Pandemic pressures put markets off balance

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Weekly Market Update: Pandemic pressures put markets off balance

2021-09-10T16:05:54.947

Equity markets took a breather this week, digesting recent gains and absorbing fresh commentary about the effects of the Delta Covid wave from various corporate and government leaders. Meanwhile inflation data came in slightly hotter than expected with the August PPI one tenth higher than expected at 8.3% y/y. President Biden announce more big initiatives including expanding vaccine mandates and a goal for vastly increasing solar electricity production over 30 years. China continued its campaign to tighten the screws on domestic companies that operate or trade globally, but a bilateral teleconference between Biden and Xi injected some hope that Sino-American relations can get on a more constructive track. Gulf of Mexico oil operations continue to slowly get back online, though about two-thirds of oil production in the Gulf remained shut as of Friday. Crude oil prices remained in a tight range for the week, holding within striking distance of $70/bbl, while Friday’s WASDE crop report showed higher corn and soybean stocks than expected, creating some marked volatility in soft commodities. As expected, the ECB announced a modest slowdown in its bond purchase program, but ECB chief Lagarde insisted that the move was a recalibration of stimulus and not tapering. The US dollar was modestly higher on the week and gold was more than 2% lower. For the week, the S&P fell 1.7%, the DJIA lost 2.2%, and the Nasdaq slipped 1.6%.

In a series of financial conferences and disclosures this week, executives across many industries noted continued inflationary pressures from pandemic related supply chain shortages and costs linked to Covid mitigation efforts. Notably, Tyson Foods said it plans to boost beef prices amid high demand and labor shortages. Major airlines warned that the Delta variant would temper the industry’s near-term outlook, as travel bookings decelerate and cancellations rise. The news wasn’t much sunnier on the automakers’ side: Daimler estimated that the semiconductor shortage could last throughout next year and into 2023, while Toyota again cut its FY21 production guidance and GM extended the shutdown of one Michigan plant following a Chevy Bolt recall announcement. PPG guided production lower for Q3 due to increasing disruptions in commodity supplies. Apple shares dropped on Friday afternoon after a judge struck down some of its in-app payment rules as part of the ruling in its dispute with Epic Games.


SUN 9/5
(CN) China regulators to tighten supervision on financial services industry and electric vehicles - press

MON 9/6
DAI.DE Exec: Chip shortage could last throughout next year and into 2023 - Munich show comments

TUES 9/7
DTE.DE Tele2 and Deutsche Telekom divest T-Mobile Netherlands to the Apax funds and Warburg Pincus for €5.1B
7203.JP Exec: Sees investment related to development of battery supply system and R&D to be ~¥1.5T by 2030; plans to use solid-state batteries in hybrid EVs
*(DE) GERMANY SEPT ZEW CURRENT SITUATION SURVEY: 31.9 V 34.0E; EXPECTATIONS SURVEY: 26.5 V 30.5E
*(EU) EURO ZONE Q2 FINAL GDP Q/Q: 2.2% V 2.0%E; Y/Y: 14.3% V 13.6%E
MAERSKB.DK CEO: Consumer demand must ease to end supply chain crisis - FT interview
FAST Reports Aug net sales $531.1M +14.2% y/y
PPG Expects Q3 sales volume lower by $225-275M versus expectations, withdraws guidance; Sales volumes impacted by the increasing disruptions in commodity supplies
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: +4.0% v +0.3% prior
INTC CEO: planning to make European chip plant investment valued as high as €80B - Munich Car Forum comments
COIN CEO tweets: SEC wants to sue company over lending practices; Served with Wells Notice on Sept 1st

WEDS 9/8
(EU) ECB's Holzmann (Austria; hawk): sees potential significant upside inflation risks; could be able to normalize policy sooner than previously thought
(US) Pres Biden to announce plan to shift nation's electricity production to 45% solar (from 4% currently) by 2050 - NYT
*(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 0.25%; AS EXPECTED, maintains QE bond buying at $2.0B/week
*(US) TREASURY'S $38B 10-YEAR NOTE REOPENING DRAWS 1.338%; BID-TO-COVER RATIO: 2.59 V 2.39 PRIOR AND 2.41 OVER THE LAST 8 REOPENINGS
*(US) JULY CONSUMER CREDIT: $17.0B V $25.0BE
CVX Chevron and Caterpillar enter collaboration agreement on hydrogen
LULU Reports Q2 $1.65 v $1.21e, Rev $1.45B v $1.33Be; Raises guidance
TSN To increase beef prices; Rejects conclusions drawn by Whitehouse

THURS 9/9
(US) Reportedly ~80% of US oil and gas production in the Gulf of Mexico still remains offline because of Hurricane Ida impact - US financial press
F Confirms Ford India to cease manufacturing vehicles for sale in India immediately; Sees pretax charge of ~$2.0B in following years; Plans to expand its Business Solutions team in India significantly
UAL Cuts Q3 Rev -33% v Q3'19, Capacity -28% v Q3'19 (prior -26%) citing deceleration in customer bookings for travel in last few weeks - filing
LUV Cuts again Q3 outlook citing softness in bookings and elevated trip cancellations, especially close-in; Aug and Sept trends make it difficult for company to be profitable in Q3 - filing
(JP) Japan PM Suga reportedly will be running in upcoming general election as a member of Parliament - Japan press
*(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED
ASO Reports Q2 $1.99 v $2.25 y/y, Rev $1.79B v $1.74Be; Raises guidance
*(US) INITIAL JOBLESS CLAIMS: 310K V 335KE (post pandemic low); CONTINUING CLAIMS: 2.78M V 2.73ME
(EU) ECB chief Lagarde: Today's decision was unanimous; shift in PEPP is recalibrating stimulus and not tapering - Q&A
GM Reportedly extending shut down of Michigan facility follow Bolt recall announcement - press
NESN.CH Exec: Likely that input cost inflation will be higher next year than this year - Barc conf comments
*(US) DOE CRUDE: -1.5M V -2.5ME; GASOLINE: -7.2M V -3ME; DISTILLATE: -3.1M V -2.5ME
(US) Fed's Evans (dove, voter): Not out of the woods yet but in a better place than a year ago
(US) Fed's Kaplan (non-voter; hawkish): Supply and demand imbalance may last longer
*(US) TREASURY $24B 30-YEAR BOND REOPENING DRAWS 1.910%; BID TO COVER 2.49 V 2.19 PRIOR
MSFT Said that Microsoft will indefinitely delay return to office for workers - Press
(US) White House issues readout of call between President Biden and China President Xi from Sept 9th; US not seeking specific outcomes or agreements from the call [first call between the 2 leaders since Feb]

FRI 9/10
7203.JP Cuts again FY21 Production guidance 3.2% to 9.0M units (prior 9.3M) citing coronavirus impact in Southeast Asia and parts shortages in Sept and Oct; Cuts Sep and Oct production
GAZP.RU CEO: fully completes Nord Stream 2 construction
(UA) Ukraine President Zelensky: there is a possibility of a war with Russia; Interested in a substantive meeting with Russian Pres Putin
(US) Aug PPI Final Demand M/M: 0.7% v 0.6%e; Y/Y: 8.3% v 8.2%e
(US) FDA spokesperson: FDA will follow the science on vaccinations for young children; Hope to be able to have pediatric vaccines available in the coming months
(CN) Biden administration reportedly considering a China trade probe in an effort to pressure Beijing govt – press
US Judge issues ruling in EPIC Games antitrust lawsuit against Apple; Grants EPIC an injunction

Markets unperturbed by stagflation signals

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Weekly Market Update: Markets unperturbed by stagflation signals

Fri, 03 Sep 04:21 PM EST/09:21 PM GMT

US equity indices continued to ride into uncharted territory for much of this week. Despite lingering concerns related to the pandemic and potential Fed tapering, equity markets remained attractive relative to the paltry yields offered by government bonds in many investors’ minds. PMI readings and economic data in general continued to moderate from the recent highs, culminating in a softer than expected August US employment report on Friday. Monthly payroll numbers came in well short of expectations, suggesting the Delta variant has resulted in headwinds for the jobs recovery, causing some to argue that the softer report gave the Fed further cover to remain patient. On the other hand, wages jumped notably and the unemployment rate dipped, causing others to infer that steepening seen along the US treasury yield curve after the jobs data release suggested bond traders were betting that the Fed is in a bind because its policies have opened the door to a stagflation environment. Rates move up globally after the report, the US dollar remained weak, and gold neared the best levels in more than a month. Bitcoin topped 50K and Etherium tested 4K following a week of more eye popping NFT sales. WTI crude prices firmed back towards the $70 level after OPEC+ producers announced they will follow through with plans to bring an additional 400K bpd of supply back onto the market next month. For the week, the S&P rose 0.6%, the DJIA dipped 0.2%, and the Nasdaq rose 1.6%.

In corporate news this week, The Department of Justice was said to be preparing a second antitrust lawsuit against Google, targeting its ad technology business. Daimer’s CEO said Q3 vehicle sales would be below Q2 levels due to the ongoing semiconductor chip shortage. Apple announced as a concession to Japanese regulators that it would now allow developers of ‘reader apps’ to link to their own websites for payment, and the news sent Spotify higher. US regulators threw a wrench into Canadian National’s plans to acquire Kansas City Southern, ruling that CNI cannot complete a deal using a voting trust that had been key to the potential acquisition. Some reports late in the week indicated the KSU board would reopen talks with rival bidder Canadian Pacific and would deem the CP deal as likely to lead to a superior offer. Zoom shares fell after reporting results despite an outlook raise as investors fretted over a deceleration of growth and some signs the videoconference software may be losing ground to Microsoft. Alaska Airlines disclosed that its bookings trends have deteriorated moderately as the COVID Delta variant continues to affect air travel.


SUN 8/29
The C.1.2 variant, first detected in South Africa, is more mutated compared to original virus than any other known variant; Poses concerns it could be more infectious and evade vaccines - The Jerusalem Post
PFE New Zealand reports first death of a woman related to getting her COVID vaccine - press

MON 8/30
*(DE) GERMANY AUG CPI NORTH RHINE WESTPHALIA M/M: 0.1% V 0.8% PRIOR; Y/Y: 4.2% V 4.1% PRIOR
FUL Implements 11% surcharge to recover significant cost increases in raw materials and related services, effective immediately
*(DE) GERMANY AUG PRELIMINARY CPI M/M: 0.0% V 0.1%E; Y/Y: 3.9% V 3.9%E (highest annual pace since 1993)
*(US) JULY PENDING HOME SALES M/M: -1.8% V 0.3%E; Y/Y: -9.5% V -8.8%E
*(US) AUG DALLAS FED MANUFACTURING ACTIVITY INDEX: 9.0 V 23.0E
ZM Reports Q2 $1.36 v $1.16e, Rev $1.02B v $982Me; Raises guidance
*(CN) CHINA AUG MANUFACTURING PMI (GOVT OFFICIAL): 50.1 V 50.2E (17th month of expansion and lowest since Feb 2020)

TUES 8/31
(TW) Said that DRAM Spot prices are falling 'rapidly' in August, could set contract prices for Q4 on downward pressure - Digitimes
*(FR) FRANCE AUG PRELIMINARY CPI M/M: 0.6% V 0.4%E; Y/Y: 1.9% V 1.7%E
*(DE) GERMANY AUG NET UNEMPLOYMENT CHANGE: -53.0K V -40.0KE; UNEMPLOYMENT CLAIMS RATE: 5.5% V 5.6%E (17 month low)
*(DE) GERMANY AUG NET UNEMPLOYMENT CHANGE: -53.0K V -40.0KE; UNEMPLOYMENT CLAIMS RATE: 5.5% V 5.6%E (17 month low)
*(EU) EURO ZONE AUG ADVANCE CPI ESTIMATE Y/Y: 3.0% V 2.7%E; CPI CORE Y/Y: 1.6% V 1.5%E (highest annual pace since 2011)
(KR) South Korean Parliament passes revision of telecom business act aiming to curb Google and Apple's in-app billing policy; Requires alternatives - press
(EU) ECB's Holzmann (Austria; hawk): ECB in position to think about reducing pandemic aid - conference comments
(US) Colonial Pipeline restarts main gasoline and distillate lines post-Hurricane Ida - press
*(US) AUG CHICAGO PURCHASE MANAGERS INDEX (PMI): 66.8 V 68.0E
*(US) AUG CONSUMER CONFIDENCE: 113.8 V 123.0E (lowest since Feb)
GOOGL Postpones voluntary return to office for workers until Jan 10th vs September prior - press
KSU Canada National proposal for a voting trust has been denied by Surface Transportation Board; STB delays ruling on CN Railway trust as part of KSU deal - press
AMBA Reports Q2 $0.35 v $0.25e, Rev $79.3M v $75.5Me; Guides Q2 strong
PVH Reports Q2 $2.72 v $1.19e, Rev $2.31B v $2.14Be; Raises guidance for 3rd time
Spot prices for DRAM recently decline, cites forecast of weaker demand; notes data from DRAMeXchange - Yonhap

WEDS 9/1
(HK) Macau Aug Casino Rev (MOP): 4.44B v 8.4B prior; Y/Y: 234% v 176%e
*(EU) EURO ZONE JULY UNEMPLOYMENT RATE: 7.6% V 7.6%E
(EU) European Securities and Markets Authority (ESMA): With current high valuations, markets face possibly significant corrections - financial press
(CN) China President Xi: China facing significantly more risks and challenges
CPB Reports Q4 $0.55 v $0.47e, Rev $1.87B v $1.82Be; Guides init FY22 organic sales ~ flat, EBIT down -8% to -4%
BF.B Reports Q1 $0.40 v $0.40e, Rev $906M v $852Me; Cuts FY22 margins outlook citing higher input costs related to agave, transportation costs, and commodity prices
*(US) AUG ADP EMPLOYMENT CHANGE: +374K V +638KE
(DE) Germany Health Min Spahn: calls on China to cooperate with resolving the Covid pandemic
*(US) AUG FINAL MARKIT MANUFACTURING PMI: 61.1 V 61.2E (confirms 14th consecutive month of expansion)
*(US) AUG ISM MANUFACTURING: 59.9 V 58.5E; PRICES PAID: 79.4 V 84E
*(US) DOE CRUDE: -7.2M V -3ME; GASOLINE: +1.3M V -1.5ME; DISTILLATE: -1.7M V 0ME (Crude stocks fall to lowest since Sept 2019)
OPEC+ producers confirm agree to keep production road map of 400K bpd capacity increase in Oct
COST Reports Aug total SSS +9.1% (ex-gas and FX)
GOOGL DOJ reportedly preparing antitrust lawsuit over ad technology business; Would be a second separate antitrust suit against Google - press
AAPL To make update to App Store that will close investigation by the Japan Fair Trade Commission

THURS 9/2
AAPL Said to be in talks with Japan and South Korea suppliers for new Apple Car; Could start mass production of Apple Cars in partnership with Kia Motors by 2024 - press
DAI.DE CEO: Q3 vehicle sales to be below Q2 level due to semi-conductor chip shortage
(CN) China said to strengthen review of game content, following play time limits last week - press
*(US) Q2 FINAL NONFARM PRODUCTIVITY: 2.1% V 2.5%E; UNIT LABOR COSTS: 1.3% V 0.9%E
(US) Atlanta Fed GDPNow: Cuts Q3 GDP forecast to 3.7% from 5.3%
(US) Sen Manchin (D-WV): Senate should hit 'pause' on the $3.5T spending plan - comments in WV
DOCU Reports Q2 $0.47 v $0.39e, Rev $511.8M v $482Me; Raises FY22 outlook
AVGO Reports Q3 $6.96 v $6.88e, Rev $6.78B v $6.76Be
ALK Discloses bookings trends have deteriorated moderately; Cuts Q3 load factor 79-81% (prior 82-85%) - filing
(JP) Japan PM Suga said to not stand for re-election in leadership election and has indicated intent to resign - financial press

FRI 9/3
(JP) Japan PM Suga confirms will not run for LDP Leadership
(DE) Germany Health Min Spahn: must make sure the health system is not overloaded
(TR) Turkey Aug CPI M/M: 1.1% v 0.7%e; Y/Y: 19.3% v 18.8%e
*(FR) FRANCE AUG FINAL PMI SERVICES: 56.3 V 56.4E (confirms 5th straight expansion)
*(DE) GERMANY AUG FINAL PMI SERVICES: 60.8 V 61.5E (confirms 4th month of expansion)
*(UK) AUG FINAL PMI SERVICES: 55.0 V 55.5E (confirms 6th month of expansion)
*(EU) EURO ZONE JULY RETAIL SALES M/M: -2.3% V 0.0%E; Y/Y: 3.1% V 4.5%E
*(US) AUG UNEMPLOYMENT RATE: 5.2% V 5.2%E
*(US) AUG CHANGE IN NONFARM PAYROLLS: +235K V +725KE (below lower-end of analyst expectations)
*(US) AUG AVERAGE HOURLY EARNINGS M/M: 0.6% V 0.3%E; Y/Y: 4.3% V 3.9%E
(US) AUG ISM SERVICES INDEX: 61.7 V 61.7E

Powell keeps markets calm ahead of impending QE taper

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Weekly Market Update: Powell keeps markets calm ahead of impending QE taper

2021-08-27T16:14:56.68

Stocks got off to a good start this week, boosted in part by confirmation the FDA removed the emergency use label from the Pfizer Covid vaccine. Concerns about surging Delta variant transmissions and rising hospitalizations in some regions receded as the news offered some hope vaccination rates will rise. The S&P and NASDAQ hit new all-time highs early in the week with the Composite topping 15K for the first time. Also, equity strength was repeatedly pinned, at least partially, on growing doubts Chairman Powell would formally signal the start of tapering Fed asset purchases later in the week. That narrative received further support from the release of the softest August Richmond Fed reading since early last summer. Nevertheless, Fed hawks were out in force calling for the Fed to begin tapering asset purchase this fall in hopes that it will be completed by next spring. Key inflation readings remained elevated here while overseas the Bank of Korea unexpectedly raised rates for the first time since 2018. US Treasury yields drifted steadily higher ahead of Powell’s speech on Friday.

On Thursday, US markets saw a brief bout of equity weakness following initial reports of a suicide bomber attack at the gate of Kabul airport resulting in mass casualties including 13 US servicemen killed. By Friday, much of the focus was back on the Fed. As the market has become accustomed to, Powell’s remarks were significantly more measured then what we have heard from the hawks. He emphasized that, though the threshold of ‘substantial further progress’ has been met on inflation, there is still a ways to go on employment. He added he has yet to see any real signs of rampant wage inflation, while also highlighting some inflation indicators have begun to turn down, notably used car prices. He acknowledged tapering assets purchase could be appropriate this year, but failed to solidify a likely announcement next month as some hawks may have liked. The dollar slipped, stocks added to gains and rates held modestly lower in the wake of his comments. For the week, the S&P rose 1.5%, the DJIA gained 1%, and the Nasdaq surged 2.8%.

In corporate news, Best Buy reported strong Q2 results as US same store sales growth remained north of 20% while also raising its outlook for the year. Reports surfaced that Taiwan Semi is set to raise prices for its most advanced chips by roughly 10% and less advanced chips by 20%. That news sparked speculation that Apple, one of TSMC’s largest customers, iPhone 13 launch coming next month will include significantly higher price tags as management looks to pass along those rising component costs. Homebuilder Toll Brothers reported another quarter of robust results and singled it just put through another nationwide price hike this week. Western Digital was reported to be in late stage merger talks with Japan's Kioxia that could valued at $20B or more. Corporate leaders were emboldened by the FDA’s full approval of the Pfizer vaccine, leading many companies to announce stricter vaccination requirements, including Delta Airlines which will impose $200 monthly increase on health insurance premiums for workers who are not vaccinated.


SUN 8/22
PFE Pfizer-Biontech Covid-19 vaccine granted full US FDA approval in individuals 16 years of age and older; EUA remains for individuals 12 through 15 years of age and for administration of third dose in certain immunocompromised individuals
(DE) ECB's Schnabel (Germany): Reiterates stance that expect inflation to keep rising until the end of 2021 especially in Germany, but then see CPI falling "significantly" in 2022 - German press

MON 8/23
(EU) EURO ZONE AUG PRELIMINARY MANUFACTURING PMI: 61.5 V 62.0E (14th month of expansion but lowest reading since Feb 2021)
(DE) GERMANY AUG PRELIMINARY MANUFACTURING PMI: 62.7 V 65.0E (14th month of expansion but lowest reading since Feb 2021)
(UK) AUG PRELIMINARY MANUFACTURING PMI: 60.1 V 59.5E (15th straight expansion but lowest reading since Mar 2021)
(US) JULY EXISTING HOME SALES: 5.99M V 5.83ME

TUES 8/24
(US) AUG RICHMOND FED MANUFACTURING INDEX: 9 V 24E (lowest reading since June 2020)
(US) JULY NEW HOME SALES: 708K V 697KE
(US) House passes rule adopting $3.5T budget resolution and advancing $1.2T infrastructure package and John Lewis voting rights bill
Taiwan Semi: Increasing prices for advanced and mature process technologies by up to 20% [includes ~10% price increase for sub-16nm process manufacturing], effective starting in 2022 - Digitimes
BMY Reports Q2 $2.98 v $1.91e, Rev $11.8B v $11.6Be; raises outlook

WEDS 8/25
(DE) GERMANY AUG IFO BUSINESS CLIMATE SURVEY: 99.4 V 100.4E
(KR) BANK OF KOREA (BOK) RAISES 7-DAY REPO RATE BY 25BPS TO 0.75%; NOT EXPECTED (1st hike since Nov 2018)
DAL Notifies employees that they will face $200 monthly increases on their health insurance premiums starting Nov. 1 if they aren’t vaccinated against Covid-19 - CNBC
CRM Reports Q2 $1.48 v $0.91e, Rev $6.34B v $6.23Be; raises outlook

THURS 8/26
(US) Q2 PRELIMINARY GDP ANNUALIZED Q/Q: 6.6% V 6.7%E; PERSONAL CONSUMPTION : 11.9% V 12.2%E
Large explosion reported outside of Kabul Airport; Casualties include 13 US servicemen

FRI 8/27
(CN) China said to consider proposing rules in Q4 that bans certain foreign company listings if they have large amounts of sensitive consumer data - financial press
(US) JULY PCE DEFLATOR M/M: 0.4% V 0.4%E; Y/Y: 4.2% V 4.1%E
(US) Tropical Storm Ida strengthens, passes through Cayman Islands - NHC
(US) Fed Chair Powell: Cannot take for granted transitory inflation will fade; Still considerable remaining ground to achieve full employment - Jackson Hole speech
(US) National Hurricane Center (NHC): Tropical Storm Ida is now a hurricane, could reach category 3 before making landfall
(US) Atlanta Fed GDPNow: Cuts Q3 GDP forecast to 5.1% from 5.7%

Delta Variant and Growth Signals Spur Some Uneasiness

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Weekly Market Update: Delta Variant and Growth Signals Spur Some Uneasiness

2021-08-20T16:03:29.59

Stock markets were roiled for much of this week by concerns that the sustained uptick in Covid-19 infections globally and a slowdown in China's growth could impede the economic recovery. Questions surrounding the lasting efficacy of current Covid vaccines against the newest variants, alongside new lockdowns in Asia, led to more hand-wringing that the pandemic will put further pressure on global supply chains and potentially sustain the rise seen in prices. Those inflation worries and the Federal Reserve's signaling that it will scale back some of its easy money policies remained an impediment to investor sentiment overall. Also, the US’s clumsy troop withdrawal from Afghanistan, underscored by the easy toppling of Kabul by the Taliban, sparked concerns that the growing criticism of the Biden Administration could reduce the amount of fiscal measures the Democrats will ultimately be successful in pushing through Congress.

Growth worries were clearly fanned by deceleration in economic data. Monday investors pondered key Chinese economic readings that came in well below market expectations over the weekend. US Aug Empire Manufacturing was significantly below expectations, which was followed up by very disappointing July retail sales figures. Philly Fed and housing data also showed slowdowns. Many economists lowered Q3 GDP forecasts in unison. Federal Reserve speak suggested officials largely continue to believe that the “substantial” progress needed to commence tapering is nearing, while also emphasizing they are paying close attention to the Delta variant. US indices rebounded sharply on Friday into options expiration. WTI crude traded down for its seventh consecutive session (the longest streak since February 2020), hitting its lowest level since May. The Dollar index traded to a 9-month high above 93.50 while cryptocurrencies saw a significant rally intensify, pushing Bitcoin back towards $50K. For the week, the S&P dropped 0.6%, Dow fell 1.1%, and the NASDAQ lost 0.7%.

In corporate news this week, Home Depot profit beat estimates, though same store sales numbers disappointed and customer transactions were down year on year. Retailers Walmart and Target saw Q2 sales and earnings rise, driven by strong grocery sales and a confident start to back-to-school season. Japan’s largest automaker Toyota Motor said it would have to cut its production by 40% in September due to the ongoing semiconductor shortage. US regulators reportedly opened a formal probe of Tesla’s Autopilot feature, citing a swath of collisions with parked emergency vehicles. T-Mobile confirmed that data from over 10M customer accounts had been stolen, along with 40M records of former or prospective customers who had previously applied for credit. Online trading platform Robinhood reported its first results as a publicly traded company, sending shares lower after warning that it sees a deceleration in trading activity in coming quarters. The FTC filed an amended complaint against Facebook, accusing the social media giant of acquiring competitors and thwarting access to their platform. Endo International shares dropped sharply on reports it hired a financial restructuring adviser to evaluate its options amid a deluge of lawsuits alleging it contributed to the opioid crisis.

SUN 8/15
(US) UN Security Council to meet on Monday, Aug 16th at 10:00EST (14:00GMT) on Afghanistan; Kabul falls to Taliban as president flees - press
BHP.AU Confirms considering options for petroleum business, including deal with Woodside (as speculated in press); no deal yet

MON 8/16
(US) Fed officials reportedly weigh ending asset purchases by mid-2022 - US financial press
TSLA US said to open formal investigation of Tesla Autopilot citing collisions with parked emergency vehicles - press
*(US) AUG EMPIRE MANUFACTURING: 18.3 V 28.5E
H To acquire resort operator Apple Leisure Group from KKR and KSL Capital Partners for $2.7B in cash
OPEC+ sources: OPEC+ sees no need to release more oil into the market right now beyond what has already been planned amidst calls from the US to raise output - press
(US) Reportedly the US will advise coronavirus vaccine boosters to be taken 8 months after vaccination, could offer boosters to non immune compromised individuals in mid Sept - NYT

TUES 8/17
(NZ) New Zealand PM Ardern: Country to enter into 3 day lockdown and raises alert level 4 (highest level) as off Tuesday (Aug 17th) at midnight
*(EU) EURO ZONE Q2 PRELIMINARY GDP Q/Q: 2.0% V 2.0%E; Y/Y: 13.6% V 13.7%E
HD Reports Q2 $4.53 v $4.41e, Rev $41.1B v $40.7Be
WMT Reports Q2 $1.78 adj v $1.56e, Rev $141.1B v $136.0Be; Raises guidance
*(US) JULY ADVANCE RETAIL SALES M/M: -1.1% V -0.3%E; RETAIL SALES (EX-AUTO) M/M: -0.4% V +0.2%E
*(US) AUG NAHB HOUSING MARKET INDEX: 75 V 80E
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: +0.3% v -1.0% prior
(US) Atlanta Fed GDPNow: Raises Q3 GDP forecast to 6.2% from 6.0%
A Reports Q3 $1.10 v $0.99e, Rev $1.59B v $1.53Be; Raises guidance - + momentum in all markets & regions
2799.HK (CN) Said to to receive ~$7.0B from China State Council for approved recapitalization from CITIC, existing shareholders to take losses on investments

WEDS 8/18
TMUS Confirms data ~8.65M Current customer accounts’ was stolen, containing personal information, including SSN#, driver’s license/ID, DOB info; More than 40M records of former or prospective customers also exposed whom previously applied for credit with TMUS
*(UK) JULY CPI M/M: 0.0% V 0.2%E; Y/Y: 2.0% V 2.3%E (moves back to target)
700.HK Reports Q2 (CNY) adj Net 34.0B v 32.8Be, Rev 138.3B v 138.2Be
*(EU) EURO ZONE JULY FINAL CPI Y/Y: 2.2% V 2.2%E; CPI CORE Y/Y: 0.7% V 0.7%E (Confirms that annual pace moves back above ECB's target)
TGT Reports Q2 $3.64 adj v $3.48e, Rev $25.2B v $25.1Be; Approves new $15B share buyback (12% of market cap)
PLCE Reports Q2 $1.71 v $0.19e, Rev $413.9M v $419Me; Says Q3 off to outstanding start
ZIM Reports Q2 $7.38 v $0.23 y/y, Rev $2.38B v $795M y/y; Doubles guidance outlook
TJX Reports Q2 $0.64 v $0.56e, Rev $12.1B v $11.2Be; Sales are very strong to start Q3 FY22, with overall open-only comp store sales up mid-teens over Q3 FY20; Raises FY22 share buyback by $250M to $1.50B
*(US) JULY HOUSING STARTS: 1.534M V 1.600ME; BUILDING PERMITS: 1.635M V 1.610ME
*(US) DOE CRUDE: -3.2M V -1.5ME; GASOLINE: +0.7M V -2ME; DISTILLATE: -2.7M V 0ME
(US) US health officials: Expect to make Covid vaccine booster shots widely available to Americans starting Sept 20th
(US) Atlanta Fed GDPNow: Cuts Q3 GDP forecast to 6.1% from 6.2%
(US) Fed’s Bullard (non-voter, hawk): Recent data has been slightly weaker but still expects 'very robust' growth up to 7% this year and 4% in 2022 - online event comments
HOOD Reports Q2 -$2.16 v +$0.09 y/y, Rev $565M v $244M y/y; Q2 is first quarter where a larger share of new customers placed their first trade in crypto rather than equities
CSCO Reports Q4 $0.84 v $0.83e, Rev $13.1B v $13.0Be
2799.HK Profit warning: Guides FY20 (CNY) Net loss 102.9B v +1.42B y/y; Confirms bailout from CITIC

THURS 8/19
(US) Goldman analyst cuts US 2021 GDP growth forecast from 8.5% to 5.5% (timing uncertain)
(UK) British public health study has found that protection from either of the two most commonly used COVID-19 vaccines against the now prevalent Delta variant of the coronavirus weakens within three months - financial press
7203.JP Said to be cutting global output by ~40% during Sept from prior plans due to chip shortages and coronavirus - Nikkei
M Reports Q2 $1.29 adj v $0.22e, Rev $5.65B v $5.12Be; Raises outlook 2nd time; Reinstates lower quarterly dividend at $0.15/shr (before $0.377/shr); Announces $500M share repurchase program
KSS Reports Q2 $2.48 v $1.30e, Rev $4.45B v $4.20Be; Raises guidance
*(US) INITIAL JOBLESS CLAIMS: 348K V 364KE (post pandemic low); CONTINUING CLAIMS: 2.82M V 2.80ME
*(US) AUG PHILADELPHIA FED BUSINESS OUTLOOK: 19.4 V 23.1E (lowest since Dec)
INTC CEO: Sees more M&A in chip production, I'm a willing buyer - press
FB FTC reportedly plans to refile monopoly lawsuit against Facebook later in federal court today - press
(CN) China Legislature passes the personal Information Protection Law (PIPL), effective from Nov 1st - Press

FRI 8/20
AZN.UK AZD7442 PROVENT Phase III prophylaxis (non-vaccine) trial met primary endpoint in preventing COVID-19; Reduced the risk of developing symptomatic COVID-19 by 77%
DE Reports Q3 $5.32 v $4.49e, Rev (Equipment Ops) $10.41B v $10.2Be; Raises guidance
(CN) China govt said to possibly ask US IPO-bound companies to hand over data - financial press
(US) US govt extends Mexico and Canada border closing for non-essential travel through Sept 21st
(CN) China Securities Regulatory Commission (CSRC) said to plan to create conditions for audit cooperation with US in order to stabilize growth of Hong Kong capital markets - press
(US) Fed's Kaplan (non-voter; hawkish): The big imponderable is the path of the Delta virus; If Delta is having more negative effect on GDP growth, it could cause me to adjust my views - Fox Business interview

Markets remain strong, defying Delta fears

TradeTheNews.com 

Weekly Market Update: Markets remain strong, defying Delta fears

2021-08-06T16:07:52.393

Trading opened this week amid lingering concerns about the spreading Delta variant and its potential impacts on global growth. US government officials and corporate executives introduced new safety requirements and stepped up incentives to convince more people to get vaccinated and return to wearing masks. Also, certain pandemic-sensitive businesses indicated the Delta variant has begun to have a negative impact on their most recent booking trends. Those Covid concerns initially weighed on Treasury yields while stock indices held near all-time highs. Wednesday’s weak ADP employment number helped push the US 10-year back towards the Feb lows around 1.12% before a strong ISM services print reversed that course later in the session.

Wednesday, the Bank of England laid out parameters that will need to be met in order to commence tapering. Most notably MPC members wanted to see the Bank Rate rise to 0.5% before acting. The announcement was sandwiched between comments from several US Federal Reserve hawks. Vice Chairman Clarida headlined several FOMC members who stepped up their calls to commence tapering sooner, while expressing continued concerns about the potential stickiness of rising inflation. Those views were subsequently bolstered by Friday’s very robust July jobs report which surpassed expectations by a wide margin. Treasury yields pushed higher along with the dollar and metals prices slipped. Growth stocks lagged, holding back the NASDAQ, while banks and cyclical groups responded positively to higher interest rates. For the week, the S&P gained 0.9%, the DJIA added 0.8%, and the Nasdaq rose 1.1%.

In corporate news this week, Uber saw a bigger than expected EBITDA loss as driver incentive costs weighed on profits despite increased ridership. Rival Lyft posted its first quarterly profit on increased ridership and steadier costs. Clorox shares touched their lowest level since the pandemic started after missing on sales and guiding below consensus. Cigna beat on the top and bottom line but its cost concerns dragged healthcare names lower mid-week. Expedia’s earnings pointed to impacts in July from the Delta variant, amid growing uncertainty in the travel industry. Royal Caribbean and Norwegian Cruises also noted they have seen some recent impact from the renewed COVID spread. Square acquired Australia-based firm Afterpay for $29B as the payments company pushed into the lucrative 'buy now, pay later' space.


SUN 8/1
(HK) Macau July Casino Rev (MOP): 8.4B v 6.5B prior; Y/Y: 528.1% v 540.5%e (35% of pre-COVID levels)
APT.AU Australia-based 'buy now, pay later' firm Afterpay to be acquired by Square in all-stock deal, implied value of A$39B, A$126.21/shr
SQ Reports Q2 $0.66 adj v $0.32e, Rev $4.68B v $5.02Be
MON 8/2
5.HK Reports Q2 Net $3.39B v $192M y/y, adj Pretax $5.56B v $2.6B y/y, Rev $12.52B v $13.2B y/y; to reduce office space this year
HEIA.NL Reports H1 Net €896M v -€297M y/y, Op €1.63B v 85M y/y, Rev €9.97B v €9.87Be
GPN Reports Q2 $2.04 v $1.89e, Adj Rev $1.94B v $1.85Be; Raises Quarterly dividend 28.2% to $0.25 from $0.195 (indicated yield 0.52%); Enters new collaboration with AWS through Netspend
*(US) JULY FINAL MARKIT MANUFACTURING PMI: 63.4 V 63.1E (13th consecutive month of expansion)
(DE) Germany to begin offering vaccine booster shots beginning in Sept - NY Times
*(US) JULY ISM MANUFACTURING: 59.5 V 60.9E; PRICES PAID: 85.7 V 88.0E
(US) Atlanta Fed GDPNow: raises Q3 GDP forecast to 6.3% from 6.1%
ML.FR Michelin North America raises prices by up to 8% on certain replacement tyres, effective Sep 1st
MAERSKB.DK Reports prelim Q2 EBITDA $5.1B v $4.7Be, Rev $14.2B v $13.8Be; Raises guidance
(US) Treasury quarterly financing estimates: to borrow $673B in Jul-Sep quarter v $600Be (prior estimate to borrow $821B)
(US) Fed's Waller (hawk, voter): Personal opinion is that Fed could make an announcement on taper in Sept; If we get 800K to 1M new jobs in next two jobs reports we will have regained 85% of jobs lost, which is 'significant further progress' - CNBC
COLM Reports Q2 +$0.61 v -$0.12e, Rev $566.4M v $500Me; Raises guidance
NXPI Reports Q2 $1.46 v $2.32e, Rev $2.60B v $2.58Be; Guides Q3 Rev well above ests
SPG Reports FFO Q2 $3.24 v $2.37e, Rev $1.25B v $1.18Be; Raises dividend 7.7%
EMN Reports Q2 $2.46 v $2.32e, Rev $2.65B v $2.40Be; Raises guidance
TUES 8/3
BP.UK Reports Q2 adj Net $2.80B v $2.63Be, Rev $37.6B v $20.8B y/y; Launches $1.4B share buyback and raises dividend 4%
(TR) Turkey July CPI M/M: 1.8% v 1.6%e; Y/Y: 19.0% v 18.6%e
(HK) Macau govt said to have required negative COVID tests for all departures - press
880.HK Reports H1 (HK$) Net -1.47B v -1.41B y/y, Rev 5.22B v 4.37B y/y
IT Reports Q2 $2.24 adj v $1.74e, Rev $1.17B v $1.12Be; Increased the share repurchase authorization by $800M; Raises guidance 2nd time
- Adj EBITDA $355M v $192M y/y
DD Reports Q2 $1.13 v $0.94e, Rev $4.1B v $4.00Be; Raises guidance materially
(US) Fed’s Bullard (non-voter, hawk): More volatile economic regime emerging in US; Monetary policy needs to be more nimble
ETN Reports Q2 $1.72 v $1.55e, Rev $5.22B v $4.97Be; Raises guidance
BABA Reports Q2 $2.57 v $2.25e, Rev $31.9B v $32.7Be; Increases share buyback program by $5B to $15B
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: -1.0% v -2.9% prior
CZR Reports Q2 $0.34 v -$0.26e, Rev $2.5B v $2.29Be; Adj EBITDA $1.0B
(US) Weekly API Crude Oil Inventories: -0.9M v -4.7M prior
LUMN To sell assets of local incumbent carrier operations in 20 states to Apollo Funds for $7.5B (vs ~$5B speculated)
WEDS 8/4
7203.JP Reports Q1 Net ¥897.8B v ¥158.8B y/y, Op ¥997.5B v ¥13.9B y/y; Rev ¥7.94T v ¥4.60T y/y
6758.JP Reports Q1 Net ¥211.8B v ¥193.6B y/y, Op ¥280.1B v ¥221.7B y/y, Rev ¥2.26T v ¥1.96T y/y
*(FR) FRANCE JULY FINAL SERVICES PMI: 56.8 V 57.0E (confirms 4th straight expansion)
*(DE) GERMANY JULY FINAL SERVICES PMI: 61.8 V 62.2E (confirms 3rd month of expansion and record high)
*(UK) JULY FINAL SERVICES PMI: 59.6 V 57.8E (confirms 5th month of expansion)
*(EU) EURO ZONE JUN RETAIL SALES M/M: 1.5% V 1.7%E; Y/Y: 5.0% V 4.4%E
TT Reports Q2 $1.92 v $1.90e, Rev $3.83B v $3.73Be; Raises FY21 Guidance
CVS Reports Q2 $2.42 v $2.07e, Rev $72.6B v $70.1Be; Raises guidance
EMR Reports Q3 $1.09 adj v $0.98e, Rev $4.70B v $4.60Be; Raises guidance
HZNP Reports Q2 $1.62 v $0.91e, Rev $832.5M v $707Me; Raises guidance
(US) SEC Chair Gensler: Repeats cryptos are speculative asset class and we need to provide regulation to avoid broad manipulation - CNBC
*(US) JULY ADP EMPLOYMENT CHANGE: +330K V +683KE (lowest reading since Feb)
(US) Fed’s Bullard (non-voter, hawk): There have been pretty good macroeconomic outcomes despite the pandemic
*(US) JULY ISM SERVICES INDEX: 64.1 V 60.5E
(US) Fed Vice Chair Clarida: If core inflation hits 3% this year, expects would consider it much more than a moderate overshoot of Fed's goal, conditions for raising interest rates could be met by end of 2022
*(US) DOE CRUDE: +3.6M V -2.5ME; GASOLINE: -5.3M V -1.5ME; DISTILLATE: +0.8M V -0.5ME
WDC Reports Q4 $2.16 v $1.46e, Rev $4.92B v $4.51Be; Guides Q1 strong
MELI Reports Q2 $1.37 v $0.09e, Rev $1.70B v $1.50Be
RCII Reports Q2 $1.63 v $1.37e, Rev $1.19B v $1.13Be; Raises guidance materially
COST Reports July total SSS +13.8% (ex-gas)
(US) White House Official: Biden Admin developing plan to require nearly all foreign nationals traveling to the US to be fully vaccinated - press
2282.HK Reports H1 (HK$) Adj EBITDA +116.0M v -885.7M y/y; Rev 2.4B v 257M y/y
THURS 8/5
SIE.DE Reports Q3 Net €1.5B v €535M y/y, Industrial Business EBITA €2.32B v €2.06Be, Rev €16.1B v €14.87Be
(US) Goldman Sachs raises end-2021 S&P 500 target from 4,300 to 4,700
(IL) Israel Defense Min Gantz: Israel is prepared to attack in Iran
(US) Biden Administration said to unveil goal and new car emissions standards later today, on Aug 5th - press
MRNA Reports Q2 $6.46 v $6.01e, Rev $4.35B v $4.29Be; Authorizes share buyback of up to $1B over 2 years
*(UK) BANK OF ENGLAND BANK (BOE) LEAVES INTEREST RATE UNCHANGED AT 0.10%; AS EXPECTED
CHH Reports Q2 $1.22 v $0.91e, Rev $278.3M v $289Me; JULY RevPAR +15% vs 2019
*(CZ) CZECH CENTRAL BANK (CNB) RAISES 2-WEEK REPURCHASE RATE BY 25BPS TO 0.75%; AS EXPECTED
*(US) INITIAL JOBLESS CLAIMS: 385K V 383KE; CONTINUING CLAIMS: 2.93M V 3.255ME
(US) Atlanta Fed GDPNow: cuts Q3 GDP forecast to 6.1% from 6.3%
NVAX Reports Q2 -$4.75 v -$3.76e, Rev $298.0M v $371Me; Delays US submission for COVID-19 vaccine clearance and targets lower and middle-income countries instead this year
FRI 8/6
MAERSKB.DK CEO: container industry is still not able to lift demand - post earnings comments
*(US) JULY UNEMPLOYMENT RATE: 5.4% V 5.7%E
*(US) JULY CHANGE IN NONFARM PAYROLLS: +943K V +858KE (highest print since Aug 2020 numbers)
*(US) JULY AVERAGE HOURLY EARNINGS M/M: 0.4% V 0.3%E; Y/Y: 4.0% V 3.9%E
EU reportedly plans to discuss reimposing travel restrictions on the US amid Delta variant spread – press
(US) JUN CONSUMER CREDIT: $37.7B V $23.0BE

Market headwinds build entering traditionally choppy time of year

TradeTheNews.com 

Weekly Market Update: Market headwinds build entering traditionally choppy time of year

2021-07-30T16:03:12.207

The month long rally in U.S. stocks encountered stiffening headwinds this week. China's burgeoning regulatory crackdown on US listed corporations resulted in continued trepidation and fallout for investors in those stocks. Heavy US IPO issuance persisted, but signals like Robinhood’s less than stellar reception, suggested investors might be starting to balk at the onslaught of equity supply. Also economic data emerged that indicated the pace of economic growth may be downshifting. Quarterly earnings reports and conference calls continued to highlight the effects ongoing snarls in the global supply chain are having on corporate balance sheets, and are likely to persist for some time.

The Fed and Chairman Powell remained steadfast in their belief that emergency measures will stay in place for several more months at the very least. Wednesday’s FOMC statement emphasized more progress has been made towards the goals required to begin tapering, but a dovish tilt to answers in his press conference confirmed a view by many that the growing spread of the Covid Delta variant is weighing heavily on the Chairman’s mind. Friday saw things finish on a dour note following a disappointing Amazon earnings report, in particular. US Treasury yields finished lower on the week along with the Dollar. Bitcoin finally rallied up from 30K level to finish out consolidating closer the 40K. For the week, the S&P lost 0.4%, the DJIA fell 0.4%, and the Nasdaq ended 1.1% lower.

In corporate news this week, most headlines derived from the torrent of quarterly earnings, with Big Tech names front and center. Alphabet shares jumped after the search giant reported blowout numbers, noting YouTube's revenue nearly doubled amid a rebound in digital ad spending. Microsoft notched earnings and revenue beats, stating it expects growth to continue into next year. Facebook warned its sales growth rate is about to decelerate as Apple iOS restrictions and pandemic reopenings weigh on its outlook. A surprise revenue miss and disappointing outlook dealt Amazon shares their biggest daily drop since last September.

AMD posted beats on its top and bottom line and noted it is growing significantly faster than the market with strong demand across all parts of its businesses. UPS dropped despite a big earnings beat, as its operating margin outlook weighed on investor sentiment. Tesla reported its most profitable quarter in its history despite the global semiconductor shortage that has impaired the entire auto industry. Ford reported a surprise Q2 profit and said chip supply was improving though the situation ‘remains fluid.’ Boeing notched its first profit in almost two years as it saw 737 Max deliveries rise. Robinhood marked the weakest debut ever for an IPO of its size by a U.S. company, reportedly leaving underwriters nonplussed and speculating that the hybrid nature of the auction process may have confused investors.


SUN 7/25
(CN) China Industry Ministry (MIIT): To begin a crackdown on illegal internet activities

MON 7/26
*(DE) GERMANY JULY IFO BUSINESS CLIMATE: 100.8 V 102.5E (1st decline since Jan 2021)
AMZN Reportedly mulls to accept Bitcoin payments by end-2021, also investigating its own token for 2022 - press
RPM Reports Q4 $1.28 v $1.26e, Rev $1.74B v $1.69Be; Warns next 6mo of significant inflation, supply chain impacts
(US) Goldman Sachs cuts Q3 US GDP outlook 11% from 9.5% to 8.5%
LII Reports Q2 $4.57 v $4.32e, Rev $1.24B v $1.16Be; Affirms guidance & raises FY21 stock repurcase to $600M (prior $400M)
(US) Reportedly US will not lift any existing travel restrictions at this point citing Delta variant and potential increase in COVID-19 cases in coming weeks - financial press
WLTW Aon mutually agrees with Willis Towers Watson to terminate combination; Aon to pay $1B termination fee to WLTW
*(US) JUN NEW HOME SALES: 676K V 800KE
*(US) JULY DALLAS FED MANUFACTURING ACTIVITY INDEX: 27.3 V 32.3E
AMZN Denies they will accept Bitcoin this year, also denies it plans to launch a crypto coin in 2022 - press
TSLA Reports Q2 $1.45 adj v $0.90e, Rev $12.0B v $11.4Be; While we saw ongoing semiconductor supply challenges in Q2, we were able to further grow our production
INTC Reveals two breakthrough process technologies to accelerate process and packaging innovations; Set 2025 roadmap

TUES 7/27
700.HK WeChat stops new users registrations until early Aug due to security upgrade following new China govt regulations
(CN) China reportedly considering adding more national laws in Hong Kong basic law annex - press
UPS Reports Q2 $3.06 v $2.71e, Rev $23.4B v $23.1Be; Has no plans to buyback shares in 2021
SWK Reports Q2 $3.08 v $2.89e, Rev $4.30B v $4.20Be; Raises guidance significantly
GE Reports Q2 $0.05 v $0.03e, Rev $18.3B v $18.3Be; Aviation shows early signs of recovery
MMM Reports Q2 $2.59 v $2.25e, Rev $8.95B v $8.54Be; Raises guidance
RTX Reports Q2 $1.03 v $0.92e, Rev $15.9B v $15.8Be; Raises guidance
FISV Reports Q2 $1.37 v $1.29e, Rev $4.05B v $3.71Be; Raises guidance for second time
ADM Reports Q2 $1.33 adj v $0.99e, Rev $22.9B v $18.2Be; Expects strong momentum to continue in H2
WM Reports Q2 $1.27 v $1.18e, Rev $4.48B v $4.24Be; Raises guidance again; Focuses on disciplined pricing and cost management helped to offset the inflationary cost pressures we have seen
GLW Reports Q2 $0.53 v $0.51e, Rev $3.50B v $3.40Be
LECO Reports Q2 $1.67 v $1.46e, Rev $826M v $786Me
*(HU) HUNGARY CENTRAL BANK (MNB) RAISES BASE RATE BY 30BPS TO 1.20%; HIGHER-THAN-EXPECTED
PCAR Reports Q2 $1.41 v $1.38e, Rev $5.84B v $5.44Be
*IMF WORLD ECONOMIC OUTLOOK (WEO): MAINTAINS 2021 GDP GROWTH AT 6.0%
(CN) China government reportedly digging a new field for 'what appears to be 110 silos for launching nuclear missiles' - NYT
*(US) JULY CONSUMER CONFIDENCE: 129.1 V 124.0E
(US) Atlanta Fed GDPNow: cuts Q2 GDP forecast to 7.4% from 7.6%
(US) CDC confirms recommendation that vaccinated individuals should wear masks in public indoor settings in areas with high COVID-19 transmission rates; Kids wear masks when back to school - press
MSFT Reports Q4 $2.17 v $1.90e, Rev $46.2B v $44.1Be
GOOGL Reports Q2 $27.26 v $19.89e, Rev $51.0B v $46.1Be
AMD Reports Q2 $0.63 v $0.54e, Rev $3.85B v $3.60Be; Says growing significantly faster than the market with strong demand across all of our businesses
(US) Weekly API Crude Oil Inventories: -4.7M v +0.8M prior

WED 7/28
DBK.DE Reports Q2 Net+€692M v -€77M y/y, Rev €6.24B v €5.9Be; scraps costs target
BAS.DE Reports Q2 Net +€1.7B v -€0.9B y/y, Adj EBITDA €3.2B v €1.1B y/y, Rev €19.8B v €19.8B prelim
PFE Reports Q2 $1.07 v $0.97e, Rev $19.0B v $17.5Be; Raises guidance due to higher anticipated COVID-19 vaccine Rev
TDY Reports Q2 $4.61 v $2.94e, Rev $1.12B v $1.00Be; Guides Q3 strong; raises FY21 guidance significantly
ADP Reports Q4 $1.20 v $1.13e, Rev $3.74B v $3.67Be
SHOP Reports Q2 $2.24 v $0.98e, Rev $1.12B v $1.04Be; Notes consumer spending remained strong
GSK.UK Reports Q2 Adj EPS 28.1p v 0.20pe, Rev £8.09B v £7.69Be
APH Reports Q2 $0.61 v $0.55e, Rev $2.66B v $2.47Be; The revolution in electronics is accelerating
NSC Reports Q2 $3.28 v $2.94e, Rev $2.80B v $2.75Be
*(US) JUN PRELIMINARY WHOLESALE INVENTORIES M/M: 0.8% V 1.1%E
*(US) DOE CRUDE: -4.1M V -2ME; GASOLINE: -2.3M V -1ME; DISTILLATE: -3.1M V -0.5ME
(US) Atlanta Fed GDPNow: cuts Q2 GDP forecast to 6.4% from 7.4%
*(US) FOMC LEAVES TARGET RANGE UNCHANGED BETWEEN 0.00-0.25% (AS EXPECTED); Made progress towards goals since setting out bar for tapering
(US) Fed Chair Powell: Fed will continue to support the economy until recovery is complete; Timing of tapering will depend on incoming data - post rate decision press conference
QCOM Reports Q3 $1.92 v $1.67e, Rev $8.00B v $7.58Be; Says it has more demand than supply in all products
F Reports Q2 +$0.13 v -$0.11e, Rev $26.8B adj v $21.5Be
FB Reports Q2 $3.61 v $3.03e, Rev $29.1B v $27.9Be; Expects Rev growth rate v 2019 levels to decelerate modestly in H2 2021
005930.KR Reports final Q2 (KRW) Net 9.45T v 5.5T y/y; Op 12.6T v 12.5T prelim (8.15T y/y); Rev 63.7T v 63.0T prelim (52.97T y/y)

THRS 7/29
AIR.FR Reports H1 adj Net +€2.23B v -€1.92B y/y, Adj EBIT €2.73B v -€1.55B y/y, Rev €24.64B v €18.9B y/y; board approves plans for a new freighter version of its A350 passenger jet
(DE) GERMANY JULY CPI NORTH RHINE WESTPHALIA M/M: 0.8% V 0.5% PRIOR; Y/Y: 4.1% V 2.5% PRIOR
CSGN.CH Reports Q2 (CHF) Net 253M v 1.16B y/y, Pretax 813M v 1.55B y/y, Rev 5.1B v 6.2B y/y
NOKIA.FI Reports Q2 €0.09 v €0.05e, Op €682M v €408Me; Rev €5.31B v €5.43Be; Raises guidance
NESN.CH Reports H1 (CHF) Net 5.9B v 5.8Be, Op 7.3B v 7.2Be, Rev 41.8B v 41.9Be
SAN.FR Reports Q2 Business EPS €1.38 v €0.67e, Op €2.27B v €1.60B y/y, Rev €8.74B v €8.4Be
VOW3.DE Reports H1 Net +€8.45B v -€1.02B y/y, Op €11.4B v €11.0B prelim, Rev €129.7B v €96.1B y/y; Trims deliveries outlook citing chip shortage income in H2
RDSA.NL Reports Q2 CCS $0.71 v $0.08 y/y, Adj CCS Net $5.53B v $5.20Be, Rev $61.8B (total rev and other income) v $32.5B y/y; Commences $2B share buyback, to raise dividend from Q2 onwards by 38%
AZN.UK Reports Q2 Core EPS $0.90* v $0.96 y/y, Rev $8.22B v $6.28B y/y; Raises guidance
DGE.UK Reports FY20/21 Preliminary Net £2.66B v £1.41B y/y, adj Op £3.75B v £2.14B y/y, Rev £12.7B v £12.5Be
066570.KR Reports final Q2 (KRW) Net -211.9B v +65.6B y/y; Op 1.11T v 1.1T prelim (495.4B y/y); Rev 17.1T v 17.1T prelim (12.8T y/y)
NOK CEO: chip shortage situation remains tight and to continue into 2022 - post earnings comments
(DE) GERMANY JULY NET UNEMPLOYMENT CHANGE: -91.0K V -29.0KE; UNEMPLOYMENT CLAIMS RATE: 5.7% V 5.8%E
(CN) China Finance Ministry (MOF): To remove steel products tax rebates for 23 items, confirms to raise export tariffs for certain steel products from Aug 1st
(EU) EURO ZONE JULY ECONOMIC CONFIDENCE: 119.0 V 118.2E (highest in over 20 years)
(DE) GERMANY JULY PRELIMINARY CPI M/M: 0.9% V 0.6%E; Y/Y: 3.8% V 3.2%E (highest annual pace since 1993)
MA Reports Q2 $1.95 adj v $1.72e, Rev $4.50B v $4.35Be
(US) INITIAL JOBLESS CLAIMS: 400K V 385KE; CONTINUING CLAIMS: 3.27M V 3.18ME
(US) Q2 ADVANCE GDP PRICE INDEX: 6.0% V 5.4%E; CORE PCE Q/Q: 6.1% V 6.1%E
(US) Nevada reports June casino gaming Rev $1.19B, +111% y/y; Las Vegas strip Rev $610.6M, +156% y/y
(US) JUN PENDING HOME SALES M/M: -1.9% V 0.1%E; Y/Y: -3.3% V -3.3%E
AMZN Reports Q2 $15.12 v $12.22e, Rev $113.1B v $115.1Be
- Guides Q3 Rev $106-112B +10-16% y/y v $119.2Be
AMZN CFO: Sees step down in Revenue growth continuing for the next few quarters, citing lapping growth from 2020 pandemic and additional mobility among customers getting out and doing more than shopping online - media call comments
X Reports Q2 $3.37 v $3.16e, Rev $5.03B v $4.70Be

FRI 7/30
*(DE) GERMANY Q2 PRELIMINARY GDP Q/Q: 1.5% V 2.0%E; Y/Y: 9.6% V 9.6%E
*(EU) EURO ZONE JULY ADVANCE CPI ESTIMATE Y/Y: 2.2% V 2.0%E (back above ECB's target); CPI CORE Y/Y: 0.7% V 0.7%E
*(EU) EURO ZONE Q2 ADVANCE GDP Q/Q: 2.0% V 1.5%E; Y/Y: 13.7% V 13.2%E
*(EU) EURO ZONE JUN UNEMPLOYMENT RATE: 7.7% V 7.9%E
CAT Reports Q2 $2.60 v $2.38e, Rev $12.9B v $12.4Be; Cites higher end-user demand for equipment and services
PG Reports Q4 $1.13 v $1.08e, Rev $18.9B v $18.3Be
XOM Reports Q2 $1.10 v $1.02e, Rev $67.7B v $63.7Be
*(US) JUN PERSONAL INCOME: +0.1% V -0.3%E; PERSONAL SPENDING: 1.0% V 0.7%E
(US) SEC Chair Gensler: Confirms SEC has asked staff to seek certain disclosures from offshore issuers associated with China-based operating companies
*(US) JULY CHICAGO PURCHASE MANAGERS INDEX: 73.4 V 64.2E
*(US) JULY FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 81.2 V 80.8E
(US) Atlanta Fed GDPNow: forecasts initial Q3 GDP at 6.1%

Brief bout of risk aversion quickly reverses

TradeTheNews.com 

Weekly Market Update: Brief bout of risk aversion quickly reverses

2021-07-23T16:05:17.287

This week’s trade opened amid a step sell off in global equity markets. Worries about a jump in global Covid cases, predominately attributed to the Delta variant induced the most aggressive one way stampede out of risk assets in months. Adding to the consternation were continued worries about rising inflation and the likely lingering effects on the supply chain another wave of the pandemic could exacerbate. Also, an intensifying crack down by Beijing on US-listed Chinese stocks continued to weigh heavily on that sector. Global interest rates plumbed to levels not seen since February highlighted by the US 10-year yield which briefly dipped below 1.15%. Oil slumped along with equities and the VIX surged 30%. Ultimately though, as seen several times since the very beginning of the pandemic, the bleeding stopped abruptly. The S&P tested the 50-day moving average and stocks quickly found support despite continued softness in yields. Mega-cap tech names were the stabilizer yet again, as strength there masked significant weakness in the Russel 2000 as a strong rebound ensued for the overall market.

Separately, earnings season picked up momentum and clear lines emerged. Managements that illustrated their ability to offset supply constraints and input cost pressures saw their shares outperform after releasing results. Economic data was mixed as preliminary looks at global July PMI readings held at robust levels, but US weekly jobless claims ticked unexpectedly higher and housing data indicated some moderation due to the surge in prices. The ECB met and adjusted its forward guidance to calibrate to the recently updated inflation target. Lagarde acknowledged the statement was not unanimously supported, but the revised forward guidance underscored the ECB’s commitment to maintaining an accommodative stance by keeping rates at their present or lower levels until inflation reaches target and maintains it for some time. By Friday, US treasury yields had nearly returned to where they ended last week and US indices outside of the small caps were in positive territory. For the week, the S&P rose 2%, the DJIA added 1.1%, and the Nasdaq was up 2.8%.

In corporate news this week, earnings season ramped up with some major names releasing their quarterly results. IBM saw its revenue rise for a second consecutive quarter and confirmed its FY outlook, though higher expenses weighed on earnings year on year. Netflix notched its lowest subscriber additions in several years and disappointed investors with a modest Q3 outlook. Intel beat on top and bottom line, but its continued loss of market share to AMD weighed on investors’ minds, and the CEO warned the semiconductor shortage could take a couple years to fully heal. Chipotle posted a big beat as customers returned to its restaurants this quarter and its digital sales continued a strong growth trajectory. Coatings giant PPG guided Q3 input and logistics costs higher sequentially and said it will continue to raise prices in order to offset expenses. On the airlines front, both American and Southwest posted their first monthly profits without government help since pre-COVID times. Investors saw a lot to like in Twitter’s quarter, as its advertising initiatives led to an unexpected bounce in revenue and its outlook beat street estimates. Snap posted its best quarter in four years, reporting strong growth in its daily active user and average rev per user metrics.


SUN 7/18
OPEC+ said to agreed to ease oil output cuts from Aug 2021 and to extend supply agreement until the end-2022 - press
(CN) China Govt has signaled that Hong Kong is the preferred place for Chinese companies to IPO (not New York) and will exempt any Chinese company from requiring approval from cybersecurity regulatory body if they IPO in Hong Kong v other offshore markets - press
(HK) Macau Responsible Gaming Association President Wai-kit: Recent closure of satellite casinos does not imply the start to more wide spread closures; but there will be some difficulty in reaching MOP130B in gaming rev in 2021 - HK press
MON 7/19
*(US) JULY NAHB HOUSING MARKET INDEX: 80 V 81E
(CA) Canada to begin allowing fully vaccinated US visitors into the country for non-essential travel beginning Aug 9th
(DE) US and Germany reportedly to announce deal over dispute regarding Nord Stream 2 nat gas pipeline in coming days - press
JBHT Reports Q2 $1.61 v $1.55e, Rev $2.91B v $2.72Be
IBM Reports Q2 $2.33 v $2.25e, Rev $18.7B v $18.2Be
PPG Reports Q2 $1.94 v $2.19e, Rev $4.36B v $4.42Be; Guides Q3 input and logistics costs higher q/q
STLD Reports Q2 $3.40 v $3.43e, Rev $4.47B v $4.17Be
BHP.AU Reports Q4 Waio Iron Ore Production: 72.8Mt v 75.6Mt y/y, Attributable Iron Ore Production: 65.2Mt v 66.7Mt y/y
AAPL To postpone return to office until earliest October, due to COVID, will give 1 month notice before return - press
TUES 7/20
(HK) Macau Jun Visitor Arrivals 528.5K, +2,000% y/y
UBSG.CH Reports Q2 Net $2.0B v $1.2B y/y, Adj PBT $2.6B v $1.6B y/y, Rev $8.98B v $7.4B y/y, To buyback $600M in shares in Q3 (under existing buyback program)
ALO.FR Reports Q1 Rev €3.70B v €1.51B y/y; Affirms H1 FCF
TRV Reports Q2 $3.45 v $2.35e, Rev $8.69B v $8.29Be
PM Reports Q2 $1.57 v $1.54e, Rev $7.59B v $7.84Be; Announces up to $7B share buyback; Raises FY21 Guidance
HCA Reports Q2 $4.36 v $3.17e, Rev $14.4B v $13.6Be; Raises guidance significantly
MAN Reports Q2 $2.02 v $1.42e, Rev $5.30B v $5.17Be; Guides Q3 well-above est's
ALLY Reports Q2 $2.33 v $1.49e, Rev $2.09B v $1.86Be
*(US) JUN HOUSING STARTS: 1.64M V 1.59ME; BUILDING PERMITS: 1.60M V 1.70ME
PPG Exec: Guides Q3 material costs inflated by as much as 20% y/y; Guides Q4 positive cost pass-through offsets - earnings call comments
(NZ) Fonterra Global Dairy Trade Auction Dairy Trade price index: -2.9% v -3.6% prior
(US) Atlanta Fed GDPNow: raises Q2 GDP forecast to 7.6% from 7.5%
ISRG Reports Q2 $3.92 v $3.16e, Rev $1.46B v $1.28Be
UAL Reports Q2 -$3.91 v -$4.17e, Rev $5.47B v $5.31Be
(US) Weekly API Crude Oil Inventories: +0.8M v -4.1M prior (1st build in 9 weeks)
JNJ New study finds one dose of J&J COVID vaccine is less effective against Delta and Lambda variants; adds to evidence that those inoculated with J&J vaccine may need second dose, ideally of mRNA variety - NYT
AAPL Said will not introduce new 4G phones or iPhone Mini next year (2022), will only introduce 5G phones - Nikkei
WEDS 7/21
NOVN.CH Reports Q2 Core EPS $1.66 v $1.52e, Rev $12.96B v $12.53Be; Affirms outlook
SAP.DE Reports Q2 Net €1.40B v €59M y/y Op €1.92B v €1.90Be, Rev €6.67B v €6.74B y/y; Raises outlook
DAI.DE Reports Q2 Net +€3.70B v -€1.91B y/y, adj EBIT €5.42B v €5.42B prelim, Rev €43.5B v €42.7Be; Says listing of Daimler Trucks is on track; Comments on chip shortage impact
ANTM Reports Q2 $7.03 v $6.34e, Op Rev $33.3B v $33.2Be; Raises guidance
JNJ Reports Q2 $2.48 v $2.28e, Rev $23.3B v $22.3Be; Raises FY21 outlook
KO Reports Q2 $0.68 v $0.57e, Rev $10.1B v $9.49Be; Raises FY21 outlook
(US) Deputy Sec of State Sherman to meet with China's Wang Yi; the talks are expected to be held on Sun and Mon (Jul 25-26th) - financial press
(UK) Brexit negotiator Frost: Clear circumstances to justify Article 16, but not there yet; Today's proposals will require a significant change to NI protocol
STX Reports Q4 $2.00 v $1.86e, Rev $3.01B v $2.96Be; Guides Q1 well-above ests
UAL CEO: Bookings are getting stronger every day, not seeing any impact from Delta variant; Confident United to be profitable in Q3 and Q4 - CNBC
KNX Reports Q2 $0.98 v $0.87e, Rev $1.32B v $1.30Be; Raises FY21 EPS guidance for second time
(EU) EU spokesperson: We take note of statement made by UK's Frost today; We will not agree to a renegotiation of the Northern Ireland protocol
*(US) DOE CRUDE: +2.1M V -3.5ME; GASOLINE: -0.1M V -1ME; DISTILLATE: -1.3M V +1ME
(US) TREASURY $24B 20-YEAR BOND REOPENING DRAWS 1.890%, BID-TO-COVER 2.33 v 2.40 PRIOR
(US) Fed Chair Powell reportedly has wide support among top Biden aides to be renominated for a second term but advisers have not discussed it with Biden yet; decision on reappointment not expected before Sept - press
BHP.AU Reached agreement to supply nickel to Tesla (securing a non-Chinese supply)
THURS 7/22
ROG.CH Reports H1 (CHF) Core EPS 10.56 v 10.44 y/y, Core Op 11.7B v 11.8B y/y, Rev 30.7B v 29.3B y/y
UNA.NL Reports H1 Net €3.49B v €3.56B y/y; Rev €25.8B v €25.7B y/y
V Acquires cloud-based platform for currency exchange services Currencycloud for £700M
DOW Reports Q2 $2.72 v $2.48e, Rev $13.9B v $12.7Be
T Reports Q2 $0.89 adj v $0.78e, Rev $44.0B v $42.6Be
DOW Guides Q3 Rev ~$13.8-14.3B v $12.1Be - earnings slides
*(EU) ECB LEAVES MAIN REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED
UNA.NL CEO: We expect to grow volumes this year in emerging markets, do not expect collapse in volumes because of price - post earnings comments
*(US) INITIAL JOBLESS CLAIMS: 419K V 350KE; CONTINUING CLAIMS: 3.24M V 3.10ME
(EU) ECB chief Lagarde: Revised forward guidance to underline commitment to maintain an accommodative stance - Prepared Remarks
*(US) JUN EXISTING HOME SALES: 5.86M V 5.90ME
(EU) ECB's Weidmann (Germany) and Wunsch (Belgium) said to oppose the ECB's new rate guidance - press
INTC Reports Q2 $1.28 v $1.06e, Rev $19.6B v $18.0Be; Guides Q3 Rev well ahead of ests; Raises FY21 again
COF Reports Q2 $7.71 v $4.78e, Rev $7.4B v $7.10Be
INTC CEO: chip industry could take a couple of years to fully catch up to surging demand for semiconductors - media interview
FRI 7/23
PFE Pfizer/BioNTech vaccine was reportedly ~39% effective in protection from delta variant in Israel in recent weeks - press
*(FR) FRANCE JULY PRELIMINARY PMI MANUFACTURING: 58.1 V 58.3E (8th month of expansion, but lowest reading since Feb 2021)
*(DE) GERMANY JULY PRELIMINARY PMI MANUFACTURING: 65.6 V 64.1E (13th month of expansion)
*(EU) EURO ZONE JULY PRELIMINARY PMI MANUFACTURING: 62.6 V 62.5E (13th month of expansion)
*(UK) JULY PRELIMINARY PMI MANUFACTURING: 60.4 V 62.4E (14th straight expansion)
HON Reports Q2 $2.02 v $1.94e, Rev $8.81B v $8.53Be; Raises guidance
KMB Reports Q2 $1.47 v $1.73e, Rev $4.72B v $4.78Be; Says facing significantly higher input costs and a reversal in consumer tissue volumes; Cuts FY21 outlook
(US) JULY PRELIMINARY MARKIT PMI MANUFACTURING: 63.1 V 62.0E

Initial Q2 earnings unable to stave off resurgent inflation and Covid concerns

TradeTheNews.com 

Weekly Market Update: Initial Q2 earnings unable to stave off resurgent inflation and Covid concerns

2021-07-16T16:25:01.223

Markets struggled to find direction this week as concerns about Covid variants and the potential for a prolonged period of inflation weighed on sentiment despite a solid start to the Q2 earnings season. US data showed higher-than-expected inflation which may be eroding consumer confidence readings, though advanced retail sales were above forecast. Tuesday’s CPI data came in hot, with the 5.4% y/y reading at its highest annual rate since mid-2008, the crescendo of the housing bubble. Fed officials continued to drop hints about future plans for tapering QE, including the Chicago Fed’s Evans suggesting unemployment reaching 4.5% by year end could dictate some adjustment. For his part, Chair Powell remained steadfast in his stance that tapering is still ‘a ways off’ in Congressional testimony.

On the political front, Democrats on Capitol Hill arrived at a $3.5T budget for spending and tax plans, including a Medicare expansion. Sino-American tension grew as the Biden Administration issued a business advisory, warning companies of the risks around China’s growing influence in Hong Kong, which Beijing strongly objected to. Crude oil prices were pointed lower for most of the week on reports that Saudi Arabia has given in to UAE demands to ease production restrictions. There was also a modest sell off in stocks, though a flight to safety was not especially apparent as gold was about flat and demand was lackluster in the 10- and 30-year Treasury auctions. For the week, the S&P lost 1%, the down slipped 0.5%, and the Nasdaq fell 1.9%.

In corporate news this week, earnings season kicked off as major banks began reporting their quarterly results. JPMorgan traded lower despite reporting its Q2 profit more than doubled year on year, while Goldman Sachs jumped after big beats on both its top and bottom line. Bank of America shares fell after low interest rates squeezed its Q2 revenue. Wells Fargo was the only lender out of the four biggest to post an increase in revenue last quarter, notching its highest revenue since before COVID started. Morgan Stanley beat Wall Street consensus estimates despite weak results in its fixed-income, currency and commodities segments.

Delta Airlines reported a beat on its top and bottom line, noting that it sees domestic leisure travel as fully recovered now to 2019 levels. Union Pacific said it would suspend shipments for 7 days from West Coast ports to Chicago in order to ease congestion on the tracks. Netflix announced it would be entering the video game market and planned to offer streaming games beginning next year. Apple is reportedly seeking to boost iPhone production by 20% in the current year - press


SUN 7/11
6758.JP Expect that robots will takeover manufacturing of TVs, cameras and smartphones, unmanned production lines expected to cut costs by 70% at main TV factory in Malaysia by 2023 v 2018 - FT
000660.KR Started mass production of of 8GB LPDDR4 mobile DRAM based on 1a-nm EUV process this month; Expect 1a-nm DRAM to alleviate supply and demand conditions

MON 7/12
LCAP Announces business Combination with MSP Recovery, a Leader in Data-Driven Solutions, Recovering Improperly Paid Benefits on Behalf of Medicare, Medicaid and Commercial Payers in deal valued at $32.6B
(US) June NY Fed Survey of Consumer Expectations: Median inflation expectations increased 0.8ppts in June to 4.8% at the one-year horizon
AVGO Reportedly in talks to acquires SAS Institute Inc for as much as $20B - press
*(US) TREASURY'S $38B 10-YEAR NOTE REOPENING DRAWS 1.371%; BID-TO-COVER RATIO: 2.39 V 2.58 PRIOR AND 2.44 OVER THE LAST 8 REOPENINGS
MCD Franchisees agree to adopt employee incentive plan which includes childcare and other benefits - press

TUES 7/13
MDCA Raises FY21 Organic Rev ~+9-11% (prior 7-9%), adj EBITDA $200-210M (prior $190-200M), citing continues strong demand in Q2 - filing
(HU) Hungary Fin Min Varga: OECD "two-pillar" minimum global tax proposal "far from acceptable"
JPM Reports Q2 $3.03 adj (ex reserve release) v $3.05e, Managed Rev $31.4B v $30.0Be; Ave loans "flat" q/q
FAST Reports Jun net sales $533.4M +1.7% y/y
GS Reports Q2 $15.02 v $9.57e, Rev $15.4B v $11.5Be; Confirms to raise dividend 60% to $2.00/shr from $1.25/shr (indicated yield 2.17%)
CAG Reports Q4 $0.54 v $0.52e, Rev $2.74B v $2.74Be; Now expect FY22 input cost inflation to be materially higher than we anticipated at the end-Q3; Raises annual dividend to $1.25/shr from $1.10/shr
BINANCE.IPO Suspends withdrawals GBP and EUR as payment provider Clear Junction has stopped facilitating them
(HK) Biden administration to issue a business advisory warning companies of growing China influence in Hong Kong, increasing the risk of operating in HK - press
*(US) JUN CPI M/M: 0.9% V 0.5%E; Y/Y: 5.4% V 4.9%E (highest annual rate since Jun 2008)
*(US) TREASURY $24B 30-YEAR BOND REOPENING DRAWS 2.00%; BID TO COVER 2.19 V 2.29 PRIOR AND 2.40 OVER LAST 8 REOPENINGS
*(US) JUN MONTHLY BUDGET STATEMENT: -$174.2B V -$192.0BE
AAL Guides Q2 -$1.76 to -$1.67 v $2.32e, Raises Q2 Rev -37% vs 2019 (prior -40% vs 2019), guides Q2 ASMs -24.6% vs 2019 (prior -25% to -20% vs 2019)
(US) Fitch affirms United States sovereign rating at AAA; Outlook Negative
(US) Weekly API Crude Oil Inventories: -4.1M v -8.0M prior (8th straight weekly draw)
AVGO Reportedly no longer in talks to acquire SAS Institute for $20B - press
AAPL Said to be seeking 20% increase in iPhone production in the current year - press
(US) Senator Schumer (D-NY): Senate Democrats have arrived at a $3.5T budget deal for spending and tax plans; budget to include Medicare expansion

WEDS 7/14
*(UK) JUN CPI M/M: 0.5% V 0.2%E; Y/Y: 2.5% V 2.2%E (2nd month annual pace above BOE target and highest since 2018)
BAC Reports Q2 $1.03 v $0.78e, Rev $21.5B v $21.8Be; Says consumer spending significantly surpassed pre-pandemic levels, loan levels have begun to grow; Total Loans & Leases -0.08% y/y
(AE) UAE and Saudi Arabia said to have reached compromise in oil production deal - press
DAL Reports Q2 -$1.07 v -$1.37e, Rev $7.13B v $6.30Be; Says domestic leisure travel is fully recovered to 2019 levels
DAL CEO: we are in a full recovery of our business - CNBC interview
MAR CEO: US recovery has been led by leisure with Strong pricing power - CNBC interview
*(US) JUN PPI FINAL DEMAND M/M: 1.0% V 0.6%E; Y/Y: 7.3% V 6.7%E
(US) Fed chief Powell semi-annual testimony in House Committee on Financial Services: Still a ways off from meeting tapering threshold; Long term inflation expectations are consistent with Fed goals
*(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 0.25%; AS EXPECTED; CUTS QE BOND BUYING PROGRAM TO C$2B PER WEEK FROM C$3B
*(US) DOE CRUDE: -7.9M V -4ME; GASOLINE: +1.0M V -2ME; DISTILLATE: +3.7M V +1ME (8th straight weekly decline in crude stocks; Crude stocks fall to lowest since Jan 2020)
(US) Fed Chair Powell: If Fed sees inflation remaining materially higher for a period of time, threatening inflation expectations, then the Fed will change its policy - testimony to House Committee on Financial Services
(US) FEDERAL RESERVE BEIGE BOOK: ECONOMY STRENGTHENED FROM LATE MAY TO EARLY JULY; OUTLOOK FOR DEMAND IMPROVED FURTHER BUT SOME EXPRESSED UNCERTAINTY OR PESSIMISM OVER EASING OF SUPPLY CONSTRAINTS
AIG To sell 9.9% equity stake in Life & Retirement business to Blackstone for $2.2B cash; To sell certain affordable housing assets to Blackstone Real Estate Income Trust, Inc. for $5.1B
NFLX Entering video game market, will offer streaming games next year; former Electronic Arts, Zynga and Facebook executive Mike Verdu to lead - press
*(CN) CHINA Q2 GDP Q/Q: 1.3% V 1.0%E; Y/Y: 7.9% V 8.0%E (**Note prior quarter growth revised lower by 33%)

THURS 7/15
2330.TW Reports Final Q2 (NT$) Net 134.4B v 120.8B y/y; Op 145.7B v 131.1B y/y, Rev 372.2B v 372.2B prelim; Says auto chip shortages to be gradually reduced for customers starting Q3
(UK) BOE’s Saunders (dove): Withdrawing stimulus may be appropriate fairly soon; any rate rise in the next year will likely be limited
WIT Reports Q1 (INR) Net 32.4B v 28.3Be, Rev 182.5B v 176.3Be; Guides Q2 Rev above cons ests
PAG Reports prelim Q2 adj >$4.00 v $2.04e citing strength of the auto and commercial truck retail model
AXTA Announces Global Price Increases across all of its global lines of business, effective immediately
*(US) JULY EMPIRE MANUFACTURING: 43.0 V 18.0E (record high)
*(US) INITIAL JOBLESS CLAIMS: 360K V 350KE; CONTINUING CLAIMS: 3.24M V 3.30ME
*(US) JULY PHILADELPHIA FED BUSINESS OUTLOOK: 21.9 V 28.0E
(US) Fed Chair Powell: bar for the Fed to start tapering asset purchases is still a ways off - Senate testimony
(US) Fed's Evans (dove, voter): if unemployment is at 4.5% by the end of the 2021, would guess some adjustment in stance would be appropriate
AA Reports Q2 $1.49 adj v $1.35e, Rev $2.83B v $2.61Be; Raises FY21 shipment outlook
- Raises FY21 aluminum shipments 2.9-3.0M metric tons, total annual bauxite shipments 50-51M dry metric tons, total alumina shipments 14.1
RIO.AU Reports Q2 Pilbara iron ore shipments 76.3Mt v 86.7Mt y/y; Pilbara iron ore production 75.9Mt v 83.2Mt y/y
(CN) China Carbon Emissions Market opens up at CNY48/ton

FRI 7/16
*(EU) EURO ZONE JUN FINAL CPI Y/Y: 1.9% V 1.9%E; CPI CORE Y/Y: 0.9% V 0.9%E
*(US) JUN ADVANCE RETAIL SALES M/M: +0.6% V -0.3%E; RETAIL SALES (EX-AUTO) M/M: +1.3% V +0.4%E
KSU Exec: Saw core pricing gains in the quarter - conf call comments
*(US) JULY PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 80.8 V 86.5E
(US) Atlanta Fed GDPNow: cuts Q2 GDP forecast to 7.5% from 7.9%
UNP Suspends shipments for 7 days from West Coast ports to Chicago to ease congestion – press