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HomeAll NewsMost read newsBusiness Leaders Biography
Age : 60
Public asset : 2,132,464,315 USD
Linked companies : Comcast Corporation
Biography : Brian L. Roberts is a businessperson who has been at the head of 7 different companies and occupies

North American Morning Briefing: Markets Stabilize After Worst Fall for Stocks in Months

07/20/2021 | 06:05am EDT

MARKET WRAPS

Watch For:

U.S. Housing Starts for June; Canadian National Railway Co. 2Q earnings; Netflix Inc. 2Q earnings.

Opening Call:

Stock futures pointed to a rebound Tuesday, after major indexes tumbled Monday on concerns over the spread of Covid-19 variants and potential setbacks to the economic recovery.

Futures tied to the Dow Jones Industrial Average rose, suggesting a reversal for the blue-chip index that fell more than 700 points Monday in its worst session since October.

Investors have grown concerned over the Delta coronavirus variant, prompting a reassessment of the economy's prospects. Despite this, the three major stock indexes each closed only around 3% down from their all-time highs Monday, underscoring the strength of the rally that powered equity markets in the first half of the year.

"When you get a selloff like we had yesterday, there are certainly going to be some investors who are going to see that as an opportunity to invest for the longer term," said Kiran Ganesh, a multiasset strategist at UBS Global Wealth Management.

"Especially where the 10-year [Treasury] yields have gone, that still points to the default position for investors as long equities, because there are simply very few other options."

Earnings season is under way, with tobacco giant Philip Morris International and insurance company Travelers Companies scheduled to report ahead of the opening bell. Netflix, Chipotle Mexican Grill and United Airlines are slated to post earnings after markets close.

A gauge of housing starts in the U.S. in June is set for release at 8:30 a.m. ET. Economists expect a rise, as prices for materials such as lumber eased amid a limited supply of houses on the market.

Forex:

The dollar gained as worries about the global economic impact of the fast-spreading Delta coronavirus variant increases flows into safe havens. The DXY dollar index rose 0.1% to 93.0160.

"The price action continues to send an ominous warning signal over the global growth outlook and indicates that market participants are becoming fearful over a more notable slowdown ahead," MUFG Bank currency analyst Lee Hardman said.

The dollar's rise has been reinforced by a trimming of short-seller bets against the currency over the past month, he said.

Cryptocurrencies extended their declines, with bitcoin dropping below $30,000 Tuesday for the first time in a month. It declined nearly 3% from its level at 5 p.m. ET the previous day to around $29,800.

Sterling fell as investors fret over rising U.K. coronavirus cases and scale back monetary policy tightening expectations following remarks from Bank of England policymakers. GBP/USD fell 0.3% to a five-and-a-half-month low, according to FactSet. BOE official Jonathan Haskel said on Monday monetary stimulus wouldn't be curbed in the foreseeable future.

Catherine Mann, who will soon join the BOE, said on Monday the central bank shouldn't withdraw support too early. "Further comments by BOE members and the development of the pandemic following the lifting of corona restrictions in England are likely to be the most important driver for sterling over the coming weeks and might create additional volatility," Commerzbank's You-Na Park-Heger said.

Bonds:

In bond markets, the yield on the benchmark 10-year U.S. Treasury note edged up to 1.200%, after dropping to 1.181% Monday in the biggest daily decline since March.

Government bond yields will remain low in the medium term according to Erste Asset Management, which expects low yields to prevail in the second half of 2021. The backdrop to this is that central banks will keep the money tap open, even as some, above all the U.S. Federal Reserve, consider cautious exit strategies, it said.

"The USA is becoming gradually more likely to taper their bond purchase program once significant progress has been made on the labor market and with regard to inflation," said Erste AM's Managing Director Heinz Bednar and Head of Multi Asset Alexander Lechner.

The European Central Bank's meeting is likely to prove eventful as it incorporates the ECB's new framework into its policy guidance and adjusts itscommunication, said Peter Allen Goves, fixed income research analyst at MFS Investment Management.

The monetary policy statement will "almost certainly" be changed noticeably to account for the new symmetric 2% target, he said. MFS IM doesn't expect a formal change in actual policy this week but sees risks that the meeting will lean toward a dovish stance.

This could manifest itself with firmer intentions for the ECB to be persistent in maintaining favourable financing conditions. This is likely to reinforce the lower for (even) longer view in core market rates as well as provide further support to eurozone government bond spreads, Goves said.

Commodities:

Oil prices also ticked up after tumbling Monday on fears that Covid-19 could curb energy demand again. Brent crude added 0.3%, after dropping 6.8% in its worst daily performance since March. U.S. benchmark West Texas Intermediate also rose 0.3%, after logging its biggest drop since September.

"We sometimes forget that when we've had periods of very strong performance and low volatility, small bumps in the market do feel like they are more than they are," said Shaniel Ramjee, a multiasset fund manager at Pictet Asset Management.

Gold prices rose in morning European trade. Guotai Junan Futures said it doesn't expect significant downward pressure on the precious metal in the near term, in part because of some turbulence in the dollar. Gold traditionally shares an inverse relationship with the dollar.

TODAY'S TOP HEADLINES

Comcast CEO Brian Roberts and ViacomCBS Chairman Shari Redstone Met to Discuss Streaming Partnership

Comcast Corp. Chief Executive Brian Roberts met with ViacomCBS Inc. Chairman Shari Redstone in recent weeks to discuss a potential streaming partnership for international markets, according to people familiar with the matter, a sign the media companies see opportunities to join forces.

During the meeting, which was held around the end of June in New York, and which also included ViacomCBS CEO Robert Bakish, the executives discussed a variety of possible business partnerships that would allow the companies to enter non-U.S. markets together, the people said.

Read More ->

Opioid Settlement of $26 Billion Between Drug Companies, States Expected This Week

Thousands of opioid-crisis lawsuits filed against major drugmakers and distributors are nearing a conclusion, with the outlines of a $26 billion deal between states and four companies expected to be announced this week and a $1 billion settlement to resolve some of New York's claims likely on Tuesday, people familiar with the matter said.

Drug distributors AmerisourceBergen Corp., Cardinal Health Inc. and McKesson Corp. and manufacturer Johnson & Johnson have been negotiating the $26 billion settlement for more than two years as a way to resolve thousands of lawsuits filed by state and local governments blaming them for helping fuel the nation's opioid epidemic. From 1999 to 2019, the nation lost nearly half a million people to overdoses of prescription and illegal opioids, according to federal data.

Read More ->

The World's Biggest Miner Picks Profit Over Production

SYDNEY-BHP Group Ltd.'s chief executive earlier this year reminded investors that mining companies that bet big on new production during a commodity-price bull run often end up regretting it.

On Tuesday, the world's biggest mining company backed up that message by forecasting a flat outlook for its output over the next 12 months.

Read More ->

IBM's Revenue Rises for Second Straight Quarter

International Business Machines Corp. showed progress in delivering on Chief Executive Arvind Krishna's commitment to revive growth, posting a second straight quarter of higher revenue.

The top-line increase of 3.4%, IBM's biggest gain in three years, comes as the company is undergoing extensive changes, including the planned spinoff of some of its legacy IT activities that remain a multibillion-dollar business.

Read More ->

Capital One Steps Up Hiring Software Engineers After Cloud Migration

Capital One Financial Corp. wants to hire more than 3,000 technologists by year-end, partly as a result of its migration to Amazon.com Inc.'s public cloud, a transition the bank is using as a selling point for new hires.

"The great thing about being in the cloud [is] that's where engineers want to work," said Mike Eason, senior vice president of engineering for data and machine learning at Capital One.

Read More ->

Robinhood Expects $30 Million Fine in Cyber, Money-Laundering Probe of Crypto Arm

Robinhood Markets Inc.'s cryptocurrency arm expects to pay a $30 million fine to settle a New York state probe into its cybersecurity and anti-money-laundering practices, the mobile investing firm said in regulatory filings Monday, a sharp increase from an earlier estimate of the potential penalty.

Robinhood said in revised paperwork for a public listing that its crypto unit, Robinhood Crypto LLC, anticipates the payout as part of a proposed deal to end an investigation by financial regulators into allegedly lax security procedures.

Read More ->

Derby's Take: Fed Officials Suggest New Covid Surge Unlikely to Wreck Recovery

Covid-19-related economic risks, driven by a new and more virulent version of the coronavirus, weighed heavily on financial markets Monday. But for Federal Reserve officials, that threat was already on the radar screen.

In comments over the past few weeks, a number of central bank officials acknowledged the so-called Delta variant driving up new cases of illness and death, primarily among the unvaccinated, could darken what now appears to be a very bright economic outlook. But on the upside, as Fed officials see it, the risk is likely to be contained, given that many Americans are now vaccinated, making a replay of the lockdowns and ensuing economic pain seen in the spring of 2020 unlikely.

Read More ->

(MORE TO FOLLOW) Dow Jones Newswires

07-20-21 0604ET

Stocks mentioned in the article
ChangeLast1st jan.
AMERISOURCEBERGEN CORPORATION 0.38% 122.55 Delayed Quote.24.28%
AUSTRALIAN DOLLAR / BRITISH POUND (AUD/GBP) 0.12% 0.53171 Delayed Quote.-5.88%
AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.43% 0.62136 Delayed Quote.-2.12%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.90% 0.72997 Delayed Quote.-6.06%
BHP GROUP -0.72% 38.38 End-of-day quote.-9.55%
BITCOIN - EURO 0.10% 38217.51 Real-time Quote.58.03%
BITCOIN - UNITED STATES DOLLAR 0.19% 44971.23 Real-time Quote.50.87%
BRITISH POUND / EURO (GBP/EUR) 0.32% 1.16872 Delayed Quote.4.10%
BRITISH POUND / US DOLLAR (GBP/USD) 0.78% 1.37213 Delayed Quote.-0.12%
CANADIAN DOLLAR / BRITISH POUND (CAD/GBP) 0.22% 0.575589 Delayed Quote.-0.72%
CANADIAN DOLLAR / EURO (CAD/EUR) 0.53% 0.672708 Delayed Quote.3.40%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.98% 0.78964 Delayed Quote.-0.64%
CANADIAN NATIONAL RAILWAY COMPANY 0.25% 147.06 Delayed Quote.4.82%
CAPITAL ONE FINANCIAL CORPORATION 4.01% 166.02 Delayed Quote.58.32%
CARDINAL HEALTH, INC. 0.69% 51.36 Delayed Quote.-4.71%
CHIPOTLE MEXICAN GRILL, INC. 0.47% 1944.05 Delayed Quote.39.54%
CLINIGEN GROUP PLC -0.55% 638.5 Delayed Quote.-4.89%
COMCAST CORPORATION 0.27% 56.17 Delayed Quote.6.91%
DJ INDUSTRIAL 1.48% 34764.82 Delayed Quote.10.83%
DOW JONES FXCM DOLLAR INDEX -0.01% 11978.81 Delayed Quote.2.86%
EURO / BRITISH POUND (EUR/GBP) -0.31% 0.85565 Delayed Quote.-3.92%
EURO / US DOLLAR (EUR/USD) 0.44% 1.17415 Delayed Quote.-4.03%
GOLD -1.20% 1746.44 Delayed Quote.-6.48%
GUOTAI JUNAN SECURITIES CO., LTD. 2.51% 18.8 End-of-day quote.7.24%
INDIAN RUPEE / BRITISH POUND (INR/GBP) -0.66% 0.009868 Delayed Quote.-0.88%
INDIAN RUPEE / EURO (INR/EUR) -0.33% 0.011528 Delayed Quote.3.25%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.10% 0.013544 Delayed Quote.-0.91%
INTERNATIONAL BUSINESS MACHINES CORPORATION 1.56% 136.73 Delayed Quote.5.63%
LONDON BRENT OIL 1.78% 77.27 Delayed Quote.44.45%
MCKESSON CORPORATION 0.02% 202.68 Delayed Quote.16.51%
NETFLIX, INC. 0.44% 593.26 Delayed Quote.9.23%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 1.08% 0.7067 Delayed Quote.-2.56%
PHILIP MORRIS INTERNATIONAL, INC. 0.94% 101.45 Delayed Quote.21.40%
ROBINHOOD MARKETS, INC. -2.01% 45.94 Delayed Quote.0.00%
S&P GSCI BRENT CRUDE INDEX 0.00% 651.0647 Delayed Quote.45.54%
SCENTRE GROUP 0.00% 2.95 End-of-day quote.6.12%
UNITED AIRLINES HOLDINGS, INC. 3.92% 47.47 Delayed Quote.5.62%
US DOLLAR / BRITISH POUND (USD/GBP) -0.76% 0.728826 Delayed Quote.0.12%
US DOLLAR / EURO (USD/EUR) -0.45% 0.85168 Delayed Quote.4.20%
VIACOMCBS INC. 2.19% 40.06 Delayed Quote.5.21%
WTI 1.86% 73.3 Delayed Quote.46.78%