MARKET WRAPS
Watch For:
S&P CoreLogic Case-Shiller Home Px Index for May, Conference Board Consumer Confidence for July; earnings from Alphabet, GE, General Motors, Microsoft, Raytheon, Verizon, Visa
Today's Headlines/Must Reads
- Stock Market Shrugs Off Recession Signals as Rally Builds
- Conservatives' Wrath Clouds Kevin McCarthy's Spending Path
- Cleaning Up ChatGPT Takes Heavy Toll on Human Workers
Follow WSJ markets coverage here .
Opening Call:
Stock futures rose early on Tuesday as earnings season picked up pace and traders looked ahead to the Federal Reserve decision midweek.
The Dow is on an 11-session winning streak, its best run in more than six years, as hopes build that the Fed's rate hikes will not cause a recession as inflation cools.
Whether the Dow can make it an even dozen - and extend its rally even further to fresh 15-month highs - will likely depend on the next few days containing corporate earnings and Fed comments.
The market is certain the central bank will increase interest rates by another 25 basis points to a range of 5.25% to 5.50%.
But investors are less sure of whether that will be the last hike of the current cycle, so the Fed's accompanying statement and what Jerome Powell says at his press conference will be the main drivers of bonds, equities and forex around the event.
And that may lead to disappointment, warned Swissquote Bank.
"[W]hat Fed officials will also do is to remind investors that the tightening cycle is probably not over and that there will probably be another rate hike on the U.S. horizon. So yes, there is a great chance that the Fed will spoil your mood if you are among those thinking that this week's rate hike will be the last for this tightening cycle in the U.S.."
Meanwhile, helping underpin sentiment on Tuesday was a rebound in Chinese stocks, notably property developers after Beijing signaled support for the heavily-indebted sector.
Read Chinese Developers Jump After Beijing Signals Support for Property Sector
Premarket Movers
F5 reported above-forecast fiscal third-quarter earnings. Shares rose 10%.
Cadence Design Systems raised its forecast for the year, but the stock fell 4.5%.
Logitech rose 5.2% after beating fiscal first-quarter earnings estimates and hiking its guidance.
NXP Semiconductors beat analysts' second-quarter earnings and revenue expectations. The stock rose 2.3%.
Walmart was upgraded to Overweight from Neutral at Piper Sandler with a price target of $210. Its shares rose 1.3%.
Forex:
The dollar edged lower, dented by risk appetite among investors after promises from China's Politburo of 'counter-cyclical' measures, ING said.
However, risk appetite is tentative, particularly ahead of Wednesday's Federal Reserve rate decision, it said.
"The European economy looks weak and tomorrow's [FOMC] meeting will probably see the Fed's foot remaining firmly on the monetary brakes."
ING expects the DXY dollar index to trade in a tight range between 101.00-101.50 ahead of the Fed meeting.
Read Rates Markets Expected to Remain Volatile, TwentyFour Asset Management Says
The euro extended its falls, dropping to its weakest in nearly two weeks against the dollar, after a below-forecast German Ifo business climate survey added to evidence of a sluggish economy.
"The bigger-than-expected fall in the German Ifo, together with the drop in the PMIs published yesterday, suggest that the German economy continued to shrink at the start of 3Q," Capital Economics said.
Read German Business Sentiment Fell in July for Third Consecutive Month
Energy:
Oil futures were little changed after China signaled it was considering support for the flagging property sector but stopped short of announcing the broader economic support investors were hoping for.
Metals:
Base metals gained on China's planned new policies to support property developers.
China's home building is a major source of metals demand and the signals are lifting metals prices after a period of concern about the Chinese economy, ANZ said.
"The market will require more details on these latest measures before it will feel assured the worst is behind it."
TODAY'S TOP HEADLINES
Elon Musk's Pivot to X Draws Strong Opinions Across Twitter
Elon Musk's rebranding of Twitter to X elicited excitement, exasperation and effrontery from users as they adjusted to the billionaire's latest change in remaking the social-media platform he acquired last year.
Reactions in the Twitterverse after Musk's announcement on Sunday ranged from dismay at Musk bringing an end to Twitter's globally recognized blue bird brand to jokes and sarcasm about the new "X" branding to excitement about the billionaire's ambition to turn https://urldefense.com/v3/__http://X.com__;!!F0Stn7g!H557h1nMq5-ZcNS9yi5MoImYs6Lg3b_-_HavNmFFNkRqLorZGsgl-ZgrJOxIsXbjprP0ft5e2-Rg3q0E4mzI5kw4lUGAlQyynctJG1EmRGw$ into a so-called everything app-in which the platform would offer an array of services including audio, video, messaging and banking.
Tucker Carlson's Fox Exit Helps Boost Newsmax Ratings
Conservative news channel Newsmax saw its prime-time viewership more than double in the second quarter, as it held on to a good chunk of the gains it made following the departure of Tucker Carlson from rival Fox News.
Newsmax drew 247,000 prime-time viewers in the period, through June 25, compared with 111,000 in the first quarter.
German Business Sentiment Fell in July for Third Consecutive Month
Business sentiment in Germany worsened in July for the third month in a row, and by more than expected, with weakness in the country's key manufacturing base once again reflecting a more pessimistic economic outlook.
The Ifo business-climate index declined to 87.3 in July from 88.6 in June, according to data from the Ifo Institute published Tuesday, missing expectations of 88.1 by economists polled by The Wall Street Journal.
South Korea's Economy Grew Faster Than Expected in Second Quarter
South Korea's economy grew at a faster-than-expected pace in the second quarter, remaining on track for recovery after avoiding a technical recession in the previous quarter.
Gross domestic product in Asia's fourth-largest economy grew 0.6% on-quarter during the April-June period following a 0.3% increase in the first quarter, preliminary Bank of Korea data showed Tuesday. In the final quarter of last year, the economy had contracted 0.3% on quarter.
Conservatives' Wrath Clouds Kevin McCarthy's Spending Path
WASHINGTON-House Speaker Kevin McCarthy's streak of getting must-pass bills through the chamber looks increasingly at risk, with fiscal conservatives flashing new warning signs that they could delay or derail his plans on government spending.
The California Republican has so far this year wrangled votes to suspend the debt ceiling, to reauthorize the Federal Aviation Administration and pass the annual defense-policy bill despite internal GOP friction. But he faces a new set of challenges in the final days before the August recess, with some Republicans unsatisfied with the concessions McCarthy has already made to soothe them-and open to squeezing their party leader more to get their way.
Senate Panel Probes Leon Black's Financial Ties to Epstein, Tax Maneuvers
The U.S. Senate Finance Committee is investigating former Apollo Global Management Chief Executive Leon Black's tax strategies and dealings with the late disgraced financier Jeffrey Epstein, pressing the private-equity billionaire for information on Epstein's high-price tax advice.
Committee Chairman Ron Wyden on Tuesday released a letter to Black that made public the panel's investigation, which has been going for a year. In the letter, Wyden asked Black whether trust arrangements improperly moved assets out of his estate and why he paid Epstein-who wasn't an accountant or tax lawyer-$158 million for advice over six years.
Justice Department Sues Texas Over Border Buoy Barrier
The Justice Department on Monday followed through with its threat to sue Texas Gov. Greg Abbott if he didn't remove a floating buoy barrier the state had installed on the Rio Grande in an effort to stop migrants from entering the U.S.
In its complaint filed in the Western District of Texas, the U.S. Department of Justice said the Republican governor had violated the Rivers and Harbors Act when it strung together the buoys in the river along the U.S.-Mexico border without federal authorization.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
Canadian National Railway Company 2Q
First Quantum Minerals 2Q
Economic Calendar:
Nothing scheduled
Stocks to Watch:
Allkem Signs Project Financing With International Finance Corp for Sal de Vida Project; Up to $130M IFC Facility Over 10-Year Period Up to $130M IFC Facility Over 10-Year Period; Allkem in Talks With Another Lender to Increase Project Finance by Further $50M
Expected Major Events for Tuesday
05:00/JPN: Jun Supermarket sales
08:00/GER: Jul Ifo Business Climate Index
08:59/JPN: May Final Labour Survey - Earnings, Employment & Hours Worked
10:00/UK: Jul CBI Industrial Trends Survey
12:55/US: 07/22 Johnson Redbook Retail Sales Index
13:00/US: May U.S. Monthly House Price Index
13:00/US: May S&P CoreLogic Case-Shiller Indices
14:00/US: Jul Richmond Fed Business Activity Survey
14:00/US: Jul Consumer Confidence Index
17:00/US: Jun Money Stock Measures
20:30/US: 07/21 API Weekly Statistical Bulletin
23:01/UK: REC JobsOutlook survey
23:50/JPN: Jun Services Producer Price Index
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Tuesday
Alaska Air Group Inc (ALK) is expected to report $2.66 for 2Q.
Ares Capital Corp (ARCC) is expected to report $0.55 for 2Q.
Atlantic Union Bankshares Corp (AUB) is expected to report for 2Q.
Auburn National Bancorporation Inc (AUBN) is expected to report for 2Q.
(MORE TO FOLLOW) Dow Jones Newswires
07-25-23 0619ET
