MARKET WRAPS

Watch For:

Retail Sales for June; Import Prices for June; Industrial Production and Capacity Utilization for June; University of Michigan mid-July Consumer Survey; Canada Wholesale Inventories for May; earnings from BlackRock, Citigroup, UnitedHealth, Wells Fargo

Opening Call:

Stock futures edged lower on Friday as investors awaited further earnings reports from the biggest banks in the U.S., which disappointed in the previous session.

Worries over an economic slowdown and the Federal Reserve's aggressive moves to tame rising prices have led Wall Street sharply lower this year. While expectations the Fed will boost rates by a full percentage point at the end of the month have been scaled back, investors still expect the central bank to boost rates by at least 75 basis points to cool inflation that is running at a historic high.

"Recession risks have risen since the beginning of the year," said Mike Bell, global market strategist at J.P. Morgan Asset Management. "If we don't get any signal of consumer retrenchment, maybe it's not as bad as people fear, but if we do get that it's a signal recession risk is materializing."

More than two-thirds of U.S. economic activity is tied to household spending. Recessions typically are accompanied by a pullback by consumers. Economists expect the Commerce Department to report that Americans' retail spending rose in June, after declining in May, when figures are released at 8:30 a.m. ET.

The University of Michigan will publish an initial reading of its consumer-sentiment survey for July at 10 a.m. ET. Economists expect the report to show there was a slight improvement in consumer's moods in July from June's final reading, when it fell to its lowest point on record.

Elsewhere, China's economy grew only 0.4% in the second quarter, the country's weakest growth rate in more than two years. Beijing has adopted a zero-Covid policy that meets outbreaks of the virus with severe restrictions, which has led many businesses to close.

Read: China's Economy Records 0.4% Growth, Weakest Since Wuhan Lockdown

Stocks in Shanghai finished Friday's session down 1.6%, while Asian markets, more broadly, were mixed. In Europe, the major indexes posted moderate opening gains.

Forex:

EUR/USD's rebound back above parity suggests investors are wary about selling the euro heavily ahead of next week's ECB meeting, UniCredit Research said.

"Investors are still prudent about dragging the pair much lower ahead of the ECB meeting next week now that most option barriers have probably been hit."

U.S. data due Friday, including retail sales, industrial production and the University of Michigan consumer sentiment survey, are likely to "keep activity quite choppy and might even spark more profit-taking at the end of a tough week."

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USD/JPY may extend its uptrend to 140.00, and possibly as high as 141.50, based on technical charts, said UOB.

On Thursday, the currency pair jumped by 1.08% and its daily moving average convergence divergence indicator has become positive for the first time since late June. The rapid build-up of upward momentum suggests USD/JPY could head higher to those levels, UOB added.

To sustain this momentum, USD/JPY shouldn't fall below support at its 21-day exponential moving average, which is currently at 136.05.

Energy:

Oil prices maintained modest gains in Europe as concerns about supply tightness countered recession worries, although Fitch said crude's recent declines may be overdone.

It said economic growth should still be robust at around 3% this year and next. Meanwhile, "despite large-scale strategic storage releases and demand-side weakness in China, the market has remained extremely tight."

Fitch expects Brent to average $105 a barrel this year and $100 a barrel in 2023.

Metals:

Copper prices fell below $7.000 a ton, the first time since November 2020, while gold was also a touch lower, as global growth fears continued to hit market sentiment.

Rate hikes in Europe and the U.S. as well as Chinese growth concerns are curtailing demand for metals, said Commonwealth Bank of Australia.

"These global growth fears combined with hawkish U.S. monetary policy is helping drive a surge in the dollar. That's been particularly negative for industrial metals and oil benchmarks in recent weeks," CBA said.


TODAY'S TOP HEADLINES


Amazon Has Been Slashing Private-Label Selection Amid Weak Sales

Amazon.com Inc. has started drastically reducing the number of items it sells under its own brands, and the company has discussed the possibility of exiting the private-label business entirely to alleviate regulatory pressure, according to people familiar with the matter.

Amazon's private-label business, with 243,000 products across 45 different house brands as of 2020, has been a source of controversy because it competes with other sellers on its platform. The decision to scale back the house brands resulted partly from disappointing sales for many of the items, the people said. It also came as the retail-and-technology giant has faced criticism in recent years from lawmakers and others that it sometimes gives advantages to its own brands at the expense of products sold by other vendors on its site.


SEC Probes Better.com After Lawsuit Alleges Company Misled Investors

The Securities and Exchange Commission is examining whether Better.com violated federal securities laws, the online mortgage lender disclosed Thursday.


Celsius Owes Users More Than $4.7 Billion

Celsius Network LLC has a roughly $1.2 billion hole in its balance sheet, with the majority of its liabilities owed to the cryptocurrency lender's users, according to a Thursday filing by Chief Executive Alex Mashinsky.

Of Celsius's $5.5 billion in total liabilities, more than $4.7 billion is owed to Celsius's users, according to the declaration Mr. Mashinsky submitted to bankruptcy court.


Elliott Sets Sights on Pinterest

Activist investor Elliott Management Corp. has taken a big stake in Pinterest Inc., according to people familiar with the matter, as the once-hot social-media company grapples with a decline in users and other challenges.

Elliott has told the company that it is the biggest investor in Pinterest, having built a stake of more than 9% in recent months-partly in common stock, one of the people said. The activist has been in discussions with Pinterest over the past several weeks. It couldn't be learned what they have been discussing.


NFT Marketplace OpenSea to Lay Off 20% of Employees

OpenSea, one of the largest marketplaces for nonfungible tokens, said Thursday it would cut a fifth of its staff as the crash in cryptocurrency prices continued to wreak havoc on digital-asset firms.

Chief Executive Devin Finzer said in an internal memo to employees that he shared on Twitter that the company would provide severance and healthcare coverage into 2023, as well as accelerated equity vesting, for those laid off.


Stock Futures Waver as Earnings Season Heats Up

U.S. stock futures were little changed with another round of earnings reports from major financial institutions on tap.

S&P 500 futures were up 0.1% and futures tied to the Dow Jones Industrial Average added 0.1%. The contracts don't necessarily predict market moves after the markets open.


China's Economy Records 0.4% Growth, Weakest Since Wuhan Lockdown

SINGAPORE-China recorded its weakest growth rate in more than two years, a measure of the costs imposed on the world's second-largest economy by Beijing's zero-tolerance approach to Covid-19.

Gross domestic product expanded at a 0.4% annual rate in the April to June period, China's National Bureau of Statistics said Friday. That was the worst performance since the first quarter of 2020, when the pandemic first erupted and the economy shrank 6.9% after the Central Chinese metropolis of Wuhan became the first city in the world to lock down to stem the spread of Covid-19. Economists polled by The Wall Street Journal had forecast China's economy to grow 0.9%.


China's New-Home Prices Fell Further in June; Real-Estate Investment Kept Sliding in First Half

BEIJING--The decline in China's new-home prices widened in June as the embattled property sector continued to struggle to shrug off the impact of last year's regulatory crackdown, despite Beijing's supportive measures to counter plummeting home prices.

Average new-home prices in 70 major cities fell 1.29% in June from a year earlier, compared with May's 0.79% decrease, according to Wall Street Journal calculations based on data released Friday by China's National Bureau of Statistics.


China PBOC Keeps Key Policy Rates Unchanged

China's central bank kept its key policy rates unchanged on Friday while injecting fresh liquidity into the financial market.

The People's Bank of China held the interest rate of the one-year medium-term lending facility steady at 2.85% and the seven-day reverse repurchase agreement rate unchanged at 2.1%, according to a brief statement on its website.


Sri Lanka's Parliamentary Speaker Accepts President's Resignation

COLOMBO, Sri Lanka-Sri Lanka President Gotabaya Rajapaksa officially resigned, the country's parliamentary speaker said on Friday, raising hopes the political turmoil around who is in charge of the financially distressed country will inch closer to being resolved.

In a brief statement to reporters, the parliamentary speaker, Mahinda Yapa Abeywardena, a Rajapaksa ally who has served as a conduit for communications from the president in recent days, said the resignation took effect Thursday, when Mr. Rajapaksa sent his resignation letter via email after arriving in Singapore.


Joe Manchin Won't Support Climate, Tax Measures in Economic Package

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07-15-22 0456ET