in the U.S.
That, plus a weaker dollar--dollar-denominated commodities such
as oil become less expensive for other currency holders when the
dollar drops--are behind oil's gains this week, ING's Warren
A rise in the dollar is behind Friday's gentle losses, and
Patterson says that given the some weakness in heavier crude
markets, there's little to justify further gains for futures
Gold was mostly flat alongside expectations that the Fed won't
abandon its accommodative monetary policies anytime soon, Oanda
said, pointing to U.S. economic data that fell short of its
"A downside surprise in both GDP and jobless claims justifies
the Fed's dovish stance," it said. "That should provide a
short-term bullish environment for bullion."
Oanda said that if gold can exceed the $1,850/oz resistance
level, technical buying could support a strong rally back toward
TODAY'S TOP HEADLINES
China's Tech Crackdown Could Backfire Badly
In the superhero movie "Avengers: Infinity War," antagonist
Thanos snaps his fingers and half of life in the universe instantly
disappears. After the rout of the past few days, that may sound
horribly familiar to investors in certain Chinese educational and
internet technology stocks.
The big question is what comes next.
Read More ->
Tesla Megapack Catches Fire at Australian Battery Project
SYDNEY-A Tesla Megapack caught fire at one of Australia's
largest battery storage projects on Friday, as fire crews worked to
prevent it spreading across the site in Victoria state.
Flames engulfed a lithium battery weighing 13 metric tons that
was housed within a shipping container at the site in Moorabool,
near Melbourne, according to a statement from Fire Rescue
Read More ->
Household Spending Likely Rose in June, Before Delta Variant
U.S. households likely boosted spending in June, contributing to
robust growth during the second quarter, though the current upswing
in Covid-19 cases related to the Delta variant and higher inflation
are injecting uncertainty into the economic outlook.
Economists estimate that the Commerce Department will report
Friday that personal-consumption expenditures-a measure of
household spending on goods and services-increased 0.7% last month.
That would follow a flat reading in May, when consumers pulled back
on purchases of goods but boosted spending on services.
Read More ->
Big Oil Is Vulnerable to Climate Change. Literally.
Alaska seems like one of the last places on the planet that
could use extra cooling. That is exactly what it will soon need,
though, to prevent one of the world's largest oil pipeline systems
from sinking into melting permafrost.
Recent wildfires, floods and droughts across the world are
bringing the spotlight once again to the contribution that the
oil-and-gas industry has made to climate change. Less talked about
is how exposed the industry is itself to unusual and extreme
weather. It doesn't quite threaten the industry's existence and
could even benefit some producers. Shareholders and consumers could
be left with the tab, though.
Read More ->
U.S. Crypto Traders Evade Offshore Exchange Bans
Americans are circumventing bans intended to stop U.S. customers
from accessing overseas cryptocurrency exchanges, new research
A report released Friday found that hundreds of Americans are
trading risky crypto derivatives on offshore exchanges such as FTX
and Binance. The report sheds light on an open secret in the
industry: U.S. crypto enthusiasts can easily bypass measures that
seek to block them from offshore exchanges.
Read More ->
U.S. Import Surge Overwhelms Warehouse Space Near Ports
Surging demand for warehousing close to major ports driven by
the growth of e-commerce and the flood of container imports hitting
U.S. shores is making storage space harder to find and more
expensive, adding new stresses to already strained supply
Logistics service providers and real-estate firms say
competition for warehouses close to ports such as those in Southern
California and New York City is intense, pushing up rents and
forcing companies to look to neighboring regions to serve shippers'
Read More ->
Eurozone Economy Showed Stronger-Than-Expected 2Q Rebound
The eurozone economy grew at a faster-than-expected pace in the
second quarter, thanks to the easing of coronavirus restrictions
across the continent.
Across the 19 countries that use the euro as their currency,
gross domestic product grew 2.0% in the second quarter, the
European Union's statistics agency Eurostat said Friday in a first
estimate for the period. Economists polled by The Wall Street
Journal had expected a 1.5% expansion.
Read More ->
The U.S. Economy's Prospects Looked Bright, Until the Delta
The U.S. economy grew rapidly in the second quarter and exceeded
its pre-pandemic size, but the outlook has suddenly turned cloudier
due to the fast-spreading Delta coronavirus variant.
Virus cases are rising again, particularly in parts of the
country where vaccination rates remain low. The Centers for Disease
Control and Prevention this week recommended that vaccinated people
resume masking indoors in places with high or substantial
transmission of coronavirus, leading some local governments and
businesses to reinstate restrictions on activity.
Read More ->
Republicans Top Democrats in Passing State Voting Laws, Often
At least 41 states have made changes to their election laws
already this year following the contentious 2020 election.
Republicans this year have sponsored at least 114 new state laws
that make changes to elections, including new restrictions on mail
ballots following a sharp increase in voting by mail during the
pandemic-era election, according to a Wall Street Journal analysis
conducted after many state legislatures have wrapped up their
Read More ->
First Airlift of Imperiled Afghan Interpreters Departs for
WASHINGTON-The first plane carrying more than 200 Afghan
interpreters and their families departed for the U.S., officials
said, beginning a major effort to evacuate thousands of Afghans who
face retribution by the Taliban for aiding the U.S. military and
reconstruction effort over two decades of war.
The families will be resettled in cities across the country with
assistance from the U.S. Refugee Admissions Program, the officials
said. Many will be sent on to places where friends, relatives or
other connections already live.
Read More ->
EU Overtakes U.S. in Covid-19 Vaccines as Delta Variant
MILAN-The European Union passed the U.S. in Covid-19
vaccinations, with the continent inoculating people at a sustained
pace and America struggling to persuade vaccine holdouts to get a
shot to slow the spread of the Delta variant.
The EU has given at least one vaccine shot to 259 million
people, or 58.3% of the total population of its 27 member countries
as of Thursday, according to figures compiled by Our World in Data,
an Oxford University project tracking the global vaccine rollout.
The U.S. has reached 56.7% of its population, equivalent to 189
Read More ->
Biden Says Federal Employees Must Get Covid-19 Shots or Wear
Masks, Test Regularly
President Biden said federal employees and on-site contractors
must get vaccinated against Covid-19 or wear a mask on the job and
submit to regular testing, and he called on state and local
governments to make $100 payments to newly vaccinated
Mr. Biden also said in a speech Thursday that he is directing
the Defense Department to examine how and when Covid-19 shots could
be added to the list of vaccinations required for members of the
Read More ->
Write to firstname.lastname@example.org
TODAY IN CANADA
Capital Power Corp. (CPX.T) 2Q
Enbridge Inc. (ENB.T) 2Q
George Weston Limited (WN.T) 2Q
Imperial Oil Limited (IMO.T) 2Q
Restaurant Brands Intl Inc (QSR.T) 2Q
SNC-Lavalin Grp Inc. (SNC.T) 2Q
TELUS Corp. (T.T) 2Q
TELUS Intl (CDA) Inc. (TIXT.T) 2Q
Economic Indicators (ET):
0830 May GDP
0830 Jun Industrial product & raw materials price
Stocks to Watch:
Interfor Says BC Production Impacted by Log Supply
Interfor Corp. on Thursday said it was expecting production
delays at its British Columbia Interior sawmills, as wildfires and
other factors impact the supply of logs.
The company said it expects to curtail a minimum of 50 million
board feet of production across B.C. Interior operations in August,
with further downtime possible in September and later.
Interfor also said that over the past 12 months the B.C.
Interior operations produced about 725 million board feet of
lumber, "representing about 26% of the company's total
Andrew Horahan, SVP of Western Operations at Interfor, said,
"The wildfires in the B.C. Interior and the related provincial
state of emergency and government-mandated curtailment of all
forest harvesting activities are expected to have a significant
impact on Interfor's operations in the next several weeks or
No items published
No items published
Expected Major Events for Friday
01:00/JPN: Jun Steel Imports & Exports Statistics
04:30/JPN: Jun Preliminary Report on Petroleum Statistics
05:00/JPN: Jun Housing Starts
05:00/JPN: Jun Construction Orders
05:30/FRA: Jun Household consumption expenditure in manufactured
05:30/FRA: 2Q GDP - first estimate
06:45/FRA: Jul Provisional CPI
07:00/ITA: Jun Unemployment
08:00/GER: 2Q GDP - 1st release
08:00/ITA: 2Q GDP preliminary estimate
08:30/UK: 2Q Insolvency statistics
09:00/ITA: Jul Cities CPI
09:00/ITA: Jul Provisional CPI
12:30/US: Jun Personal Income & Outlays
12:30/CAN: May GDP
12:30/CAN: Jun Industrial product & raw materials price
12:30/US: 2Q Employment Cost Index
13:45/US: Jul Chicago Business Barometer - ISM-Chicago Business
Survey - Chicago PMI
14:00/US: Jul University of Michigan Survey of Consumers -
19:00/US: Jun Agricultural Prices
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Friday
AbbVie Inc (ABBV) is expected to report $1.94 for 2Q.
AdvanSix (ASIX) is expected to report $0.85 for 2Q.
Archrock Inc (AROC) is expected to report $0.06 for 2Q.
Avient Corp (AVNT) is expected to report for 2Q.
Barnes Group (B) is expected to report $0.42 for 2Q.
Bloomin' Brands (BLMN) is expected to report $0.67 for 2Q.
Booz Allen Hamilton Holding Corp (BAH) is expected to report
$0.96 for 1Q.
Cabot Oil & Gas Corp (COG) is expected to report $0.26 for
Camber Energy Inc (CEI) is expected to report for 4Q.
Canfor Pulp Products (CFPUF,CFX.T) is expected to report for
Capital Power Corp (CPX.T) is expected to report $0.51 for
Carter's Inc (CRI) is expected to report $0.86 for 2Q.
Cboe Global Markets Inc (CBOE) is expected to report $1.17 for
Centerra Gold (CG.T) is expected to report $0.11 for 2Q.
Cerner Corp (CERN) is expected to report $0.60 for 2Q.
Charter Communications Inc (CHTR) is expected to report $4.74
Chevron Corporation (CVX) is expected to report $1.60 for
Church & Dwight Inc (CHD) is expected to report $0.69 for
Civeo Corp (CVEO) is expected to report for 2Q.
Colgate-Palmolive Co (CL) is expected to report $0.79 for
Community Bankers Trust (ESXB) is expected to report $0.24 for
Community West Bancshares (CWBC) is expected to report for
Dana Incorporated (DAN) is expected to report $0.49 for 2Q.
Dime Community Bancshares Inc (DCOM) is expected to report for
Eco (Atlantic) Oil & Gas Ltd (EOG.V) is expected to report
for Full year.
Enbridge Inc (ENB,ENB.T) is expected to report $0.52 for 2Q.
Eversource Energy (ES) is expected to report $0.79 for 2Q.
Grainger (WW) (GWW) is expected to report $4.54 for 2Q.
Hill-Rom Holdings Inc (HRC) is expected to report $0.89 for
Huntsman Corp (HUN) is expected to report $0.81 for 2Q.
Lexicon Pharmaceuticals Inc (LXRX) is expected to report $-0.16
Mammoth Energy Services Inc (TUSK) is expected to report $-0.23
Moog Inc - Class A (MOGA,MOGB) is expected to report $1.19 for
Obsidian Energy Ltd (OBE,OBE.T) is expected to report for
Procter & Gamble (PG) is expected to report $1.08 for
Provident Financial Services Inc (PFS) is expected to report
$0.46 for 2Q.
Telus Corp (T.T,TU) is expected to report $0.26 for 2Q.
Weston (George) Ltd (WN.T,WNGRF) is expected to report for
Weyerhaeuser Co (WY) is expected to report $1.34 for 2Q.
iRadimed Corp (IRMD) is expected to report $0.07 for 2Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Allegiant Travel Raised to Buy From Neutral by B of A
Altice USA Cut to Outperform From Strong Buy by Raymond
Benchmark Elec Raised to Buy From Neutral by Sidoti &
Century Communities Raised to Hold From Sell by Zelman
Cirrus Logic Cut to Neutral From Buy by B of A Securities
Cirrus Logic Raised to Buy From Hold by Craig-Hallum
Cognizant Tech Solutions Raised to Buy From Hold by Societe
CyrusOne Cut to Hold From Buy by Truist Securities
CyrusOne Raised to Outperform From Underperform by Raymond
Extreme Networks Raised to Buy From Hold by Needham
First Merchants Raised to Buy From Neutral by Janney Montgomery
Investors Bancorp Cut to Neutral From Buy by Janney Montgomery
iRobot Cut to Neutral From Overweight by JP Morgan
Moody's Cut to Neutral From Buy by UBS
Nabors Raised to In-Line From Underperform by Evercore ISI
Navient Cut to Neutral From Buy by Citigroup
Raytheon Technologies Raised to Buy From Hold by Argus
Teradyne Raised to Positive From Neutral by Susquehanna
Tesla Raised to Buy From Sell by DZ Bank
Zoom Video Communications Raised to Overweight From Sector
Weight by Keybanc
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
July 30, 2021 06:13 ET (10:13 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.