MARKET WRAPS
Watch For:
Trade for June; Canada Trade for June; Fedspeak from Patrick Harker and Thomas Barkin; Earnings from United Parcel Service, Eli Lilly
Today's Top Headlines/Must Reads:
- New Lending by Mortgage REITs Has Dried Up
- Surprise Stock-Market Rally Bulldozes Bearish Hedge Funds
- Elon Musk Calls Cybertruck Tesla's 'Best Product Ever.' Here Comes the Test.
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Opening Call:
Stock futures were lower on Tuesday as a broad, though fairly mild, risk-off tone was enveloping global markets - and suppressing U.S. equity futures - after weak China trade data heightened concerns about a slowing global economy.
China's exports fell 14.5% for the year to July, while imports slid 12.4%, worse than forecast.
Read Chinese Exports Fall at Steepest Pace Since February 2020
Assets sensitive to China demand were hit, with industrial commodities like crude oil and copper lower. Shares in London-listed miners were under pressure.
Perceived havens were firmer, with the dollar gaining ground and government bonds attracting buyers, pushing Treasury yields lower.
Also weighing on sentiment was a possible downgrade by Moody's of six major U.S. banks, adding to concerns about the fragility of the financial sector as it deals with the sharp rise in interest rates since March 2022.
U.S. Bancorp declined 1.2% and State Street fell 1.2% premarket.
Read Barron's Moody's Raises Alarm on U.S. Banks. It's a Reminder of the Turmoil in March.
More Pre-Market Movers
Beyond Meat fell 16% after second-quarter revenue dropped 30% to $102.1 million and reduced its revenue forecast for the year.
Chegg rose 24% after posting better-than-expected second-quarter sales, and laid out a new AI-focused strategy.
International Flavors & Fragrances fell 21% after cutting its sales forecast for the year.
Lucid reported a wider-than-expected second-quarter loss and sales that missed estimates but rose 3.1% after saying it remained on track for production of more than 10,000 units in 2023.
Palantir Technologies was up 0.3% after reporting second-quarter adjusted earnings and revenue that met analysts' estimates and raising its financial guidance.
Paramount Global was rising 4% after it agreed to sell book publisher Simon & Schuster to KKR for $1.62 billion in cash.
RingCentral said founder Vlad Shmunis would be stepping down as chief executive later this month and transitioning to executive chairman. Shares fell 13%.
Forex:
The dollar edged higher on safe-haven demand as stocks faltered following weak Chinese trade data.
The currency didn't get much of a lift after the Fed's Michelle Bowman said on Monday that more interest-rate hikes would likely be needed, and Commerzbank said economic data are currently more important for the dollar than Fed comments.
"Only if we know this data, comments like the ones made by Bowman can be relevant for dollar exchange rates," it said.
Thursday's inflation data in particular will be closely watched, Commerzbank added.
Energy:
Oil prices declined in Europe after the Chinese economic data.
"China trade numbers for July continued to point to weak economic activity and subdued domestic demand," CMC Markets said.
"With numbers this poor it surely can't be too long before Chinese policymakers take further steps to support their economy."
Metals:
Base metal and gold prices were falling in early London trading as weak economic data from China continued to signal poor demand for industrial goods.
The drop in exports highlights how "the world's second biggest economy is being dragged lower by weakness in global demand and a domestic slowdown," Deutsche Bank said.
TODAY'S TOP HEADLINES
SoftBank Posts Another Loss Despite Technology-Share Rebound
TOKYO-Japanese technology investor SoftBank Group on Tuesday reported its third straight quarter of net losses despite a rebound in technology shares helping its investment portfolio return to profit.
SoftBank posted a net loss of 477.6 billion yen, equivalent to about $3.3 billion, for the quarter ended June 30. That compares with a Yen3.163 trillion net loss in the same period a year earlier.
Bacardi's Russia Business Grows as Other Booze Makers Leave Country
Shortly after the invasion of Ukraine, Bacardi said it had paused exports to Russia. Since then, the liquor company has sent millions of dollars of products to the country and has been advertising for new employees.
Continuing to bring in brands such as Grey Goose vodka, Martini vermouth and its namesake Bacardi rum helped the family-owned company report a rise in sales and profit in Russia for last year at the same time many of the world's biggest booze brands have beaten a costly retreat from the country.
Charlie Ergen Nears Deal to Merge Dish, EchoStar
Charlie Ergen is nearing a deal to merge his major holdings, Dish Network and EchoStar, a move aimed at giving him the financial flexibility to build a nationwide wireless network strong enough to take on the likes of AT&T and Verizon.
A deal could be announced as soon as Tuesday, barring any last-minute snags, according to people familiar with the matter.
China Auto Sales Slid in July on Weak Consumer Confidence, High Base
China's vehicle sales slid in July, crimped by a high base a year earlier and weak consumer confidence that weighed on purchases, though exports remained robust.
Retail sales of passenger cars in the world's biggest auto market dropped 2.3% to 1.77 million vehicles last month, the China Passenger Car Association said Tuesday. The result was in line with the association's expectation, given last year's high base.
China Reassures Russia on Ukraine After Meeting With Others on How to End the War
SINGAPORE-China's top diplomat assured Russia that Beijing hasn't wavered in its stance on the Ukraine war, right after a Chinese envoy joined a multilateral forum-which excluded Moscow-to discuss ways to end the conflict.
In a Monday call, Chinese Foreign Minister Wang Yi and his Russian counterpart, Sergei Lavrov, affirmed the strong partnership between their governments and promised to keep working together to resist Western efforts to contain their countries' development, according to readouts from both foreign ministries.
Biden to Designate New National Monument to Protect Land Near Grand Canyon
President Biden plans to designate a new national monument that would protect lands near the Grand Canyon, a move that has been opposed by the mining industry.
The Baaj Nwaavjo I'tah Kukveni - Ancestral Footprints of the Grand Canyon National Monument in northern Arizona will cover more than 900,000 acres of public land. Biden, who is in Arizona as part of a three-state tour, will designate the monument on Tuesday.
Why Democrats Lost Iowa
Just about every Republican presidential candidate plans to attend the Iowa State Fair that begins in Des Moines this week. But don't expect to see President Biden there.
Iowa was once a center of gravity for both political parties during presidential elections and a key swing state. In recent years, it has turned so red that Democrats have little political power in the state and the party's candidates have few reasons to go.
Trump's Lawyers Argue Protective Order Would Violate His Free-Speech Rights
WASHINGTON-Donald Trump's lawyers on Monday clashed with prosecutors over how much evidence the former president should be able to access in the federal case charging him with conspiring to overturn his 2020 election loss, the first of many expected battles over free speech and the integrity of the sprawling probe.
In dueling court filings, Trump's team said prosecutors' request to prevent him from publicly airing any evidence violates his First Amendment rights, while prosecutors accused the defense of trying to let Trump "try this case in the media rather than in the courtroom."
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Altius Minerals 2Q
Barrick Gold 2Q
Bitfarms 2Q
Coveo Solutions 1Q
Cronos 2Q
Dexterra 2Q
Element Fleet Mgmnt 2Q
Endeavour Silver 2Q
Finning 2Q
Franco-Nevada 2Q
GDI Integrated Facil 2Q
Great-West Lifeco 2Q
Heroux-Devtek 1Q
Hudbay Minerals 2Q
Innergex Renewbl En 2Q
K-Bro Linen 2Q
https://urldefense.com/v3/__http://kneat.com__;!!F0Stn7g!HzJY0lBI-pjs0vgmG1BqvKx75hnQrVUYDB_IbQqYLos-TPEwj-CIv2vVk8ozRGAr96rJoxCuoZwBimFKc5mUDUGNgKn7dILYlCjtLwkUxQM$ 2Q
Pet Valu 2Q
Restrant Brands 2Q
Stingray 1Q
Sun Life Fincl 2Q
Triple Flg Prcs Mtls 2Q
VerticalScpe 2Q
Westport Fuel 2Q
WSP Global 2Q
Economic Calendar (ET):
0830 Jun International merchandise trade
Stocks to Watch:
BTB Real Estate 2Q Rev C$31.7M; 2Q EPS C$0.125
Expected Major Events for Tuesday
04:30/JPN: Jul Corporate Insolvencies
05:00/JPN: Jul Economy Watchers Survey
06:00/GER: Jul CPI
06:45/FRA: Jun Foreign trade
06:45/FRA: Jun Balance of payments
08:59/JPN: Jun Provisional Labour Survey - Earnings, Employment & Hours Worked
10:00/US: Jul NFIB Index of Small Business Optimism
12:30/CAN: Jun International merchandise trade
12:30/US: Jun U.S. International Trade in Goods & Services
12:55/US: 08/05 Johnson Redbook Retail Sales Index
14:00/US: Aug IBD/TIPP Economic Optimism Index
14:00/US: Jun Monthly Wholesale Trade
20:30/US: 08/04 API Weekly Statistical Bulletin
23:50/JPN: Jul Money Stock, Broadly-defined Liquidity
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Tuesday
Allete Inc (ALE) is expected to report $0.80 for 2Q.
Amicus Therapeutics Inc (FOLD) is expected to report $-0.11 for 2Q.
Atkore Inc (ATKR) is expected to report $3.97 for 3Q.
CONSOL Energy Inc (CEIX) is expected to report $4.89 for 2Q.
Clearway Energy Inc - Class C (CWEN) is expected to report $0.72 for 2Q.
Consolidated Communications Holdings Inc (CNSL) is expected to report $-0.09 for 2Q.
(MORE TO FOLLOW) Dow Jones Newswires
08-08-23 0620ET
