MARKET WRAPS
Stocks:
Stocks in Europe struggled on Monday at the start of a busy week of central bank meetings and corporate earnings and after data showed business activity in the eurozone weakened in July.
Read Eurozone Economy Contracts Further in July, PMIs Suggest
Economic Insight
An interest rate rise by the European Central Bank in September, following a widely expected 25 basis point increase this week, cannot be ruled out, but either way, the ECB does not want September to be seen as a turning point in the monetary policy cycle, Deutsche Bank said. Read more .
Read Fed, ECB Seen on Similar Route on Policy Rates
U.S. Markets: Markets:
Stock indexes nudged higher at the start of a week that will bring more bluechip earnings, with Meta and Microsoft among the corporate heavyweights due to report results, and an interest-rate decision from the Federal Reserve.
Investors will also be watching Monday to see if the Dow industrials can build on a ten-session winning streak.
Treasury yields slipped, with the benchmark 10-year yield falling slightly from Friday's 3.837%.
Follow WSJ markets coverage here .
Forex:
The euro fell to a 12-day low against the dollar after provisional July eurozone PMI data showed activity contracted more than expected, with manufacturing particularly weak.
"The eurozone economy will likely move further into contraction territory in the months ahead," Hamburg Commercial Bank said.
It added that Germany saw a "jaw-dropping fall in both new orders and backlogs of work."
Track the analysts' views on the PMIs
Morgan Stanley said the euro has little scope to rise further versus the dollar, advising that investors hold back from buying the currency ahead of Thursday's ECB decision.
"The moderate path for ECB rate cuts, following the peak terminal rate, also suggests that upside risks for the EUR are limited from here," Morgan Stanley said.
ING said the dollar could get a boost from Wednesday's Fed decision, where it looks "too early" for policymakers to switch to a data-dependent approach.
The market's high number of short dollar positions could also lift the currency this week as investors take profit on these, ING said.
"The latest data from the FX futures markets in Chicago suggests that asset managers are running their largest short dollar position on record."
The dollar should continue its "corrective/slightly bid tone" barring surprises from Monday's eurozone PMI data or Friday's Politburo meeting in China, ING added.
Energy:
Oil prices remained lower in a possible technical retreat following last week's rally, with investors looking ahead to this week's Fed and ECB meetings.
Despite the declines, Brent remains close to an 11-week high as optimism about the possibility the Fed can bring inflation down without forcing a recession has grown.
"With inflation readings continuing to ease across key markets, the prospect of peak interest rates has further buoyed bullish sentiment [in oil] countering the negative narrative of slower economic growth in the quarters ahead," BMI said.
Metals:
Metals prices fell on a stronger dollar and on concerns about demand, particularly from China.
"Softening manufacturing activity suggests industrial metals demand will remain subdued over coming months," ANZ said.
DOW JONES NEWSPLUS
EMEA HEADLINES
Royal Philips 2Q Sales Rose; 2023 Guidance Raised
0752 GMT - Royal Philips's raised 2023 guidance looks conservative given its 2Q performance, which is likely to raise some questions, Citi analysts Veronika Dubajova and Giang H. Nguyen say in a note.The health-technology company's 2Q performance had the market expecting a beat and guidance upgrade, and it delivered a better-than-expected beat, however, "We continue to see significant ongoing uncertainty around Respironics, including personal-injury litigation, the pending consent decree, and the DOJ investigation," the analysts say, referring to the U.S. justice department's investigation into the recall of its sleep-therapy devices. Citi rates the stock neutral and has a EUR19 target price. Shares down EUR1.35, or 6.5%, at EUR19.48. (anthony.orunagoriainoff@dowjones.com)
Vodafone Backs Guidance Despite 1Q Revenue Slip; Names New Incoming CFO
Vodafone Group PLC said Monday that revenue in its first quarter declined though it reiterated fiscal 2024 guidance, and named Luka Mucic as incoming chief financial officer.
The U.K.-based telecommunications group said revenue for the first quarter ended June 30 was 10.74 billion euros ($11.95 billion) compared with EUR11.28 billion a year earlier.
Ryanair 1Q Net Profit Rose, Beating Consensus; FY 2024 Traffic Below Guidance
Ryanair Holdings said Monday that net profit for the first quarter of fiscal 2024 rose, beating consensus, but that traffic for the full year is expected to be lower than previous guidance due to Boeing delivery delays in the spring and fall of 2023.
The Irish low-cost carrier said for the three months ended June 30, net profit was 662.9 million euros ($737.5 million) compared with EUR187.5 million in the same period last year. Net profit consensus was EUR506.2 million, according to FactSet and based on three analysts' estimates.
Tight Race in Spain Points to Hung Parliament
Spain's national election failed to produce a clear majority, with no political force commanding enough seats in parliament to form a government, a result likely to usher in prolonged coalition negotiations between large and smaller parties.
Spanish voters flocked to the main center-right and center-left parties, but not enough to give either a clear mandate. The results are so close that both the ruling Socialists and the opposition Popular Party could have a shot at forming a new government. It is also possible no majority will be found and that Spaniards will be asked to return to the polls.
The British Economy Looks Ugly. Investors, Now's the Time to Strike.
On paper, the U.K. is in dire straits.
Among the world's major economies, it has the fastest inflation, at more than 8%. It has some of the highest interest rates, with the Bank of England considering a second consecutive half-point increase in August. And while it's not in recession like its neighbor Germany, the outlook is for tepid growth for the next few years.
Royal KPN Backs Full-Year Guidance After 2Q Net Income, Adjusted Earnings Beat Views
Royal KPN on Monday reported 16% rise in second-quarter net income, beating market forecasts, and backed its full-year guidance.
The Dutch telecommunications company made a quarterly net profit of 216 million euros ($240.3 million), compared with EUR186 million in the second quarter of 2022 and a company-compiled consensus of EUR174 million.
Julius Baer Reports Increase in 1H Earnings
Julius Baer Gruppe on Monday reported increased earnings for the first half of 2023, helped by higher interest rates.
The Swiss private banking group said net profit for the period rose 18% on year to 531.8 million Swiss francs ($614.2 million).
Stellantis, Samsung SDI Make Deal for Second US Battery Factory
Stellantis said Monday that it has a deal with Samsung SDI to build a second battery factory in the U.S. for an undisclosed sum.
The Netherlands-based car maker whose brands include Jeep and Dodge said it has a memorandum of understanding with the South Korean battery manufacturer to build the plant to fuel its transition to fully electric vehicles.
GLOBAL NEWS
Beijing Launches New Measures to Boost Private Investment
China's top economic planner released a set of new policy guidelines on Monday to support private investment, as part of a drive to rekindle entrepreneurial spirit amid faltering growth.
Beijing will look to revitalize private investment and encourage private capital to participate in major national projects, the National Development and Reform Commission said in an official notice on its website.
The Inflation Giant Has Awakened. Why Price Growth Will Persist
No matter which inflation gauge you use, U.S. price growth has decelerated sharply in the past year. Yet, now that the Federal Reserve has managed to bring inflation closer to its 2% target, it could be a mistake to think it will stay low.
To the contrary, inflation is likely to be a more persistent threat than it has been in decades, owing to the long list of powerful forces that have driven prices higher, and the limits of central-bank efforts to control it. History also suggests that price volatility is less the exception than the norm.
Stocks are making a run for record territory. Will the Fed end its rate hikes anyway?
Stocks have been closing in on record territory, which isn't supposed to be a key worry of the Federal Reserve.
But after a dizzying three years of pandemic extremes, the stock rally has become a source of market angst, right as the Fed attempts a final chapter in its epic rate hiking saga.
Earnings Are the Tech-Stock Rally's Next Big Test
Tech earnings season is here, and with the sector flying high, investors will be looking for reasons to stay bullish after a blockbuster first half.
Over the next two weeks, five of the largest companies in the technology sector will report June quarter results that will set the tone for the year's second half. Numbers from Microsoft (ticker: MSFT), Alphabet (GOOGL) and Meta Platforms (META) are due the first week, followed by Apple's (AAPL) and Amazon.com's reports the next week.
U.S., Allies Hold Record-Setting Military Exercise in Australia in Message Aimed at China
SHOALWATER BAY TRAINING AREA, Australia-At this military firing range in Australia's north, American jet fighters dropped 500-pound bombs on a hillside. Korean, Australian and American artillery units opened fire soon after. A Japanese surface-to-air missile system stood nearby.
(MORE TO FOLLOW) Dow Jones Newswires
07-24-23 0545ET
