The minute of the Tuesday market
- Global stocks mixed as a potential crackdown on gaming companies in China slashes gains in Asia, while corporate profits outweigh the growth in COVID infections on Wall Street.
- European equities are testing all-time highs following stronger-than-expected energy and banking profits.
- 10-year benchmark bond yields remain below 1.2% as slowing ISM data, uneven job gains and the highest new COVID infections in more than a year raise issues of recovery.
- U.S. equity futures suggest a firmer open on Wall Street ahead of second quarter earnings from Eli Lilly, Under Armor, Discovery Communications and Alibaba.
Wall Street futures traded higher on Tuesday, fueled in part by strong corporate earnings and another drop in Treasury bond yields, even as investors continue to follow a worrying resurgence of infections in the COVID that could change the pace of the US economic recovery.
Even with the Centers for Disease Control and Prevention reporting that 165 million Americans have been fully immunized – and President Joe Biden’s goal of having 70% of the adult population protected has been met – the Delta variant of COIVD- 19 has been lifted. the country’s infection rate at its highest for more than a year, with 86,000 new cases reported yesterday.
The prevalence of these infections is likely to be much lower, given the rate of two-shot vaccinations and the number of Americans who have already developed natural immunity, but the revolutionary aspect of the new variant raises concerns about keep pace with economic growth in the second half of the year.
The ISM Manufacturing survey slowed for a second consecutive month in July, largely due to supply chain constraints, while stubbornly high weekly jobless claims suggest a lower-than-expected reading of job gains in July later this week.
In response, benchmark 10-year Treasury yields fell yesterday, trading at 1.151%, before rising to around 1.195% at the start of the New York session on Tuesday.
However, stocks may still find reasons to rise, with Senate lawmakers set to vote on a $ 1 trillion infrastructure stimulus bill and second-quarter corporate profits are expected to rise 89.8. % over last year to reach $ 432.4 billion equity-weighted.
This has US equity futures on the move on Tuesday, with contracts linked to the Dow Jones Industrial Average showing an opening bell gain of 150 points and those linked to the S&P 500 priced 14 points higher.
Tuesday’s pre-market results list includes Eli Lily (THERE IS) – Get a report, Under protection (UAA) – Get a report, Discovery Communication (DISCA) – Get a report, and Alibaba (BABA) – Get a report.
Lower Treasury bond yields, plus pre-market gains for Apple (AAPL) – Get a report and Tesla (TSLA) – Get a report, provide some support for the Nasdaq, but new signs of a crackdown on gambling actions in China capped Tuesday’s lead at around 15 points.
In Europe, results exceeding expectations of oil giant BP Plc (PA) – Get a report, which followed its rival, Royal Dutch Shell (RDS.A) , increasing dividends and share buybacks, gave energy stocks a boost and propelled the Stoxx 600 to an early gain of 0.22%.
Overnight in Asia, an editorial in the state-backed Economic Information Daily newspaper, which called online gambling “spiritual opium,” raised concerns about another sectoral crackdown by officials in the industry. Beijing, by sending shares of Tencent Holdings. (IRRITABLE) 10% less on the session, with spillover effects observed on the actions of the region.
The Japanese Nikkei 225 closed 0.5% lower at 27,614.83 points.